Blue Nile Inc.; Case Analyst
Blue Nile was founded in 1999 and today, it is one of the largest online retailers of diamonds. In addition to selling diamonds, it also offers platinum, gold, peral, and sterling silver jewelry. It is headquartered in Seattle, Washington and it operates in 25 countries, offering products through its United States, Canada and the United Kingdom Websites. The Company is public traded on the NASDAQ stock exchange and has received several rewards for its service price and education. Its Mission is to be the best jewelry retailer in the industry, and will achieve that by providing high quality products at compelling values through a powerful shopping experience. The company delivers a great customer experience, as well as providing consumers with a unique way to buy rings and other fine jewelry. Blue Nile Displays diamond inventories available with the suppliers on it websites without actually holding them until customer place an order. The company offers more than 60,000 diamonds on its website. Blue Nile targets men to come shop to its site for engagement rings. The national average for an engagement ring is $3,200 but Blue Nile exceeds this number by having a $5,600 average price. Using the B2C EC model with no physical stores, no intermediaries and offering products four times cheaper than rivals, Blue Nile has proven to be a successful online retailer. Blue Nile is directly competing with both online diamonds retailers and physical stores diamonds retailers. Physical stores selling diamonds have tried to persuade customers that buying a diamond is an exciting experience that can only be realized in stores (and not online). They have emphasized the idea of seeing, touching and comparing diamonds that is exclusively possible in a store. Blue Nile has many dangerous competitors such as Tiffany and Co, Diamonds.com, and Zale Jewelers Stores. Blue Nile has grown into one of the largest jewelry retailers in the United States with only using the Internet as its distribution channel. The success is a direct result of a well-crafted business strategy that attracts high price customers and provides them with in-depth education about diamonds and jewelry. The company’s strategy provides customers with high quality diamonds, exceptional customer service and low prices. They pride themselves on their selection and outstanding education that they provide to consumers looking for the perfect diamond. In addition they have received various awards and recognition from Forbes and Bizrate.com. Blue Nile has found a niche in which to differentiate itself by creating an online marketplace for jewelry shopping and with low operating costs which makes them extremely competitive. In viewing Blue Niles website, one can see that they have a vast amount of for potential buyers that which determine a diamond’s value- carat, clarity, color, cut, and cut grade. Some of the Strength’s for the company is that it has a user friendly site that present a lot of diamonds styles to choose from with the 5C’s of diamond selection which are cut shape, cut, color, clarity and carat weight. Their price is much lower than others. Blue Niles also prides themselves on their selection and outstanding education that they provide to consumers looking for the perfect diamond. The first important factor when selecting and buying a diamond is Cut. Many women are already familiar with the various popular cuts of diamonds—Princess, Pear, Marquise and Round Brilliant. Shape or “cut” is achieved by cutting and polishing the diamond’s facets to allow the maximum amount of light to pass through. The experts at Blue Nile can help educate you about your options and the fine points of buying a brilliant diamond, but without paying the outrageous prices many retailers pass along to their customers. A second important factor in selecting the perfect diamond is clarity. Before we discuss clarity, it’s important to note that all diamonds have what are...
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