A funny thing happened on the way to the Internet to buy jewelry. It seems at least one online diamond and jewelry seller – none other than the leading company in the sector, Blue Nile – has decided that it needs an online presence in order to better sell its goods.
Want to check a jewelry item before buying it? Just go to one the company's new 'webrooms' (only in the United States, at least as of now) have a look and feel and then go online either at the premises or elsewhere with your computer, tablet or smartphone and make the purchase.
The touchy-feely approach started in 2014 when Blue Nile linked up with two Nordstrom stores to give potential buyers the opportunity to look at goods before placing an order online. Diamond rings on show at Nordstrom's Seattle store were not available for purchase, but shoppers could try them on and inspect them up close. Shoppers then had go to Blue Nile's website to carry out the purchase. Few industry observers failed to notice the irony of an experiment of letting potential buyers see the goods at bricks-and-mortar stores by the online jeweler which has been selling online for the past 15 years.
The experiment, at Nordstrom's New York City store as well as the Seattle outlet, aims to attract new customers to the e-tailer's site, with analysts saying it came in response to the establishment of websites by most U.S. national jewelry chains. The chains therefore had both a physical and an online presence – the so-called omni-channel approach – leaving Internet retailers such as Blue Nile without the ability to physically present goods. "Now everyone else is online, what they do is less unique," said Morningstar analyst Paul Swinand."
Analysts also pointed out that the initiative stemmed from the company's needs to build its brand more in the United States and more effectively compete with big national jewelry chains and competitors such as Amazon.com. Although Blue Nile enables shoppers to research diamonds and customize jewelry online, and due to its low overheads can offer prices that are 20-40 percent below store-sold diamond prices, the e-tailer had come to the conclusion that greater efforts were needed to expand its sales.
With all other jewelry retailers online as well as having a physical presence, Blue Nile’s relative advantage, it seemed, had been slashed.
Internet sales may be all the rage and a first port of call for most Western consumers – certainly those in the United States – but it seems that most consumers still build a brand in their minds as a result of seeing the name repeatedly on Main Street, in malls and advertising in a range of traditional media.
The next step for Blue Nile was opening so-called Webrooms. These are display locations that provide a retail experience for consumers to see goods available for sale which can then be ordered on a PC, by smartphone or via a tablet. Sales can also be made online via in-store tablets and with the help of non-commissioned consultants. The firm said that its first Webroom beat expectations and provided a sales lift to the overall New York City-area market. Blue Nile opened its first Webroom in June 2015 at Roosevelt Field Mall in Garden City, New York.
Its second location is at the Westchester Mall in White Plains, New York, to open by early summer, while its third Webroom will be opened near Washington D.C. by mid-summer. Blue Nile Chief Merchandising Officer Julie Yoakum said the Webrooms are at "the other end of the spectrum from traditional jewelry stores, in terms of both physical look and shopping experience.”
All this leads to the new buzzword in retail marketing: the omni-channel approach. With marketing seeing rapid and large-scale changes, there is a move away from mass, “push”-based marketing, and towards more personalized, one-on-one communication with consumers, through the many channels and devices they use and with which they are comfortable. For retailers, the economic effectiveness of print media, television ads, and email blast campaigns are much less apparent. The marketers have been forced to revolutionize their approach mostly because consumers today are way ahead of most marketers.
Omni-Channel marketing essentially means that sellers need to provide a seamless sales experience, no matter what the channel or device. They need to be able to engage with consumers in a physical store, an online website or mobile app, through a catalog, or through social media. They must be able to buy products and services via a range of means: by calling a company by telephone, by using an app on their smartphone, or with a tablet, laptop, or desktop computer.
Because the consumer is at the heart of the experience, for retailers it means a lot more work. Firstly, they must regularly review the buying experience from the point of view of the consumer and continuously work to iron out any problems. They also need to always be measuring data: how do customers like to buy, what time is most convenient and so on. Consumers need to be segmented according to the various demographic groups with different marketing techniques for the different ages.
Then there is the need for constant communication with buyers and potential customers. They need ongoing marketing content and purchasing suggestions. And they need to make sure the technology works seamlessly: if a client starts the buying process from his home computer and then has to go out, s/he has to be certain that continuing the transaction from a tablet or smartphone is possible.
So, while omni-channel marketing may help firms remain competitive, it isn’t simple and it isn't cheap as it demands companies invest more in marketing. If they are able to answer a Tweeted question from a potential customer in less than an hour they stand a better chance of making the sale, but if they only see the tweet a day or two later, then the client has probably bought elsewhere.
By our Israel correspondent Abraham Dayan
