Group 13 – Blue Nile and diamond

retailing
 Introduction
 A dilemma that many jewellers face – should I lower the price or let customer walk away ?

 2008 – a tough year for Diamond wholesalers and retailers – situation worsen for when
world’s largest diamond producers refused to cut supply

 Though some retailers survived the diamond downturn business many other diamond
business filed for bankruptcy protection.

 Zales closed 100 stores that year

 With the shrinking of customers – competition got fierce and every retailers were looking for
a way to succeed in such situation.
 Blue Nile:
Philosophy of business – offer quality diamond at economical price and guide customers.

Apart from educating, give customer choices for customization as 4C to “build their own ring.”
Kept a low mark up – because of low inventory and warehouse expense.

Downside – low brand value and no hands on experience; to overcome this company offered 30
days money back guarantee.

Further expansion in Canada and U.K and by 2007 an established player – a very efficient and
quick supply. Started offering non-engagement products.

By 2016, it opened “Webrooms” service where customers could feel the products. By Nov. got
acquired by another group.
 Zales
Strategy - offer down payment of one penny and a dollar a week

Zales sold jewelry for all classes. Be it teenagers, working class or high end customers.

Tough competition from Walmart and Costco forced Zales to change its strategy to
move away from low-end reputation but backfired due to delays.

New CEO started transition to return to the promotional retailer role and focus on
diamond fashion jewelry and rings but was hurt due to high fuel price and housing
prices.

Cost cutting strategy was implemented – closed 100 stores, reduced inventory and cut
manpower – worked

Got acquired in 2014

 Tiffany:
Opened in 1837; got popular with silver designing, and enjoyed a strong brand since then, went public
in 1987.

Company was selling high end products, non gemstone products and other products as watches or
silver trays.

The company has a global reach, also sells through online channel.

58% of sales which came through direct channel were mostly non-gemstone, in contrast to half of sale
in retail belonging high end products (gemstone jewellery and diamonds)

Has manufacturing facility ( accumulate 60% of jewellery) also source from third party. Has a retail
service centre to fulfil retail store and customer fulfilment centre for direct channel.

Entered into rough diamond business since 2003.

Deep association with quality and luxury and enjoys a high margin.
Continuation……

 Omni Channel retailing was utilized at some point by

all three companies mentioned here. Blue Nile which
is primarily a online store, started their Web rooms.
They could use showrooms or retail stores to enhance
customer experience for high end products. Similarly,
Tiffany as well as Zales could have used online
retailing along with their showrooms . This would help
them to reduce inventory cost along with facility
costs.
Thank You