Blue Nile

Blue Nile and Diamond Retailing

Q1. What are some key success factors in diamond retailing? How do Blue Nile, Zales, and Tiffany compare on those dimensions?

The Success in retailing business depends upon a number of factors which include customer Service as well as the costs involved. Blue Nile has a particular favorable position in item assortment and item accessibility since clients can manufacture their own particular ring by browsing online a stock of around 75,000 stones they also get 30 days money back guarantee, whereas customers at Tiffany and Zales do not get much variety in their stores. The Customers at Blue Nile have to wait for their orders where you can purchase diamond jewelry at the spot on Zales and Tiffany. As far as the brand is concerned Tiffany has been in the business for a very long time and their brand is associated with fashion and luxury along with the quality. Blue Nile also keeps their margins lower then Zales and Tiffany, but they also do not have to bear the inventory cost unlike Tiffany and Zales. Blue Nile also focuses on more customization then the Zales and Tiffany. Moreover Blue Nile works basically from one distribution center in the United States where as Both Zales and Tiffany have numerous stores many of which are located in posh localities. Looking at the business model of Blue Nile it could be inferred that they might have to bear more transportations costs then Zales and Tiffany.

Q2. What do you think of the fact that Blue Nile carries about 30,000 stones priced at $2,500 or higher while almost 60 percent of the products sold from the Tiffany Web site are priced around $200? Which of the two product categories is better suited to the online channel?

Due to the difference in the way both Tiffany and Blue Nile do business both have their own reason and approaches to the online channel. In case of Blue Nile they it could be clearly seen that they operate from one location more over they do not keep any inventories this...