Blue Nile opens ‘webroom’ in Long Island mall
Blue Nile learned a number of things from its test of jewelry cases at Nordstrom. It learned that most who came to the cases weren’t Nordstrom customers, but people who wanted to shop at Blue Nile in a physical store environment. The online retailer also learned that customers who ordered products through the Nordstrom counters spent eight percent more than those who shopped solely online. After its Nordstrom test, what else could Blue Nile do but open a store of its own?
Last week, Blue Nile announced it would open a 325-square foot "webroom" store in the Roosevelt Field Mall on Long Island. The retailer previously had one of its Nordstrom test cases at the same mall.
"It’s all about carrying on tradition of what made Blue Nile really successful … which is the experience," Blue Nile CEO Harvey Kanter told Yahoo! Finance. "Millennials want to be in the driver’s seat, whether it’s on a PC, phone or tablet, or now in New York, in-store … it’s all about the experience."
The Blue Nile experience in its new webroom, according to The Seattle Times, will involve three cases of jewelry showing various ring styles. One of the six employees on staff will be able to walk customers through the more than 250,000 stones Blue Nile has to offer using "an oversized tablet." Customers, once decided, can then place the order online from the store. Customers can pick their purchases up at the store, which also offers to clean the jewelry for free.
"We’re known for making diamonds and fine jewelry simple by providing education, mobile comparison tools and non-commissioned advice so shoppers can get great quality without overpaying," said Mr. Kanter on an earnings call (via SeekingAlpha) with analysts last month. "And now, we’re giving shoppers in the New York area the chance to try jewelry on in person at our new webroom concept experience at Roosevelt Field on Long Island, testing our no pressure online experience in the physical environment of a retail showroom."
As a number of articles pointed out, Blue Nile is among a small but growing number of online merchants including Amazon and Warby Parker opening showrooms and physical stores as consumers seek to shop when, where and how they find most convenient.
- Blue Nile (NILE) Harvey S. Kanter on Q1 2015 Results (Earnings Call Transcript) – SeekingAlpha
- Blue Nile: Online retailer gets physical with New York store – Yahoo! Finance
- Blue Nile opens first stand-alone store in Long Island mall – The Seattle Times (tiered sub.)
- Nordstrom makes room in stores for online jewelry – RetailWire
Discussion Questions
Do you expect a significant uptick in the number of e-tailers opening physical shops over the next couple of years? Will most shops opened by e-tailers be full service traditional stores or showrooms like that offered by Blue Nile?
Poll
BrainTrust
Tom Redd
Global Vice President, Strategic Communications, SAP Global Retail Business Unit
Omnichannel isn’t just about brick-and-mortar retailers developing e-commerce and then providing an integrated shopping experience. It’s also about web-based retailers needing to establish a physical footprint, and the Blue Nile experiment is a good illustration. In a category like fine jewelry, there will always be a substantial number of customers who need to see the merchandise before buying (especially higher-end diamonds), so even a well-conceived website like Blue Nile will eventually need to reach those shoppers in other ways.
Many entries have been made here on RetailWire about the continuing fiscal significance and relevancy of the physical store. The Blue Nile, Warby Parker and Amazon are demonstrating their understanding of the importance of personal touch and “experience” by opening these shops. We will continue to see this evolution in the months and years to come. The exciting metric for this evolution will be the revenue per square foot these shops will generate. These “webrooms” will be relatively small and use technology to extend their inventory and options for their customers.
This evolution is yet another wake-up call for retailers and brands alike!
Yes. This will be the direction of many web-only retail operations. Many groups that do this will be the ones that offer focused assortments—like Blue Nile and luxury apparel retailers that operate online. Pamella Roland luxury styles would be another solid example. Her designs are not cheap and are targeted at the affluent and the Hollywood elite.
All depends on what you think of as significant.
Will there be more? Of course.
Will it be 30, 20 or even 10 percent of all e-tailers? Not in the next couple of years. The business models may work if you are selling jewelry, but they break down at when the product is dog treats.
As for the second question, I’d bet on Blue Nile-like showrooms. After all, if these folks wanted to be physical retailers, they’d open stores.
Yes there will be more, but what counts as opening a physical store? Does renting space from an existing retailer count as a physical store? Does use of a mobile unit count as a physical store? Does a pop-up store count as a physical store? There are many ways to satisfy consumers’ need to see and touch products. Definitely experiments will continue as e-trailers explore the physical aspect of omnichannel.
This effort makes a great statement in support of the power of human interaction. Three cases of ring styles is not a lot. And showing the gem stones on an oversize tablet is not the best way to get shoppers excited by a diamond, let’s face it.
But having a real human in front of you to be “of service” during a process that is so personal has to make a huge difference in peace of mind and emotional satisfaction. Those subconscious elements of human influence that shoppers can’t articulate likely are more important than the obvious rational benefit of better product education.
Let me just chime in with Camille on this one. While I do see many more showrooms popping up, methinks store-within-a-store, pop-ups, mobile stores and other such creative approaches will certainly be amongst the many.
For my 2 cents!
The desire to open showroom stores in areas with proven interest and sales that would support return on investment through growth is expanding. Thanks to a population drowning in un and under employment and empty malls, the prices for this move have never been better. Getting enough space with order pickup and shipping being a big part of the plan will increase longevity and return on investment. It is an investment you will most likely be glad you did or wished you did.
I think there will be many more online retailers testing pop-up shops. That way they can learn whether a store or showroom is better for their individual business. Shoppers want to be able to experience the merchandise and talk with someone in person to get product information. This is especially true when it comes to more expensive products.
Yes, with Warby Parker, Nasty Gal, Blue Nile and several others moving from online roots to open physical stores, this is definitely a trend that is working and will continue. Scott Galloway from NYU has notably called a peak in the era of online pure plays and this trend is one indicator that he may well be right.