Blue Nile and Diamond Retailing
1. What are some key success factors in diamond retailing? How do Blue Nile, Zales, and Tiffany compare on those dimensions?
Key drivers of customer purchases in diamond retailing include quality and range of products offered, reputation, professional advice offered, and customer perception and emotional bonds, including a positive buying experience and customer service. Success is also dependent upon obtaining economies of scale through such avenues as preferential access to resources, an effective supply chain and marketing strategy, as well as an ability to control facilities and operating costs and manage inventory effectively.
Blue Nile’s, Zales’, and Tiffany’s key success factors in dealing with customers are related to the characteristics of their individual target markets. Blue Nile, for example, offers high quality diamonds and fine jewelry online that are comparable to Tiffany’s but with markups that are lower than Tiffany’s and Zales’. Blue Nile, which was founded in 1999, focuses on customers who want good value and who prefer to shop conveniently from home and without incurring high pressure sales tactics. They also provide customers with easy-to-understand jewelry education, as well as the ability to design custom jewelry. However, its customers must forego a hands-on purchasing experience as well as the instant delivery offered by Tiffany’s and Zales’ retail locations.
Tiffany, which opened in 1834, is an independent, specialty jeweler that offers premium-priced diamond rings, gemstone and fine jewelry, watches, and crystal and sterling silver serving pieces. Tiffany’s exclusivity and prestigious brand image, extensive service, and fashionable locations allow it to maintain and gain luxury market share domestically and globally. In contrast, Zales, a specialty retailer of diamond fashion jewelry and diamond rings in the U.S. since 1924, has high name-brand recognition and appeal to value-conscious shoppers. Zales’ chain of
Key drivers of customer purchases in diamond retailing include quality and range of products offered, reputation, professional advice offered, and customer perception and emotional bonds, including a positive buying experience and customer service. Success is also dependent upon obtaining economies of scale through such avenues as preferential access to resources, an effective supply chain and marketing strategy, as well as an ability to control facilities and operating costs and manage inventory effectively.
Blue Nile’s, Zales’, and Tiffany’s key success factors in dealing with customers are related to the characteristics of their individual target markets. Blue Nile, for example, offers high quality diamonds and fine jewelry online that are comparable to Tiffany’s but with markups that are lower than Tiffany’s and Zales’. Blue Nile, which was founded in 1999, focuses on customers who want good value and who prefer to shop conveniently from home and without incurring high pressure sales tactics. They also provide customers with easy-to-understand jewelry education, as well as the ability to design custom jewelry. However, its customers must forego a hands-on purchasing experience as well as the instant delivery offered by Tiffany’s and Zales’ retail locations.
Tiffany, which opened in 1834, is an independent, specialty jeweler that offers premium-priced diamond rings, gemstone and fine jewelry, watches, and crystal and sterling silver serving pieces. Tiffany’s exclusivity and prestigious brand image, extensive service, and fashionable locations allow it to maintain and gain luxury market share domestically and globally. In contrast, Zales, a specialty retailer of diamond fashion jewelry and diamond rings in the U.S. since 1924, has high name-brand recognition and appeal to value-conscious shoppers. Zales’ chain of