Part Two: The Jewels of BlueNile.com: A Case Study of The Age of Digitalism and Its Memetic Impact on the Jewellery Industry with Focus on Blue Nile.:Essay by Anuppa Caleekal, B.A., M.Sc. Digitalism Magazine © Copyright 2009
Introduction:
With the dawn of the Age of Digitalism and the infancy of public interaction with the internet in the early 90’s, the memetic explosion of the internet also impacted the jewellery industry. By the late 90’s BlueNile.com Blue Nile Seattle- based virtual dot.com model of an online jewellery store was launched by Chief Executive Marc Vadon. This was to mark a tremendous impact upon the conventional “brick and mortar “retail jewellery stores in the upcoming years.
With the Age of Digitalism evolved Homo sapiens digitus.© ( Source:Caleekal,,A www.digitalism.org) an adaptive being globally wired by the internet. The human brain as Dawkins expressed in his book, “The Selfish Gene” is capable to replicate like DNA, and with the brain’s capability of rapid imitation, “memes” as coined by Dawkins become “units of cultural transmission” propagating ideas.(Source: Dawkins, The Selfish Gene, Oxford Univ Press, N.Y.,1989 new edition pages 193 – 200) As Emerson noted” great men are those who see that thoughts rule the world” and in the Cultural Age of Digitalism, ideas that rule the world have innovated a virtual world of E-commerce which has been adopted quite readily by Homo sapiens digitus© consumers over the years through a process of memetic connections.
In terms of the jewellery industry, the virtual reality of E-commerce with a full fledged virtual online store, i.e. one that does not have a real world retail store, became a reality with the launching of such enterprises as Blue Nile.
Consumer traffic underwent modification in terms of both attitudes and behavior. Those consumers that surfed the internet as early adopters of the technology began at a faster rate to participate in attitudinal associations of purchasing high item luxury goods such as diamonds with the behavioural act of “online internet traffic” with the click of a mouse for virtual window shopping and/or purchasing. The attitudes and behaviour of consumerism restricted to the real world “walk in traffic” of a brick and mortar retail store began to be challenged. Who would have thought that when online shopping emerged, consumers would eventually develop the confidence and courage to adopt spending large transactions of monetary exchanges on online shopping for high end luxury goods as opposed to smaller less expensive items? This adoption into high end luxury items has been facilitated by “memes” such as “emails”, “Facebook”, MySpace, community blogs, niche blogs that target specific interest groups, whereby ideas get replicated and transmitted automatically.
The time spent on the internet by Homo sapiens digitus increases with habituation and adaptation along with widespread access to the internet and personal computers per household. According to Anthony De Marco, in an article ,”Internet & Leisure Building Online Communities” has noted that, “ Forty-eight percent of leisure time is spent online”…and that “ 85 percent of people online are shopping”.
The article also notes that this big shift in the market is also characterized by the fact that people are empowered in the sense they can directly connect with the company as well as target others with similar interests via online community interest networks.
(Source:Anthony DeMarco, Senior Editor — JCK-Jewelers Circular Keystone, 3/14/2008 2:31:00 PM
http://www.jckonline.com/article/CA6540855.html?nid=2054&source=title&rid=177051610
The fact that the internet is a source of leisure entertainment is becoming synonymous with the right of citizenship and lifestyle norms. As the accessibility of the internet and computers becomes readily available to the widespread population, and as broad bands get faster, the social division of the have and have nots slowly diminishes, speeding absorption of global information and the diffusion of “memes” such as products, ideas and innovations.
Cyber Monday
Marketing techniques utilized by companies to facilitate and increase the rate of online shopping are also influenced by memes. Take for instance the concept of “Cyber Monday” which in the United States was coined in 2005 by Shop.org (part of the U.S. trade association National Retail Federation) marking the first Monday after Thanksgiving to significantly have an increase in online sales and was based upon the apparent increase in online sales on the Cyber Monday of 2004. Since then Cyber Monday caught on as a marketing technique and spread through online ecommerce sellers replicating the idea or meme automatically by offering special deals on that Monday.
Whether or not Cyber Monday significantly increased online holiday sales on that particular day was yet to be seen. Nevertheless, http://www.cybermonday.com/
continues to profile promotions for various ecommerce sites and for jewellery at
http://www.cybermonday.com/Jewelry-Watches/bc_15___.htm
According to market researcher ComScore Networks, “retail e-commerce spending for the first 31 days of the November – December 2008 holiday season $12.03 billion has been spent online, marking a 2 percent decline versus the corresponding days last year. However, Cyber Monday saw $846 million in online spending, up 15 percent.”
(Source):
http://www.comscore.com/press/release.asp?press=2607
Robert Hof in an article in businessweek.com notes, “people do most of their online shopping at work — 58% of them, according to comScore Networks. They often get started in earnest on Mondays, when they return from a frustrating weekend at the mall to their broadband connections at work.” (Source): Cyber Monday, Marketing Myth, by Robert D. Hof
http://www.businessweek.com/bwdaily/dnflash/nov2005/nf20051129_9946_db016.htm
Nov 29, 2005 )
With the fact that most workplaces have the internet, employees search and surf on the net from their workplace giving virtual sites like Blue Nile who do not have retail counterparts an advantage of traffic during work hours unlike “brick and mortar” retail stores that have the walk-in traffic usually after work hours .In 2007 other cross marketing techniques with Google and PayPal were used by Blue Nile during the holiday season offering free overnight shipping, 20% cash back on PayPal purchases and $100 off a diamond purchase in partnership with a Google promotion.(Source):
http://blogs.modernjeweler.com/blog/2007/11/26/online-jewelers-celebrate-cyber-monday/
These incentives provide the “wired” Homo sapiens digitus consumer, an association of holiday shopping to be stress less, available 24 hours a day 7 days a week, allowing privacy to shop when one desires either from home or work, and as part and parcel with the internet which in turn being a component of leisure and entertainment makes shopping “fun”. Blue Nile also has a referral program and many of their new clients come from referrals from current clients. The referral incentive program may be viewed at
http://www.bluenile.com/referral_rules.jsp
This is how “memes” or ideas are transmitted and replicated over the internet and this modern version of “word of mouth” is easily transferred via emails and other social network sites.
Roger’s Theory : Diffusion of Innovations and Applicability to Blue Nile
Everett Rogers in his book, “Diffusion of Innovations” which was originally published in 1962 explained the diffusion of innovations and the variables involved in the adoption of these innovations. Rogers explains that in social systems there are innovators, early adopters, early majority adopters, late majority adopters and laggards. (Source):Rogers(2003) Diffusion of Innovations(5th Edition) New York:Free Press.
The key variables which Rogers outlines in the diffusion –adoption process are the innovation, the social system, time and communication channels and an understanding of the clientele or target audience. Today in the Age of Digitalism, the speed at which an innovation is diffused within the social system is enhanced by the various high speed communication channels such as the internet, accessibility of ideas via cell phones, television broadcasting, You Tube videos and social networking such as Facebook.
The speed at which an innovation is communicated has never been as fast as it is today and not comparable to any other time in the social economic history of mankind.
Blue Nile is a classic example of an innovative breaking point in the jewellery retail industry. The company was initiated in 1999, early in the world of E-commerce, making it have the advantage of being an authority site in today’s global market and not a fly by night online store.
Blue Nile’s chief executive Marc Vadon was an innovator, venturesome , eager risk taker in the jewellery industry and in 1999 he set the stage for the diffusion and adoption of an online virtual jewellery store to its global audience Vadon entered E-commerce with a full fledged virtual jewellery store selling certified diamonds at a time when the social economic system was just getting engaged with the internet. So the timing was perfect in terms of embarking on the internet E-commerce business. As an industry leader of online retailers of certified diamonds and fine jewellery, he was able to have the backing of his private wholesale suppliers as early as 1999 which in time gave him the edge today to provide competitive pricing with fine quality jewellery on the internet.
For Marc Vadon the impetus to take this direction came from his own experience in buying a diamond engagement ring. He walked into Tiffany’s in 1998 and was not satisfied with the salesperson’s assistance and shortly waked out of the store empty handed. This made it clear to him that there was a void in the diamond engagement market in understanding the psyche of the male buyer. He had defined his primary target audience, namely the male population. Based on his own experience he understood that men dread going into a jewellery store being knowledge deficient of diamonds. In the March 19, 2008 article in The Economist, “Internet jewelers A Boy’s Best Friend” notes “85% of purchases from Blue Nile are made by men. On average they pay $6,200 per engagement ring and take three weeks to make up their minds. Yet the majority of visitors to the Blue Nile site are women, who browse and e-mail pictures of the stone and ring they want to friends for comment, and ultimately to the target fiancé-to-be”
(Source) http://www.economist.com/business/displaystory.cfm?story_id=10881758
Men seem to be more comfortable to purchase jewellery online as a 2008 study’s observation indicated that “2008 online purchases females significantly outnumbered males in selecting ‘internet auction sites’ where as males significantly outnumbered females buying from a jewellery- specific site or a brand’s own site”.
(Source) http://www.israelidiamond.co.il/english/News.aspx?boneId=918&objid=4000
The study’s findings were compared to other established studies analyzing gender shopping behaviour for jewellery and the findings illustrate that men are goal specific, know what they are looking for based on the descriptions provided by a female. Men don’t seem to have the patience to keep shopping, to find the product where as women do. That is why, online shopping appeals to men especially if a product is available online and requested by the female recipient. Making a purchase without aggressive salespeople, in the privacy of his own time and place and then to be able to log off makes this method of purchase more conducive to the male shopping behaviour. Blue Nile sold a 10 carat single diamond for 1.5 million to a male shopper in 2007, from its 1-800 number on their website. The buyer apparently had made smaller purchases in the past from Blue Nile , so was a return customer for a far bigger purchase.(Source Forbes.com, “The Digital Diamond Market, by V.M Barret , 10:25:07)
In our discussion of Everett Roger’s Diffusion of Innovations Theory, we have discussed how the key variables which Rogers outlines in the diffusion –adoption process being the innovation, the social system, time and communication channels and an understanding of the clientele or target audience is applicable to the Blue Nile success story..
(Source):
Rogers, Everett, (2003). Diffusion of Innovations, 5th Edition, New York, NY: Free Press
Rogers Everett, (1962) Diffusion of Innovations, Glencoe: Free press, Ch.7 Roger’s
The four stages outlining Rogers Diffusion of Innovation Theory are Knowledge, Persuasion, Decision, Implementation and Confirmation.
These stagesof technological innovation are also applicable to understanding the success of the Blue Nile Internet enterprise.
1. Knowledge: involves exposure to the understanding of the innovation’s function. This is where Blue Nile pioneered in providing the target audience with knowledge of the diamonds to the laymen. In traditional brick and mortar retail stores the salespeople are empowered with the knowledge of diamonds as the source to educate the consumer. Blue Nile empowers the client. In Blue Nile’s case there is the understanding of the male psyche by providing a knowledge base. Both the male and female consumer are empowered and not dependent on being educated by the salesperson. Education and product knowledge to its audience is critical to the Blue Nile success of diffusion of its innovation of selling certified diamonds online. Their education link is: http://www.bluenile.ca/diamond-and-jewellery-education
The education section provides a knowledge base on all the jewels of Blue Nile from Diamonds, Platinum,18k Gold, Gemstones and Pearls. All with the objective of making the consumer the expert contrary to traditional retail sales. This allows the consumer to learn at their own pace without any sales pressure and the provision of telephone and email contact capabilities allowing the privacy issue as well.
Blue Nile Global Telephone Lines
Canada:
888-565-7609
US:
800-242-2728
UK:
0800 358 1981
Ireland:
1800 944 544
Other EU:
+353 1 487 7850
All other countries:
+1-206-336-7900
emails serviceca@bluenile.ca. contact directly to the company for further clarification
2. Persuasion is the forming of a favorable attitude by the consumer.
The persuasive incentives provided by Blue Nile are favorable for positive attitude formation.
Blue Nile’s Web site is appealing to the male population.
Good assortment of jewels in various, cuts, shapes and quality appealing to the female eye. See http://www.bluenile.ca/diamond-search
Bluenile.com offers about 60,000 diamonds and 100 settings with an efficient search process to find the kind of style you want or design your own setting with loose diamonds. See http://www.bluenile.ca/diamond-search?filter_id=1
Fancy diamonds are also available. See
http://www.bluenile.ca/fancy-color-diamonds
For Canadian diamonds see http://www.bluenile.ca/canadian-diamonds
Merchandise is lowest price for best quality on the internet as well as in comparison to retail stores.
The convenience of shopping accessibility 24 hours 7 days a week makes it
Part of the leisure and entertainment preoccupation that the internet offers and shopping online has become persuasive over the years.
In an article it was noted online shopping for instance among Canadians is growing as a comfortable pastime and are noted to using the internet for jewellery purchases. This article observed that the “busiest online shoppers were between the ages of 25-34” because of them being comfortable with the internet and having access to credit money. (Source) : “Online shopping complements traditional retail shopping” by Luann Lasaile, The Canadian Press, Nov 17/08
http://ca.news.yahoo.com/s/capress/081117/national/statscan_internet_shopping_2
The ability to learn about product quality and price At Blue Nile website allows the consumer to become a comparison shopper with retail stores. This in turn encourages the consumer to make the best decision based on assortment, price, quality, and convenience and incentives provided.
Incentives provided by Blue Nile help in the next stage of decision making for the consumer.
3. Decision stage involves commitment to the adoption. What are the incentives that help in making a decision to commitment?
Blue Nile website offers the following:
Fed-ex Shipping on all purchases with free Fedex during the Christmas holiday promotions. For instance, for Valentine’s day 2009 Blue Nile offers this beautiful heart which says it all. Order by 6 PM EST on Friday, February 13 and get free FedEx Priority Overnight® with Saturday Delivery. Plus, save 10% on fine jewelry by entering the code LOVE19 in the reference code box at checkout. Contact Blue Nile for more details
30 day returns
24 hours a day 7 days a week business accessibility appeals to privacy and flexibility of time for consumer
Introduction of Bill me Later provides flexibility of purchase without a credit card available to U.S customers.
Wide range of changing inventory with zoom in pictures unlike many retail stores where inventory remains in store for long periods of time
Free packaging and gift card
Grading for all certified diamonds
Professional appraisals for diamond and gemstone jewellery $1000 and over
Expert Live Chat
Diamond comparison based on quality and price range
Blue Nile has less overhead convincing the consumer of approximately 35 percent less expense comparison to retail prices of diamond rings
Recently purchased loose diamonds by past customers with price and specifications are displayed on Blue Nile’s website. Purchasing Loose Diamond size from .50carat total weight to 1.50carat weight is moving to the internet according to an article entitled “Out of line?
By Duncan Parker, October 2007 Jewellery Business Magazine,
http://www.jewellerybusiness.com/1/index.php?option=com_content&task=view&id=566&Itemid=56
Recently purchased diamond engagement rings showing pictures of rings along with price and specifications
Customer Referral program and purchase discounts
Legitimacy as an internet authority site since 1999:
“In contrast to chain-based retailers, the two largest jewelers ranked in the 2008 Top 500 Guide – Blue Nile and Bidz.com Inc. – grew their 2007 web sales by 27% and 41.7%, respectively. With 2007 web sales of $319.3 million vs. web sales of $251.6 million in 2007, Blue Nile owned 30.37% of the online jewelry market as measured by the Top 500 Guide.”(Source) Jewellery #1 on internet
Wednesday, August 27, 2008 http://www.internetretailer.com/dailyNews.asp?id=27574
Global Prominence Means legitimacy and success to the consumer: Blue Nile Serves 34 countries see http://www.bluenile.ca/where_we_ship.jsp
“The company, Blue Nile No. 49 in the Internet Retailer Top 500 Guide, noted that international sales through its Canada and United Kingdom web sites totaled $4.5 million in the third quarter. Blue Nile recently relaunched its web sites for those countries to support local customer service, sales in local currencies and more products. The company also recently opened an office in Dublin, Ireland, to provide customer service for UK customers and serve as a base for further European expansion.” http://www.internetretailer.com
Fast efficient custom design service
Wire transfer discounts
Reliable secured sites for payment
4. Implementation involves putting a decision to use usually customers take about 3 weeks to make a decision and implement the choice into a closing sale and purchase. All the above factors assist in making this stage successful. A low pressure sales pitch, the opportunity to ask product questions, the opportunity to educate one self on jewellery especially with an online diamond education module, frequently asked questions from other customers, a good online search tool which is user friendly and functions well in exploring the site.
5. Confirmation the final stage involves reinforcement based on positive outcomes from implementing the decision. Indicators of this stage are seen in customer testimonials, referring other friends through referral program, repeat customers for further purchases , satisfaction of prompt fast delivery and packaging, all of which Blue Nile has incorporated to provide a positive outcome.
Challenges Ahead for Blue Nile
Live Diamond Auctions: In the age of Digitalism, Homo Sapiens digitus can now have a two way auction for buyers and sellers at DODAQ . DODAQ is the first online certified diamond exchange auction venue at www.dodaq.com
There is also the jewellery online marketplace https://www.idexonline.com
Client target audience
Tapscott in his book, “ Grown Up Digital: How the Net Generation is Changing Your world(McGraw Hill 2008) reminds us that the “Net gen-ers” between the ages of 11-31 are very computer savvy, quick and open to innovations and diversity. They are an internet group with tastes and are interconnected and transmit “memes” cultural transmission of ideas, fashion, tastes and styles via the internet in the Age of Digitalism. They cannot be underestimated in their consumer power and as they increasingly define the internet generation, they will be a client target audience needed to be addressed.
Another target audience that will become increasingly apparent are individualistic career women and the need for them to reward themselves with jewellery not contingent upon a dependency towards men .These women like “the right hand ring, cocktail flamboyant rings , as symbols of achievement and individual success. This is something apart from the traditional male – female shopping behaviours.
Ethnic diversity along with global interdependence mobility and travel also influences individualistic tastes in jewellery and symbolic representation that jewellery represents. As Blue Nile attracts a global audience, ethnic diversity in tastes and styles of jewellery may also need to be addressed.
New Titans of the Jewellery World
China, Saudi Arabia and Turkey are emerging as new frontiers in the jewellery world. Their artistic, exotic and culturally influenced designs in jewellery would open challenges to conventional designs.
Designs based on Economic Constraints
In todays hard economic times, many consumers are challenged by monetary constraints. Sometimes this means being more practical by opting for diamond wedding bands rather than engagement rings. Also some professions such as those who have to wear surgical gloves and are restricted to wearing jewellery on the job site may opt for bands or bezel settings to fit their lifestyle and budgets.
Wholesale Suppliers
The future of internet suppliers may eliminate the middle man suppliers as polishing companies and manufacturers might be the future suppliers. At present whole sale suppliers are able to provide Blue Nile with competitive online pricing beating retail markups. With possible competition Regulation Acts that might take effect to give fair existence to the retail diamond market, the future of regulatory market measures in the diamond industry may pose restrictions to online diamond ventures that solely operate on the internet.
Keeping up with the Growth of Jewellery Auctions
Jewellery auctions such as http://www.ebay.ca and www.Bidz.com are popular . Auctions appeal to women as the industry research indicates. Bidz.com started up another online store called http://buyz.bidz.com/Buyz/ to appeal to those consumers who want gold and brand name jewellery and watches at fixed prices.Furthermore to keep up with trends Bidz.com has initaited an Arabic version of its online auction site, hired Arabic speaking marketeers,plunged into online and traditional Arabic language advertising appealing to its middle eastern consumers.In 2008 not only has Bidz.com launched an Arabic language version of its online auction site but has also completed a Spanish version.
Jewellery Repair Popular Among Wealthy Shoppers
Jewellery repair is becoming a dying occupation and the service is becoming increasingly difficult to find. Many high -end malls offer this within the mall or by retail jewelery stores. Research indicates that wealthy shoppers prefer to come into a jewellery retail store and have their personal jeweller take care of their repair needs. There is also the element of trust given to a family jeweller when releasing an expensive piece which not only is precious in value but also in attached sentiment.
Fashion Jewellery
With the current 2009 global financial crisis, fashion jewellery, costume jewelry, designer jewelry, imitation jewelry, in silver as opposed to fine jewellery set in gold and platinum most likely will continue to heighten its growth potential. There is already over the past years a consistent rapid growth in this sector with the United States being the prominent market for fashion jewelry having a share of 31% of the total global fashion jewelry sales in the year 2006 with India and China rising in sales.Source: http://www.fashion-jewelry-manufacturers.com/jewelry-industry.html
Branding and Fashion Jewellery
Along with the challenge of the rising growth of fashion jewellery sector comes branding. As fine jewellery has its own branding,the competition of fashion designer brands that are less expensive than brands of fine jewellery will be more economically accepted by economic challenges.
Eco-Friendly Wedding Style
Global ternds are going Green and Ethical. This meme morality which transforms into a meme lifestyle has also entered the jewellery industry with demand among consumers for non conflict diamonds and to challenge conventional mining practices. http://www.brilliantearth.com/ has grown as an offshoot of consumer demand for ethical accountability. As a result the site guarantees that all their diamonds are conflict-free. The popularity of Canadian diamonds has increased based on this demand.
http://www.brilliantearth.com/diamond-jewelry/ also support the No Dirty Gold campaign, which reuses precious metals from recycled jewellery and industrial products to minimize additional mining.
Man-made Diamonds
With the economic crunch and the Green and Ethical movement, we could see the challenge in the rise of demand for man made diamonds.
Lifestyle Choices
Along with changing lifestyles, traditional patterns of marriage and relationships are in constant dynamic change. Conventional hetro sexual marriages are no longer viewed as the dominant meme. The gay movement has placed a significant impact on how realtionships and marriage are conceptualized. This will be a challenge to the online jewellery industry to evolve and adapt to this target audience in terms of styles and designs.
Collectors of Antiques and Heirloom Estate Jewellery
This attachment to the past glorious designs and styles will be a perpetual challenge.For the collectors of antique and estate jewellery sentiment is derived by the tactile attachment of the past. To feel and wear a piece of a past heritage and sentiment is not transferable by replicas or imitation jewellery.
In Part Three The Jewellery Industry and Hybrid Financial Models, stay tuned for a look at hybrid models of the jewellery industry that utilize both, the conventional retail as well as the internet as their financial models.