What Does It Mean To Online Jewelers If Blue Nile Opens Physical Stores? A New Era In the Horizon?

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Now that online retailers like Amazon and Piperlime (a Gap company) are opening physical locations, will clicks-to-bricks be the next frontier for retail? More importantly, now that jewelers have learned to compete with Blue Nile online, they will have to compete with a plethora of Blue Nile stores? It just may happen sooner than you think.

Online retailers are venturing in the world. Some, like Athleta, and Bonobos are opening small showcase shops.

And Blue Nile is testing the waters with couple of branded boutiques. At present, shoppers can touch and try selected pieces of the e-tailer’s bridal product there, but they don’t walk out with a bag, either Blue Nile’s or Nordstrom’s. They still need to buy online.

“This is a theme that’s happening everywhere,” says Brian Watkins, president of Seattle-based Ritani,whose bricks-and-clicks model has nearly 200 prestige jewelers as partners. “It’s an inevitable retail trend that consumers will expect more and more integration of online and offline.”

But for a pure-play e-tailer selling on price to expand offline–with its attendant store overhead and sales tax implications–it means the price advantage goes away. And Blue Nile, despite being a household epithet among jewelers competing with it, is not that well known among consumers. Its name recognition ranks far below that of Kay, Jared, and other jewelers.

Plus, says Watkins, the skills required for an offline retailer to go online are vastly different from an online retailer expanding offline. He cites Tiffany as a good example of offline retailer that have gone online successfully. Tiffany does so by curating the selection of product on its website.

But an online retailer that never had a physical store needs to figure out how to translate the online experience to an offline environment. Would an e-tail jeweler open full-line jewelry stores?

And is click-and-mortar a threat to jewelers?

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It’s definitely coming, says Mark Keeney, vice president of Ritani. “Consumer trends have become so clear that online or offline alone isn’t going to cut it. I think it’s inevitable that Blue Nile or a similar company will eventually have a local presence.”

But it doesn’t have to spell disaster for jewelers. “Retailers have one, five, maybe even 10 years to figure out how to create a differentiated experience,” he says.

* I found this article on the Centurion newsletter and I think it is quite interesting to share.