Blue Nile's Blinged-Out Bargains
By
Rick Aristotle Munarriz
December 2, 2008
|
Desperate times call for desperate marketing. So upscale jeweler Blue Nile (Nasdaq: NILE) is rolling up its discounting sleeves and launching a Daily Gem promotion. Every night at 6 through Christmas, the online retailer will feature a daily deal on a high-end item.
First up: a three-carat diamond eternity bracelet, sale priced at $1,900. While that's certainly not cheap, it's a 36% discount off the regular $2,950 price. If you'd like a piece of those savings, you'll have to act before 6 tonight, when the next deal takes its place.
Blue Nile would probably prefer to promote itself the old-school way. Web-savvy romantics already know that the site offers choice engagement rings at fair prices. However, after watching domestic net sales dip in each of its three latest quarters, the e-tailer doesn't want to come up empty over the holidays. It has to market creatively to keep sales coming in, even if that means channeling the daily-deal spirit of sites like Woot and Amazon.com's (Nasdaq: AMZN) Gold Box. Even Overstock.com (Nasdaq: OSTK) is getting in on the daily-deals bandwagon with its "12 Days of Christmas" promotion.
Blue Nile must also compete with low-end jewelers who aim to make the process more exciting, like Bidz.com (Nasdaq: BIDZ). A visit to Bidz' front page plunks viewers right into the middle of a dozen time-sensitive jewelry auctions, each counting down to its final seconds.
The Daily Gem is a near-term positive for Blue Nile, since the site had to do something to win back traffic. When a bricks-and-mortar chain like Tiffany (NYSE: TIF) is growing more quickly than you are -- or at least shrinking more slowly -- you need shake things up. This sort of marketing push could help make Blue Nile a daily visit for deal hunters on high-end jewelry.
My fear, of course, is that Blue Nile will never be able to return to its former higher-priced ways. Will shoppers still come once the daily deals depart in January, or will the 6 p.m. sales have to become a daily staple, like Amazon's Gold Box? Twenty-three days of deals are enough to spoil just about anyone.
Other proposals to ponder:
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