Blue Nile's Extreme Makeover

• Email
• Share
• Print

For its 10^th birthday, what do you give the e-commerce site that has everything? If you're Blue Nile (Nasdaq: NILE), you indulge yourself with the first extreme makeover since your 1999 launch.

The upscale jeweler is beefing up its site, presumably in an effort to make it easier to use and more attractive to female shoppers. Among BlueNile.com's new features:

• Product images are now more than four times larger than they used to be, giving big-ticket buyers a healthier representation of what they're ordering.
• The "build your own ring" feature now sports a friendly user interface, more customizable features, and a visual representation of the ring as it is being built in the virtual shopping cart.
• Hovering the mouse over a product will generate a description bubble, keeping browsers on the same page instead of forcing users to click and go elsewhere for the detailed information.

This morning's Wall Street Journal claims that the changes aim to make the site more appealing to women. That's an odd goal. This isn't Lowe's (NYSE: LOW), which set itself apart from larger rival Home Depot (NYSE: HD) by toning down the sawdust and testosterone. Lowe's penchant for clean aisles, cheery associates, and well-lit stores eroded Home Depot's market share back when the going was good, before the housing bubble burst.

Does Blue Nile really have to play the gender card? Most fine-jewelry customers are men shopping for their wives, girlfriends, or, uh, people who are not wives or girlfriends. Does Blue Nile really need to impress the ladies with high-res snapshots?

Blue Nile seems to think so. It feels that a slicker site will enhance its brand. There may not be much of a difference between a diamond ring from Tiffany (NYSE: TIF) and one from a rival real-world jeweler, but there's prestige in that Tiffany box.

Blue Nile also needs to keep an eye on rival online discounters. It doesn't necessarily compete for business with auctioneer Bidz.com (Nasdaq: BIDZ) or most of Amazon.com's (Nasdaq: AMZN) offerings, but if a discounter comes up with an engaging tweak to the selling process, Blue Nile has to pay attention or seem behind the times.

Any makeover is risky, but Blue Nile is smart enough to mix things up during the seasonally sleepy part of the year. It's also shrewd timing to break out the makeover at a time when the jewelry market is in a funk. When the economy does bounce back -- and with it, shoppers' appetite for shiny new jewelry -- Blue Nile will be sitting on a spruced-up site that's already been broken in.

Blue Nile's giving itself a makeover that may not pay off right away. But for a 10-year-old, it's surprisingly patient.

Other proposals to ponder:

• Green Shoots for Blue Nile
• World's Scariest Stock: Blue Nile
• Act Fast and Kiss Your Returns Goodbye