In a conversation with Internet Retailer, CEO Mark Vadon claims that Blue Nile could hit $1 billion in annual internet sales within seven years. Blue Nile had just over $250 million in sales during 2006.
The secret to Blue Nile’s success is pretty simple. They have a very specific niche and they do what they do very, very well.
Blue Nile’s niche is men looking for expensive jewelry–especially engagement rings. The average shopper on Blue Nile spends over $1,500, and the average spent on an engagement ring is $5,500–close to double the industry average.
If you are a Internet retailer and have not studied Blue Nile, you need to. One of the key components of their site is a sophisticated tool they call “Build Your Own Ring.” This tool allows shoppers to quickly search an enormous database of diamonds and ring styles to customize their own ring. It uses sliding bars to allow customers to modify various parameters, and reflects how each modification affects the final price.
Blue Nile was one of the first companies to develop this technology, and it is still fairly rare. This kind of tool is ingenious because it replaces the current cumbersome navigation found on most retail sites with an elegant way to really help customers find what they need.
Some third party software companies such as Guidester are now offering retail sites the ability to offer a similar tool. If you have a large inventory that overwhelms your customers with choices, you are a good candidate for this kind of technology.