November 30, 2004, 12:00 AM

Flowers / Gifts / Jewelry: Where the Internet changes the business

(Page 2 of 3)

1-800-Flowers.com Inc.
1600 Stewart Ave. Westbury, NY 11590
Date Launched
August 1995
Unique visitors (monthly)
1,804,000*
Annual Web-Based Sales
$307,470,000 (yr end June 2004)
Vendor Relationships
Site Design
In-house
E-Commerce Platform
In-house
Web Hosting
ATT
Site Search
Endeca Technologies
Content Management
In-house
Order Management
In-house
Payment Processor
Paymentech

Fulfillment
BloomLink, Internal, Floral and Gift Partners
Affiliate Marketing Management
LinkShare

Search Engine Management
In-house
E-Mail Marketing
Exmplar
CRM
Oracle/SAS
Web Analytics
Coremetrics

Content Delivery Network
Akamai Technologies
*comScore Networks report, October 2004


BlueNile.com
Building a national brand

Brand equity is tough to come by for jewelers, but not for BlueNile.com. Since its debut in 1999, the Seattle-based jeweler has built national brand recognition in a business in which only a few companies come to mind when consumers are asked to name a jeweler.

"Blue Nile has built a lot of consumer trust in a short period of time despite doubts that jewelers would ever succeed online," affirms Jim Okamura, a senior partner with J.C. Williams Group. "They are doing all the little things right that a specialty retailer needs to do to be a strong player online."

Unlike many of its competitors that use the web to leverage their other retail channels, Blue Nile is an Internet pure play that has established itself as a jewelry authority whose store is online. Customers can use the site`s Interactive Diamond Search to tap into a wealth of information about the more than 50,000 diamonds in stock. The tool delivers detailed information about cut, color, clarity, and carat, a.k.a. the four Cs of diamond buying. The tutorial helps customers quickly zero-in on the type of diamond, setting and price point they want.

"The experience is different than in a retail store where consumers are dependent upon what the jeweler has behind the counter and reliant on the salesperson to lead them to the right diamond and setting," says a Blue Nile spokesperson.

The company, which went public in May 2004, projects sales of $162 million for the year, up from $129 million in 2003. In the first nine months of the year, Blue Nile was profitable.

Much of Blue Nile`s sales comes from engagement rings, which generate an average ticket of more than $5,000.

Recent enhancements to the site include a drawing of a virtual hand that allows the customer to view how the finished product will appear from above and below when worn. Service is another hallmark of the company`s reputation. During the third quarter, Blue Nile shipped 99.9% of its packages on time and answered 85% of incoming calls before the second ring.

"Blue Nile has instilled trust in the customer, which is why they are hitting the mark just as the jewelry business is rebounding," says Okamura. "They are raising eyebrows in this industry."

Blue Nile Inc.
705 Fifth Ave. South Seattle, WA 98104
Date Launched
1999
Unique visitors (monthly)
691,000*
Annual Web-Based Sales
$162,000,000 (`04 est.)
Vendor Relationships
Site Design
In-house
E-Commerce Platform
Oracle, In-house
Web Hosting
In-house
Site Search
In-house
Content Management
In-house
Order Management
In-house
Payment Processor
Cybersource

Fulfillment
In-house
Affiliate Marketing Management
LinkShare, In-house

Search Engine Management
In-house
E-Mail Marketing
In-house
CRM
In-house
Web Analytics
In-house
Rich Media
In-house
*comScore Networks report, October 2004


GiftCollector.com
Gift hot spot

Fine china with images of buffaloes or black bears may not always sell well in Charlottesville, Va., the home town of Sara Blakewood Norment`s gift shop and web site, GiftCollector.com. But they`re usually popular somewhere, and Norment finds the hot spots by analyzing her web traffic. "I`ve found that different things sell well in different areas, because we can see trends in different parts of the country," she says, adding that she looks for local and regional trends to support inventory buys.

Norment, president and founder of GiftCollector.com, a site that grew out of a tiny gift shop five years ago, is able to serve niches overlooked by major retailers, she says. "Department stores pick certain patterns of china and tableware that sold best the year before," she says. "They like to keep Lenox and other major brands, but our customers don`t always want that."

When Norment left a pharmaceutical career more than 10 years ago to buy the Chimney Corner gift shop in Charlottesville, it didn`t take long for her to realize that the web offered a way to expand her market beyond her local community. In her first year with the gift shop, she doubled its sales to $300,000, but that wasn`t enough for the ambitious Norment.

She has learned to build a national customer base with an online gift registry and effective use of Internet search marketing, and she has expanded her inventory to more than 30,000 SKUs. This year she expects to do close to $10 million, two-thirds of it on the web.

"GiftCollector fits a nice, strong niche, with good breadth across assortments," says Jim Okamura, senior partner with consultants J.C. Williams Group. "They allow for different styles of shopping, to browse by category and by brand."

Yet Norment`s real strength is that she hasn`t stopped learning how to improve, both online and offline. She`s planning to launch a catalog soon to expand her customer base. And after seeing the strength of online sales of Christmas gifts, she`s adding a holiday store this year to her gift shop.

Now years after her shop provided the impetus for a web site, GiftCollector`s online branding is helping to build her offline shop`s image. "We`re getting more recognition in Virginia," Norment says.

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