TELECOM Digest OnLine - Sorted: U.S. Luxury E-tailers Await Last Minute Shoppers

U.S. Luxury E-tailers Await Last Minute Shoppers

Alexandria Sage (
Thu, 22 Dec 2005 13:39:20 -0600

By Alexandria Sage

Online diamond and jewelry retailer Blue Nile Inc. knows a thing or
two about waiting until the last minute to buy those opulent holiday

Last year, a mere 14 minutes before the shipping deadline to guarantee
delivery by Christmas, a procrastinating shopper clicked to buy his
soon-to-be fiancee's engagement ring.

"We're here to save all those guys who are shopping at the last
minute," said Blue Nile spokesman John Baird, who expects men to
procrastinate just as much this year as they have in the past until
the final days before Christmas loom.

But industry analysts are mixed over how luxury online retailers are
faring this holiday season.

Providing a boost may be mall-averse men -- a National Retail
Federation survey found that 18 percent of them hadn't started their
holiday shopping as of last weekend -- together with consumers'
increasing comfort level with shelling out hundreds, if not thousands,
of dollars on Internet purchases.

Others note that high-end online gift buying is being supplanted by
visits -- even among the rich -- to online portals of discounters like
Wal-Mart Stores Inc.

Tracking firm comScore Networks found that luxury goods and jewelry
sites were the fastest-growing Internet shopping category last month
with 16.4 million visitors, a 39 percent jump over October. There is
no way to know what percentage were browsing and how many actually
ended up making purchases.

"We're seeing a very strong season again online," said comScore
Chairman Gian Fulgoni, citing 30 percent more high speed Internet
connections over last year and improved faith in Internet
security. "With the Internet, (consumers) are starting to buy in a
broader range of categories."

Through December 19, holiday sales in the jewelry and watch category
grew 13 percent over last year, he said, below the overall increase of
24 percent, while apparel, home and garden, and furniture have all
grown more than 30 percent over last year.

Analysts agree that consumers are gradually finding the idea of buying
a $123,000 Blue Nile diamond, a $1,400 cashmere wrap from or a $900 python purse all the more

"Consumers start out with books and as they become more comfortable
buying on the Internet, they climb the average selling price ladder,"
said Scott Devitt, analyst with Stifel Nicolaus. "Before you know it,
they're buying expensive jewelry on the Internet."


Heather Dougherty, analyst at Nielsen/NetRatings, said the online
luxury category is particularly strong at the holidays "because of the
way it reflects on the gift giver and recipient -- someone cared
enough to buy this upscale gift."

But some point out that the online winners this year are discounters,
who have wooed not only lower-income shoppers, but the affluent to

A survey by Internet measurement firm Hitwise found that unique visits
to 15 luxury online retailers for the week ending December 17 were
relatively flat over last year. Exceptions included Bergdorf Goodman,
owned by Neiman Marcus Group Inc., where online visits jumped 159

Hitwise analyst Bill Tancer said that consumers who earn over $100,000
make up a quarter and a fifth of traffic at and, respectively.

At, the demographics of shoppers are more upscale than
the average consumer in the stores, said comScore's Fulgoni,
attributing the difference to "less of a stigma" attached to shopping

Nevertheless, Blue Nile this holiday expanded their high-ticket
product line, offering 50 items above $10,000 compared with a mere
dozen last Christmas.

For the first three quarters of 2005, Blue Nile said, sales of items
priced above $20,000 increased 72 percent over last year. And the
biggest quarter is the fourth, since 40 percent of engagements occur
between Thanksgiving and Valentine's Day.

Blue Nile Chief Executive Mark Vadon said the company's goal this
holiday is to keep the right merchandise stocked and ready for
shipment in the last days before Christmas.

"What we're trying to do is keep shipping up to that last minute and
allow people in that final week to still be online and not go into the
store," Vadon said.

Copyright 2005 Reuters Limited.

NOTE: For more telecom/internet/networking/computer news from the
daily media, check out our feature 'Telecom Digest Extra' each day at . Hundreds of new
articles daily. And, discuss this and other topics in our forum at (or)

Post Followup Article Use your browser's quoting feature to quote article into reply
Go to Next message: Grant Gross: "Spam Wars Still Rage, Critics Say"
Go to Previous message: Gina Keating: "Disney Launches Web Personalization with Zizzle"
TELECOM Digest: Home Page