Tuesday , 6 December 2016
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Blue Nile, Rent the Runway Bet on Shoppers Wanting Stores

In the end, there are some things online shoppers want to touch and see in person. Blue Nile, a 17-year-old online jewelry company, is opening more showrooms after a trial run proved successful. Rent the Runway, a website that offers clothes for rental, is launching a showroom this week at Neiman Marcus, with plans for more, as well as standalone locations.

Why would online retailers take on the expense of overhead and store staff? And why would a department store risk seeing sales siphoned by rentals? In some cases, it’s to attract a different kind of customer. And one executive says the showrooms, which are also being embraced by online companies like Warby Parker and Bonobos, typically cost less to operate than acquiring new customers by other means.

Seattle-based Blue Nile, known for its varieties of loose diamonds and choice of settings, first experimented with small kiosks inside two Nordstrom stores. It closed those but opened its first standalone “webroom” at the Roosevelt Field mall in Long Island last year, and has since expanded to malls in well-to-do suburbs of New York and Washington, D.C. It opened in September in Portland, Oregon, and next week, it will open in Bellevue, Washington. It plans to eventually have dozens.

The showrooms are appealing to Blue Nile’s core customers, but offer more than the online site, said CEO Harvey S. Kanter. “Our webrooms are fresh, modern and bright. It is an experience.”

At about 300 square feet of selling space, the showrooms are much smaller than traditional jewelry stores. While the diamonds themselves are still only online, shoppers can see and touch the ring settings and other jewelry, and choose a ring that can be shipped to their homes as fast as overnight. Kanter said the rent and staff costs of the showroom are less than running…

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