Kristin Cho ‘15
I recently had a chance to chat with Vijay Talwar, class of ‘99 and former President of International, Blue Nile, the largest online retailer of diamonds, to discuss digital marketing and the future of diamonds. For those interested in continuing the conversation, the Kilts Center is hosting the Marketing Day Forum on May 7th.
ChiBus [CB]: While online channels allow you to reach a wider audience, brick and mortar stores still provide higher conversion rates, what is the best way to keep the balance between the two channels?
Vijay Talwar [VT]: There are many online retailers selling diamonds but only 10% of engagement ring purchases are made online with 90% of purchases limited to physical retail locations. Regardless of the size of online market, the physical offline stores and the ”experience” factor in sales cannot be neglected. So I believe the key is to leverage online tools to minimize the size of physical store footprint.
For example, it may sound premature but in future, I think there will be an “experience center” that showcases all products that are being sold online. The purpose of the experience center is not to make sales but to invite customers to touch and feel products so there will be minimizing onsite labor and encouraging customers to make purchases online. As a retailer, you always want to maximize sales/square foot and the well balanced strategy will help companies achieve that goal.
CB: What is the role of e-commerce in global expansion?
VT: I often think about global expansion in three phases. First phase was the international expansion via building manufacturing facilities outside of the US. The second phase was the globalization of services. The professional services companies like IBM and Accenture have been outsourcing a big portion of tasks and now have more than 100,000 employees in emerging market. The third phase of global expansion is the evolution of internet.
Before the internet, physical stores were necessary for global expansion. In order to achieve economies of scale, having one flagship was not enough but companies were required to open up multiple stores that were very costly. The internet allows anyone to enter the international market without physical presence. The e-commerce has helped lower the cost and entry barrier for new players in the market. So today, e-commerce is a quintessential piece in global expansion.
CB: What do you think about the Booth brand? What are we doing well? Where do you see the need for improvement?
VT: The Booth brand has improved significantly in the last 5 years. When graduating, I did not feel a strong connection between the school and the alumni community but in the last 5 years the school has been engaging more alumni by hosting events and opening up opportunities to connect alumni with current students. I think in order to build an even stronger Booth brand, it would be critical to listen to the four major stakeholders of the school - student, alumni, faculty and recruiter and cater to their needs.
CB: Any other advice for students at Chicago Booth?
To me, the most important variable in deciding my career was things I like to do during my free time. I liked (still do) shopping during my free time and realized that a career in retail is something I can enjoy and do well. I understand that many student will have student debt to worry about post-MBA but I want to tell students that money part will become less interesting as time goes by, and it is more about your interest and your passion. So follow your passion!