As the global jewelry industry reels from the explosive growth of e-commerce sales, a declining marriage rate and the changing taste for high-end baubles from cash-strapped millennials, Tiffany & Co. is holding its own.
The company’s stock price is up 30% over last year, buttressed in part by a strategic brick-and-mortar presence, with stores in upscale malls avoiding the mass market retail downturn.
The Tiffany & Co. brand continues to distinguish itself with its in-store touch-and-feel experience requisite for fine jewelry, along with a loyal customer-base and its iconic, trademarked robin’s egg blue boxes. The brand’s 125 U.S. stores, part of 300 total worldwide, generated around $2,600 per square foot last year with a 62 percent gross profit margin, resulting in lower operating costs and store profit. But it’s not resting on those laurels.
Its challenges as a company and brand are substantial as e-commerce and digital behemoths like Amazon encroach on its turf, meaning the need to connect with younger consumers—indeed, consumers of all ages—with meaning and impact is greater than ever.
“They have to have a plan to address the gigantic change taking place,” Howard Davidowitz, CEO of Davidowitz & Associates, told CBS News. “Now is the time to do it. There is no way to say people are not going to buy jewelry online.”
Incoming CEO Alessandro Bogliolo, a luxury retail veteran who will bring 16 years of experience at Bulgari SpA, has inspired confidence by investors that he will invigorate the brand. They’re already excited by recent moves including the 2017 fall campaign, which just released a series of video spots.
An edgier Tiffany & Co. is evident in the campaign, titled “There’s Only One.” Digital and print ads (lensed by Inez & Vinoodh) celebrate individuality and self-expression through six talented iconoclasts (and, importantly, diverse) brand ambassadors: actresses Zoë Kravitz and Elle Fanning; David Hallberg, principal dancer for the Bolshoi Ballet and America Ballet Theater; singers Annie Clark (aka St. Vincent) and Janelle Monáe; and “supermodel and activist” Cameron Russell.
— Tiffany & Co. (@TiffanyAndCo) September 5, 2017
In another bid to refesh its brand, Tiffany has launched a fragrance—its first in 30 years—in collaboration with Coty Inc., as “a modern homage to 180 years of Tiffany history, from the design of the bottle to its signature ingredient.” In the campaign, shot by Steven Meisel, “everything is stripped away, focusing on the essence of the brand and its essentials: Tiffany Blue, diamonds, skin and scent.”
— Tiffany & Co. (@TiffanyAndCo) August 3, 2017
“Beauty and love, which lift us and fill our lives with optimism, strength and joy, are the essence of Tiffany,” stated Caroline Naggiar, chief brand officer. “Our new fragrance inspires this powerful state of mind, much like wearing an exquisite piece of Tiffany jewelry.”
— Tiffany & Co. (@TiffanyAndCo) August 30, 2017
On the social impact front, increasingly important to consumers of all ages, Tiffany partnered with model Doutzen Kroes on its Save the Wild collection (including a Jean Schlumberger-designed elephant brooch) for its first cause marketing campaign, benefiting the Elephant Crisis Fund. Tiffany has committed at least $1 million of the jewelry’s sales to the not-for-profit organization.
Its sustainability commitment—vital to spell out as consumers demand authenticity, accountability and environmental responsibility—was highlighted in a new video.
“Socially conscious consumers are demanding higher levels of sustainability and activism from companies today,” stated Anisa Costa, chief sustainability officer and president of the Tiffany & Co. Foundation. “Your advocacy matters. We all have a role to play in protecting our planet and its irreplaceable creatures. No action is too small.”
Stop and stare. Our new store windows are ready for your visit. pic.twitter.com/zV5dwimqkV
— Tiffany & Co. (@TiffanyAndCo) September 4, 2017
As Tiffany & Co. aims to make a bigger impact with younger consumers (including its edgier window displays), Citigroup outlines its brand challenge—attracting millennials without alienating older customers—as “Lady Gaga versus Audrey Hepburn.” The reference—in a Super Bowl 2017 campaign, Gaga promoted Tiffany’s Hardwear collection while Hepburn, of course, made the brand a global icon in the classic 1961 film Breakfast at Tiffany’s.
“The world will become a barbell,” Milton Pedraza, CEO of the Luxury Institute, told CBS. “At the one end it will be Amazon, commoditized products—and then there will be real luxury. There are a lot of ‘luxury’ pretenders. Tiffany is no pretender… they will continue to survive and thrive.”