Tiffany & Co. is an American based jewellery shop established in in 1837 by Charles Lewis Tiffany and John B. Young. Starting as stationery and fancy goods shops, the focus changes when Tiffany took charge and emphasize the company industry to jewellery, setting the benchmark for quality of their materials and craftsmanship. Ever since then the brand name keep soaring, winning awards and participating in international exhibitions, showcasing the quality of the craftsmanship and materials. They also establish trademark with its legendary Tiffany blue box, something nobody can pay for unless they purchase their products. By 2016, they have set up 307 stores spread worldwide with stocks sold on public (Tiffany & Co., 2016).
After multiple series of success, will Tiffany & Co. also succeed in reaching out to 75 million strong, market-dominating millennials? (Fry, 2016). How successful is Tiffany in integrating technology and internet in their business to reach out the domain of future market?
1.1. CURRENT PERFORMANCE
Tiffany used both online and offline platform for its sales. Unlike any other luxury brand, Tiffany & Co. has been familiar with mail order system since 1845. They published the now famous Tiffany’s Blue Book, the annual catalogue for their finest collection. In modern days, they locate their flagship stores in the high street of big cities all over the world to maximize the shopping experience and match their positioning. They also offered online shopping features in their website, and publish their annual Blue Book within the platform. They have four sales strategy which are retail sales, internet and catalogue sales, business to business, and wholesale distribution. (Tiffany & Co., 2016)
Tiffany & Co. owns 127 stores in Americas which contribute to 47% of worldwide sales. The US represents 88% of the Americas sales in 2015. Sales from 81 stores and internet sales in Asia-Pacific represented 24% of the worldwide net sales, more than half accounted to Greater China. Japan is the major Asia country where Tiffany & Co. investing in, which accounts for 13% of the sales with 56 company operated chain stores both standalones and within department stores. Europe represents 12% of worldwide sales, dominated by United Kingdom with 40% of the part. In total there are 41 stores with internet sales contributing to the numbers. The other source of sales holds for 3% of the revenue is the Emerging Market region which encompasses United Arab Emirates (75%), wholesale diamond sales, and licensing agreements (Tiffany & Co., 2016).
By December 2015 the company’s stock had a market capitalization of $9.8 billion and priced at $76.11 ( (Key, 2015), therefore listed in S&P 500 Index. The addition of Tiffany & Co. in the index further enhance its position as America’s large company. Tiffany & Co. stock price had positive impact following the election of Donald Trump as the President of United States as the sentiment for US strengthening economy breakout (van Doorn, 2017).
As for its growth, although showing modest decrease in 2015 sales compared to the previous year, the company does not stop expanding its outreach by opening 12 new stores and expanding the product types such as new jewellery collection and new watch collections (Tiffany & Co., 2016)
1.2. NEW PRODUCTS
The main and principal product sold by Tiffany & Co. is jewellery, which contributes 93% of the sales in 2015. Aside from jewellery, it also offers timepieces, leather goods, sterling silver foods, china, crystal, stationery, fragrances, and accessories. The designs are developed by wide range of stakeholder which are employees, suppliers, independent designers, and also widely known designers (Tiffany & Co., 2016).
Clustered by product category, their sales are divided into three sections which are; Statement, fine & solitaire jewellery (22%), Engagement jewellery & wedding bands (29%), and Fashion jewellery (42%) in 2015 (Tiffany & Co., 2016). In general, 93% of Tiffany & Co. sales arrived from jewellery, while others such as timepiece, fragrance, leather accessories, eyewear, and other aggregating the other 7% (Tiffany & Co., 2016).
Tiffany & Co.’s does not launch any new product category for years, and instead actively updating their collections for jewellery and timepiece categories and occasionally new type of metals and diamond cuts.
1.3. NEW MARKETS
Current target market for Tiffany & Co. are The Americas, Europe, Asia-Pacific, and several countries grouped as emerging market, and Japan. Due to rapid growth and its track record as top market in luxury products, Tiffany seems to focus on Japan as single country. Countries that are included in emerging group are United Arab Emirates (Abu Dhabi and Dubai) and Russia. Since 2014 Tiffany&Co. expands their reach by building more flagship and branch stores within The Americas, Europe, and Asia Pacific region (Key, 2015).
Demographic market of Tiffany & Co. products are mainly women seeing from their product type and categories. The purpose and branding of Tiffany&Co. is also associated with celebration of life milestone such as engagement, wedding, and birthday, hence its compatibility with different age groups and status (Tiffany & Co., 2016). With its high price bar, initially they target higher income groups, but in recent years they added products made from sterling silver, making it more affordable to attract middle class buyers. Their different approaches in design and branding also allow the products to be timeless, suitable for older generations who appreciate its longstanding value and reputation to the productive working middle-age who shops for personal satisfaction, and millennials who are motivated by trends and role models.
1.4. SOCIAL MEDIA PRESENCE
Tiffany & Co. has been active and engaged on multiple social media platforms such as YouTube, Instagram, Facebook, Twitter, Pinterest, Tumblr, Google+, Weibo to reach China's massive market, and even Snapchat to follow the millennial trend. Tiffany & Co. has more than 9 million likes on their Facebook page, 6.2 million followers on Instagram, 1.5 million on Twitter, and 35,000 subscribers on YouTube. The social media contents are mix of product storytelling, occasional celebratory posts, tagged pictures of public figure wearing their products, and campaigns compiled creatively into pictures and videos posted daily (Koh, 2016).
Tiffany & Co. is responsive in social media, responding to comments regarding products, complaints, and questions with short, informative answers. Their responsiveness, consistency in social media content marketing, and high engagement rate put them in high rank of luxury brands on social media albeit the industry lateness in adopting the new marketing platform.
2. Tiffany & Co. CURRENT BRAND STRATEGY AND PERFORMANCE
2.1. Luxury marketing mindset in technology and e-tailing
Prioritizing quality, luxury brands should be very particular and in total control of value chain. Luxury brands also create distance to the audience and market in general with their high price point (Kapferer & Bastien, 2009). Past articles predicted that internet in luxury industry would hit a dead end caused by the absence of atmosphere and hospitality provided by physical retail store, and trust in the website and authenticity of the products being purchased through a medium (Wiedmann & Hennigs, 2012), some also stated that luxury industry players are reluctant to use the platform because it will reduce the sense of exclusivity (Wiedmann & Hennigs, 2012).
Tiffany & Co. follows the luxury marketing mindset despite of the opinions regarding internet on luxury brands (Okonkwo, 2010). They are dominating the clients, affluent 25-40 years old and the millennials, even on the digital platform. Incorporating an e-business into the luxury brand’s strategy as this medium is likely to be more effective for the younger mobile generation (Okonkwo, 2010). They insinuate the store interior to the website with simple, representative Tiffany Blue and white/silver colour with classy and minimalistic design, creating expensive feeling. The website is decorated with periodically updated professional editorial video and photos. As luxury brand has become the playgrounds especially for brand who can tell stories and visualize their authentic dreams (Kapferer & Bastien, 2009), Tiffany & Co. can excel on this particular platform seeing their national approach.
Using the American national approach, Tiffany & Co. sticks with their imposed stories and heritage upon their content marketing, as opposed to the regular marketing law, Tiffany & Co. uses luxury marketing mindset which is advertise not to sell, but to inspire (Kapferer & Bastien, 2009). This storytelling strategy also acts in accordance to the theory of communication style of luxury brands which are subtler in products function (Hansen & Wänke, 2011). Although they are facilitating the audience with online shopping, they offer more service in assisting the buyer in choosing their Tiffany’s products. They have The Tiffany Concierge section on their website (Tiffany & Co., 2017) which assist the buyer from how to choose their engagement ring type, making appointment, proposal tips, and the call service line. That section substitute sales assistance in physical store, giving a little bit of personalized and luxury touch in the buying process while widening their reach.
Tiffany & Co.’s complementary feature also could be found in their ‘Engagement Ring Finder’ apps where people can choose which type of ring they want and virtually ‘use’ it on their hand. The users can also send the picture through different social media and messenger platform, complementing the perception of Tiffany’s products as gift, and provides a slot to book their in-store consultation and appointment, guiding the audience to experience the store service. (Glover, 2010). This application reportedly increases 20% of Tiffany & Co.’s sales in 2015 (Sommerfeld, 2016)
According to a KPMG study in 2009, luxury ‘newcomers’ are particularly open for online shopping (Wiedmann & Hennigs, 2012). Luxury brands, therefore, have the possibility to extend their customer range because the psychological threshold to purchase luxury in the internet is also much lower, so it is a brave step for Tiffany & Co. in anticipating the change in market demography (Wiedmann & Hennigs, 2012). They maintain the issue of quality and exclusivity as they single-handedly sell the products, and partnership with the reputable Net-a-Porter and Selfridge (Tiffany & Co., 2016). Tiffany&Co. Also raise the issue of counterfeits to protect their brand, despite of their failed attempts, they are still vocal in spread awareness to the customers (Buckley, 2010). The issue of exclusivity also being addressed with their No-Discount policy, opposing the stigma for cheaper online shopping experience and not giving up to the market demands.
2.2. Communication style of luxury brands towards Millennials
Millennials are the most brand-sensitive and socially aware generation due to the need for forming self and social-identity. They are willing to share their brand preferences over social media or online (Kim & Jang, 2014). The millennials are digitally-empowered generation whose second nature is the practical use of mobile technology and social media. In order to reach this generation, brands are facing the challenge of continuous innovation providing Omni-channel connectivity with this consumer group (Fromm & Garton, 2013). Tiffany & Co had successfully actualize and managed the theories.
For the first time in 2016 Tiffany & Co. defied the anti-marketing law of not using stars in their advertisement by choosing Academy Awards winner Lupita Nyong’o, millennial actress Elle Fanning, also models Natalie Westling and Christy Turlington under the command of former Vogue creative director Grace Coddington in an effort to appeal to younger demographic (McCall, 2016).
In their communication, luxury brands offer symbolic and hedonic benefit, which are gratifying, indulgent and sensory (Hirschman & Holbrook, 1982). They sell dreamlike, hedonic, exclusive, conspicuous, and non-comparable benefits (Kapferer & Bastien, 2009). Subtle yet engaging approach in the contents are preferred for the brand, and it is exactly what Tiffany & Co is doing. The celebrities are in line with the image Tiffany & Co. wants to maintain, shown in the elegant black and white videos and editorial pictures posted on their social media accounts under ‘Legendary Style’ campaign.
More engaging communication are shown in emotionally-touching campaigns such as their 2015 ‘Will You?’, campaign involving same-sex couple, #KnotonMyPlanet campaigns for wild elephant conservation by purchasing their Knot collection ( (McGuire, 2016), and a fresh, punchy campaigns of #LoveNotLike featuring models from different racial background to promote peace ( (McGuire, 2016). Tiffany & Co. also utilizes features such as Facebook apps for their 2013 Blue Book launch giving their Facebook fan preview of the star-studded launch (Moth, 2013), and Snapchat’s geo-filter for their #LoveNotLike campaigns (McGuire, 2016). They are strategically incorporating the use of hashtag in several campaigns. They are not selling, they are inspiring and engaging.
3. CONCLUSION AND PROPOSED MARKETING COMMUNICATION STRATEGIES
3.1. Conclusion
In reaching out to the millennials Tiffany & Co actually progressing into innovations in e-tailing and yet still follows several luxury marketing mindset of anti-law marketing. They are dominating the clients by being present omni-channel, separating clients and non-clients through campaigns for products user, while communicating to those they are not targeting meant to increase desirability with their general engaging campaigns. Their campaigns also do not intend to sell, and instead inspire audience. They sell the products marginally on their online shop on the website, but guide the visitors to book appointment and be present in the physical store, even their Engagement Ring Finder app does not offer online shopping.
In reaching out to the millennials Tiffany & Co actually progressing into innovations in e-tailing and yet still follows several luxury marketing mindset of anti-law marketing. They are dominating the clients by being present omni-channel, separating clients and non-clients through campaigns for products user, while communicating to those they are not targeting meant to increase desirability with their general engaging campaigns. Their campaigns also do not intend to sell, and instead inspire audience. They sell the products marginally on their online shop on the website, but guide the visitors to book appointment and be present in the physical store, even their Engagement Ring Finder app does not offer online shopping.
3.2. Content recommendation
As for the content, from the research it is shown that millennials tend to push committed romantic relationship and marriage until later stage of their life (Goldman Sachs, 2016), which might make Tiffany & Co.’s proposed image to be less relevant and appealing. Tiffany & Co. can propose values of personal independence and self-love to appeal the self-affluent and independent audience type, expanding the possibility of purchasing situation.
Brands are shrinking, while social media presence is being the consideration for purchasing. (Goldman Sachs, 2016). 34% of the millennials would prefer brands which are active in social media. Tiffany & Co. address the challenge already but it has room for improvement. Tiffany & Co. Follows communication style of luxury brands which are subtle and beautifully narrated, not hard-selling. To be more relatable and in favour of the socially-aware generation, Tiffany & Co. stray from the mindset of not using public figures and endorsing suitable celebrities and models instead, using multiple social media channels for broader outreach but still holding on to their heritage and stories, practicing American national approach in luxury marketing. They can expand more options for endorsed public figure and create a more relatable image for the millennials while keeping the heritage to appear friendlier for newcomer affluent market as it may increase brand market share up to 2.4 points among fan. Widening the theme for campaigns can work as the millennials are open towards more values and issues such as sustainability and equality and preferring companies who care about those issues as well (Cohen, 2014), which Tiffany & Co. addressed by participating in relatable CSR and responsible mining (Tiffany & Co., 2016), as well as using LGBT as one of the feature in their advertising. Unconventional theme may invite more audience and buyers, also create buzz which elevate Tiffany & Co. social media presence.
By going digital, the company acquire data on customers’ behaviour and allow them to optimize the findings. Tiffany & Co. can utilize the data to tailor customized service and offers based on their browsing and purchase history, something that used to be done in physical store. Consumers demand for luxury products might be sophisticated and technology integration can help create seamless and convenient purchasing process for the website audience. Tiffany & Co. can also design a smooth and continuous path from stories and inspiration to purchase by merging content and commerce, not dividing the two aspects like nowadays. Evoke the sense of belonging and similarity between the brand and customers value through personalized journey on Tiffany & Co. apps and website by offering them special products and campaigns with value same as their interest on browsing history, for example show the Knot collection for environment conservators.
Digital also means social web where people with same interest join together. Because luxury brands create passion, they can create fans before they create buyers. Create a user generated content such as exhibition of pictures made from Tiffany & Co. owners’ pictures showing their romantic moments with Tiffany’s rings. Doing user generated content campaigns also help differentiate the clients and mere audience, hence emphasizing the privilege of being Tiffany & Co. users and heightens desirability.
3.3. Platforms and products
Tiffany & Co uses 5 out 7 main functions of social media in luxury brands which are storytelling platform to reinforce the brand concept through their contents, interaction and engagement with loyal customers (and audience), CRM membership service, personalized and exclusive service offer, and online shopping facility. Tiffany & Co. can expand the social media functions to offer real time experience and interactive programs for their products launching and their participation in exhibition/fashions show, inspired by Burberry. By targeting the technologically adapt millennials, having research on the latest technology and utilizing them in the shopping experience might put Tiffany & Co. in their favour (Ghosh, 2016). Technology can also be used for better interactive storytelling canvas with sensory marketing. Giving the classic New York feel, scent, and design on store and website experience to enhance the image of timelessness and heritage.
There is also a shift in trends which gravitates towards experiential luxury products (Solomon, 2014). To address the trend shift, embedding the products with technology can work for Tiffany & Co. just like what Tory Burch and Fitbit (Roberts, 2016) or Bvlgari and their Safety Vault apps (Bulgari, 2016) did. The product should be relatable to the value, as they are passionate about the values, including the company’s (Solomon, 2014).