Tiffany’s Strategy, 3 Things to Consider
People have been closely watching Tiffany & Co. since it was acquired by luxury conglomerate LVMH in October of 2020. LVMH bought the storied jewellery retailer for $15.8 billion in the largest deal ever in the luxury sector. Since then Tiffany doesn’t feel quite like your mother’s Tiffany. With collaborations with the likes of Beyoncé and Jay Z Tiffany isn’t hiding behind its heritage and instead is grabbing attention in ways it hasn’t before.
Source: Bloomberg
The acquisition has been a good one for LVMH. “Building on the record results of 2021, Tiffany experienced an excellent first half,” wrote LVMH in its 2022 first half financial report. If you are curious about what Tiffany is doing to succeed then consider these three elements of its strategy.
1. Elevated Partnerships. Following the purchase of Tiffany its new management team focused on making Tiffany relevant again through a number of high-profile partnerships. The most well-known one was a collaboration with Beyoncé and Jay Z Carter. In August of 2021 for the first time the powerhouse couple appeared in the same ad together for Tiffany. In the first part of the campaign called “About Love” Beyonce wore a 128.54-carat Tiffany Diamond necklace that is reported to be valued at more than $30 million. The ad also featured a rare Jean-Michel Basquiat painting.
After Beyoncé wore the necklace she became one of only four women who have worn the Tiffany Diamond since it was acquired in 1877. Prior to Beyonce wearing the necklace the only people that have worn it are Lady Gaga, Audrey Hepburn and Mary Whitehouse. “We at Tiffany stand for many things, love being at the forefront…. And they embody modern love, in my opinion,” said Alexandre Arnault EVP, product and communications at Tiffany. “If you think about iconic power couples in the world, they are number one, at least in my mind. It’s a really proud moment for everyone at Tiffany.” “The investment will be pretty impressive,” said Arnault. “It’s our biggest campaign for the year. It’s the most enduring campaign. Also, it’s the only year-long campaign that we have. It marks a clear evolution of what we’ve been doing from a creative standpoint.” Tiffany’s ad campaign featuring the Carters is the most successful ad campaign in Tiffany’s history.
In another ad for Tiffany featuring Beyoncé which came out in October called “Lose Yourself in Love” Beyoncé sings and dances to her song Summer Renaissance from her Renaissance album which was released last July. While many fans were waiting in anticipation for Beyoncé to release music videos for her Renaissance album they instead had to satisfy their desire with her ad for Tiffany which was the only music video released related to the album. The ad was a hit garnering over 4.6 billion impressions and 690 million views of the video.
Since Tiffany was purchased by LVMH it has also collaborated with Supreme and Pharrell. Tiffany has “intensified the focus on product newness and communications to drive desirability and visibility,” said Citi luxury goods analyst Thomas Chauvet. “They were trustworthy but incredibly dull and cold,” says Erwan Rambourg, global head of consumer and retail research at HSBC. But these new partnerships are helping the brand to break new ground.
2. Revamped store network. Part of the efforts to revitalize the Tiffany brand include improving the store experience by renovating and opening new stores. “After communications and products, we expect the brand to roll out a massive plan of store revamping, that includes assessing locations and introducing new formats,” says Mario Ortelli, managing director of Ortelli & Co.
Tiffany is already in the process of renovating its flagship store in New York City which is scheduled to open during the first half of this year. Tiffany also plans to renovate 30 -50 more stores. Updated Tiffany stores are supposed to have more of a feminine touch and will be more warm and inviting.
3. A younger and more diverse consumer. It’s not as easy as you think it is to keep your brand youthful when it was established nearly 200 years ago when Tiffany came onto the scene in 1837. Brands face this challenge all the time. How do you keep your older customers who generate good business while appealing to younger customers that can growth with you. When Tiffany changed ownership its new management team wasted no time in confronting this challenge head on. In July of 2021 Tiffany launched its “Not Your Mother’s Tiffany campaign” which boldly featured those words on social media as well as outdoor signage.
“‘Not Your Mother’s Tiffany’ has been met with quite a bit of adversity, which we anticipated, but we’ve seen great growth from the product categories in it,” said Arnault. “And we obviously welcome the dialogue, whether it’s positive or negative. We were spoken about by people who had never spoken about Tiffany before, which was great.” Tiffany’s efforts to update its image have not gone unnoticed. 62% of new customers to the brand are under the age of 40 and on average spend $2,000 with the brand which is an improvement over 2019. Partnerships with the Carters, Supreme and Pharrell have also helped the brand to appeal to a younger and more diverse audience.
“When it comes to reigniting brands that have lost their lustre with customers, LVMH has longstanding credentials,” said Rebecca Robins, Interbrand global chief learning and culture officer. “With Alexandre Arnault having reignited Rimowa as a brand ‘created by Millennials for Millennials, the signs of things to come are here for Tiffany.”
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