We need to talk about Tiffany (& Co.)
I, along with everyone else, watched Lady Gaga SLAY the Super Bowl, but I was even more shocked to see what came next ... a Tiffany & Co. Super Bowl ad ... featuring Lady Gaga as their newest brand representative?!!? The timing makes sense, considering she'd just done the halftime show, but really a Tiffany Super Bowl ad?
For those who aren't aware, there have been HUGE changes within Tiffany & Co. in the last few months. In January, it was announced design director Francesca Amfitheatrof will be leaving the company (after only 3 years) and Reed Krakoff, former Coach mastermind, will start February 1st as chief artistic officer, overseeing not only jewelry and accessories, but also marketing, images and store design. THEN just hours before the Super Bowl, it was announced that CEO Frederic Cameral, was leaving the company. Talk about HUGE changes!
So why all the diamond drama? Sales and traffic at Tiffany & Co. stores have been down for years. The luxury market is in a general state of decline, millennials are spending less on jewelry than generations before, and the NYC flagship, located next to Trump Tower, has seen a 14% sales drop due to declining traffic. That store alone accounts for 10% of the entire brands sales. But Tiffany & Co. can't just blame Trump.
Many of these giant legacy brands have an innovation problem. Instead of brands like Gap which should use their history and DNA to refocus the brand, Tiffany & Co. is weighed down by its heritage. The brand is over 180 years old, and hasn't released a new collection of jewelry in 2 years. Also prices are higher than ever before. It's last blockbuster collection was the 'Return to Tiffany' collection in the 1990s, which was moderately-priced, and a massive successes. According to Racked, the retailer later raised prices on the collection 400%, and sales virtually stopped.
On the marketing side, the campaigns of the last few years/seasons are nothing noteworthy. In my view, Tiffany relies on its name recognition and heritage to sell its jewelry, and that will only get you so far. Millennials have proven not to be brand loyal, and spend their money on experiences. And furthermore, when millennials are in the market to buy fine jewelry, they'll go to a cooler, hipper, edgier brand, like Cartier to spend their money. (see Cartier Love bracelets).
The HardWare collection is a fresh take, but it's not enough. I'm also not convinced that Lady Gaga is going to broaden Tiffany to new audiences. Or at least the ones they're after. Before promoting Tiffany & Co., Lady Gaga was promoting Bud Light on her Dive Bar Tour ...
Tiffany needs to move beyond Breakfast at Tiffany's if it wants to breakout. Francesca Amfitheatrof designed some incredible pieces for the brand. Her Tiffany T collection was great (above), and there's actually some pieces that might appeal to men (new audiences!) but look at the prices. And if I wanted something in that style, why wouldn't I support a newer/cooler and lower-priced brand like Miansai (below)?
So what's the solution? I believe it's both a product and marketing issue. First, there needs to be a better-priced assortment of items. Someone shouldn't have to pay upwards to $500 to buy ANYTHING. Perhaps Reed Krakoff will be a great choice. He did turn Coach to the massive global brand it is today. Tiffany should still create the amazing one of a kinda pieces featured in their Blue Books and Tiffany Masterpieces collections, and of course, still specialize in engagement rings. But what else do they have to offer? What's NEW for today's woman that isn't waiting for a man to buy her jewelry, or not waiting for him to ask, Will you? What would she buy for herself? And what would he buy himself?
Tiffany needs to define what's next in American jewelry design. Something less precious, less delicate. Something with edge and New York City grit perhaps? Tiffany can be bold and strong! Look at Alexis Bitter for example, amazing stuff! What would a higher-end more luxurious take on that be?
Whatever happens, Tiffany & Co. isn't going anywhere. As someone with close knowledge of the brand (I used to work there!) I want to see them succeed. And who is better positioned within the market than T&Co.? They just need to step outside of their blue box.