By Neil Saunders
Although Tiffany is up against some fairly soft prior year numbers, it deserves credit for its performance over the first quarter. The group has pulled itself out of its funk, and the initiatives it has put into play are delivering solid results.
Data shows that Tiffany is gaining ground in both awareness and appeal to Millennial shoppers. This is a key factor helping performance.
Among the steps taken, the renewal of the offer is the most critical. Tiffany’s focus on producing more innovative and contemporary collections has paid dividends in both stimulating consumer interest and driving sales. Collections like Tiffany HardWear have been well received and have enabled a brand that was seen as old to reconnect with younger demographics.
The pace of product innovation is encouraging. New ranges like Paper Flowers show that the company is full of ideas and that it will continue to launch new collections throughout the year. The company is once again treating jewelry as an item of fashion and is putting itself at the forefront of trends and modern design. This is the breath of fresh air that will clear away Tiffany’s traditionally fusty image.
It is also encouraging that, while cohesive, new collections are accessible to many consumers. The luxury Paper Flowers range, for example, features items that span the price spectrum from $2,500 to $75,000. Meanwhile, the more everyday HardWear range spans $150 to $13,500. Certainly, products are not cheap, but neither should they be, as Tiffany is an unashamedly luxury brand that wants to create an aspirational feel.
While they would have been effective on their own, strong marketing has amplified the changes made to products. Campaigns like Believe in Dreams are wonderfully playful and go right to the heart of the issue: that Tiffany might be seen as old-fashioned, but it has something of relevance to the modern shopper. Featuring Elle Fanning in a Tiffany Blue colored hoodie sets the tone perfectly and helps connect the brand with younger consumers, with whom it has traditionally had little resonance.
Data shows that Tiffany is gaining ground in both awareness and appeal to Millennial shoppers. This is a key factor helping performance. This shift in attitude and message has not harmed the appeal or affection older customers have for the brand. Many are very engaged with the new styles and marketing. Tiffany finally realizes that most consumers of all ages no longer want Old World luxury; they want modern, fresh thinking that excites and inspires them.
Tiffany still needs to make progress in its stores. Although steps are being taken to address this, many still do not reflect the brand image of the new Tiffany. This change will take time to deliver, and we are now confident that Tiffany will address the issues.
The website which is easy, engaging, and interesting to shop — no doubt helping Tiffany’s e-commerce numbers.
Overall, Tiffany has done a great job turning around its brand. The company feels more energetic and younger than it has for a long time, and that can only be a good thing.
Neil Saunders is managing director of research firm GlobalData Retail.