Put A Ring On It – How To Save A Luxury Business In Peril, - Tiffany&Co.

“Pressure, challenges, they are all an opportunity for me to rise.”
Kobe Bryant

This week the iconic New York jeweler that makes more money from 4 simple words (will you marry me) than any other company on the planet - aired some of its dirty laundry.

As its $16 billion acquisition to LVMH Moët Hennessy Louis Vuitton lay in tatters, Tiffany&Co rolled up its sleeves and started swinging punches – beginning with a law suit alleging breach of merger obligations.

Now Tiffany’s future remains uncertain. Will the LVMH deal be completed but at a heavily discounted price (gasp)? Or will LVMH leave Tiffany’s at the altar – all alone to cope in a post-COVID world?

Let’s not shed a tear for Tiffany’s demise just yet. 

Founded in 1837 this iconic brand has survived and thrived through nearly 2 centuries of wars, depressions and economic slumps. She might be down but she’s certainly not out. 

Still there’s no time to waste. Assuming she’s going to be flying solo going forward, Tiffany’s Executive team need a transformational marketing strategy that needs to be implemented yesterday. 

One of the biggest issues is how to transform the experience of visiting a Tiffany’s store into a digital environment.

This is a huge challenge for all businesses with a heavy retail presence – especially those that rely on a tactile experience to move their products (think Apple Stores, Aston Martin Residences and Boat Shows). Tiffany’s is especially behind the 8-ball in this area. Currently their website sales account for less than one quarter of all sales. 

So what should Tiffany’s do? 

Overhaul their website so it looks more bedazzled? Crank up the volume of social media advertisements? Do a brand refresh? Pay more celebrities to flash, tweet and post about their Tiffany’s showpieces to their fans? Or option E – all of the above?

All these options would be the prevailing wisdom. But they are wrong.

While there’s nothing inherently bad with any of these strategies, you need to recognize them for what they truly are - a marketing bandaid. 

Bandaids can only stop so much bleeding. They might help deliver incremental improvements to the bottom line, but they will not achieve the business transformation that Tiffany’s so desperately needs.

Increasing your volume of digital marketing – whether by the quality of your website, or the number of ad campaigns you’re running isn’t necessarily going to increase your volume of customers. 

In Tiffany’s situation, those who are already comfortable buying online are already doing so. Those who are not buying online – are either looking for more of the “Tiffany’s experience”, or they’re sitting on the sidelines not buying at all.

So how do you provide more of the Tiffany’s experience in a digital environment  - and most importantly for you, how can you apply Tiffany’s learning to your business?

Let me explain by way of this simple diagram:

Most businesses start with selling some kind of products.  If you’re just selling products – in this case engagement rings - then all you have is a commodity.

Fortunately most businesses figure out it’s a terrible strategy to be in the commodity business, so they seek to differentiate themselves by adding some value-add by the way of service. 

Now we have product + service.  

95% of all businesses stop there. And still struggle.  It’s still highly competitive. Your revenue and profits are still highly vulnerable. So what’s the next level?

Community. Product + Service + Community. They create a community around their products and services, a sense of belonging, a sense of ownership. A sense of exclusivity. A sense of identity and prestige.

The good news is that creating a sense of community in a digital environment has never been easier to do. It’s easier than ever to connect with your customers. But the real secret lies in using personality infused marketing that creates a community they want to belong to.

Tiffany’s never made it here. It stopped at products + services. When people couldn’t physically show off their engagement rings to friends and colleagues, and have the experience of bragging in person – sales ground to a halt.

But the evolution doesn’t stop there. The holy grail for any business is the 4th level – building a Culture. This is an experience like no other. This is when your products are truly price proofed because there is no substitute. Think Apple fans camping outside stores days before the release of a new phone.  

The Client Stampede Marketing Formula

Creating an extraordinary experience for your customers – whether in person, or virtually, is the 7th and final step of the Client Stampede Formula. But to truly transform a business you can’t just leap to Step 7 if you haven’t done a good job of Steps 1-6. 

Tiffany&Co Execs have an exciting but perilous journey ahead of them. As with every business reinventing itself in a time of COVID, I sincerely hope they choose to transform their business, instead of applying bandaids. To paraphrase the late, great Kobe Bryant, “the harder things get, the better I get to become.”