We have identified two main target segments of Tiffany and Co. The gift-givers and gift-receivers are mainly targeted when special occasions occur (e.g. when there is a need to purchase gifts/when it is Christmas/when it is somebody’s birthday); while affluent self-buyers aged 20 to 35 are those who generally pamper themselves with mid-range luxury goods.
After determining our target segments, we move on to selecting the two main competitors of Tiffany and Co. in the Singapore landscape. We have identified them as: 1) Blue Nile, and 2) Pandora – on a basis of similar price range, product range, and the target market in which they all compete for in terms of attention, time, and money.
- About Blue Nile
Blue Nile is the largest online retailer of diamonds in the United States, offering more than 60,000 diamonds on its website. It is currently an international online jewellery retailer and has a dedicated site for the Singapore market. Using the B2C model with no physical stores, no intermediaries and offering products four times cheaper than rivals, Blue Nile has proven to be a highly successful in its business model, with Forbes naming Blue Nile its favourite online jeweller.
Everything started in 1999, when Mark Vadon, a consultant at Bain and Co. went to a Tiffany and Co. store in San Francisco, looking for an engagement ring for his future fiancée. He was a casual man wearing casual cloth. Vadon said that Tiffany and Co. salesperson ignored him and did not help him finding a ring because he did not look like a potential and interesting customer.
After this unpleasant experience, Vadon decided to buy a ring online at InternetDiamonds.com. Being impressed by his online experience and very interested by this uncommon business model (selling diamonds online) Vadon bought the company in 1999 and renamed it Blue Nile. Vadon realized at this time the potential of creating an online diamond jewelry store. Over the years, Blue Nile became a successful pure-play online retailer by primarily selling diamonds engagement rings.
- Unique Selling Proposition
The company targets men and frequently advertises their brand through television channels like ESPN or TNT. The advertisements and the website itself provides an array of pictures and useful information to help men easily find what they want. An interesting aspect of Blue Nile is that it offers personalised services even without a physical store. On the website, several features such as toll-free call assistance, emailing, and live-chatting is made available to the customer. This not only provides customers with the privacy and convenience of shopping online, it helps cut down on several risks such as time risks (traveling to the physical store), money risks (cost savings), and even psychological risks (feeling pressured when entering a high-end luxury store). In addition, Blue Nile provides Blue financing and insurance options. For example, there is a “Bill me later” option where customers can choose to pay 6 months later, with no interests charged.
- About Pandora
Pandora Jewelry is a fast growing and unique jewellery company which offers consumers the opportunity to design their own distinctive fashion creations. Originally from Copenhagen, Denmark, Pandora Jewelry has quickly spread across the globe to become one of the most well-known and popular contemporary jewellery designs. Inspired by Greek mythology Pandora uses hope and inspiration as the basis for their characteristic style.
- Unique Selling Proposition
PANDORA’s mission – then and today – is to offer women across the world a universe of high quality, hand-finished, modern and genuine jewellery products at affordable prices, thereby inspiring women to express their individuality. All women have their individual stories to tell – a personal collection of special moments that makes them who they are. That is why they celebrate these moments. That is why they say these moments are unforgettable.
We move on to presenting a SWOT analysis in comparing the 3 firms:
SWOT Analysis – Tiffany and Co.
Strong Local Presence and Positive Brand Image
Tiffany & Co. has larger retail stores than Pandora and the stores re located in high human traffic locations. First opened in 1991 in Singapore, it has the longest history standing as compared to Blue Nile and Pandora. Over the years, the company has created a strong local presence, as many Singaporeans are well aware of the brand. It’s exclusive and elegant brand image consistent of that as reflected internationally.
Well-Known Sterling Silver Jewelry
In Singapore, the sterling silver jewelry is highly popularized and donned by many women. It is also one of the top products that people purchase as gifts for others.
Limited product and design range
While the counterparts in US enjoys a large range of products and designs, it is not reflected similarly in Singapore. The US stores enjoy a larger range of designs and limited edition jewelry. While sterling silver jewelry range is strong in Singapore, the company should not over rely on it, but should spend its efforts to promote other line of jewelry to maintain consumer interests.
Singapore – A Luxury Retail Hub
According to TTG Asia, Singapore is now the top global destination for Chinese tourists to shop for luxury watches and jewellery. Therefore, besides targeting Singaporeans customers, the company can expect tourists of Singapore to play a significant market segment for luxury goods as Singapore transforms into a luxury retail hub.
Proliferation of Imitation Goods
Recently, Tiffany & Co lost its appeal against Ebay, in its bid to prevent trademark infringement for selling counterfeit goods on its website. As Ebay cannot be held liable for fraudulent vendors; the company will find difficulty in penalizing individual vendors as they come in vast numbers.
Based on a publication by Singapore Business Review on 12 April 2012, almost 34% of Singaporeans respondents are willing to cut back luxury spending on watches and jewelry, as affected by the global economic slowdown. The slowdown may translate lower profits for the company.
SWOT Analysis – Blue Nile
Blue Nile’s strategy in being an online store allows it to reduce its operating expenses considerably. It also has its own warehouse in Seattle for seamless logistics. By avoiding costs associated with owning a brick-and-mortar store, Blue Nile can translate these costs savings into price reductions for its customers, leading it to charge highly competitive prices.
First Company to offer Customization of Rings
Blue Nile was one of the first companies to offer a service that allows customers to customize engagement rings. With the concept, “Build Your Own Ring”, customers can choose the shape, clarity, size, and color of their diamond.
Blue Nile is an renowned expert in diamonds. It sells a wide assortment of different diamonds and also provides information on its website about the 4 C’s: cut, color, clarity, and carat. This gives customers the information needed when purchasing a diamond, allowing them to view Blue Nile as a one-stop information portal – giving them the confidence and convenience to purchase from the website directly.
Lack of the Physical Store Experience
Customers shopping online are not able to see and touch the diamonds they purchase, which may be one of the key factors why a customer may choose another brand over Blue Nile. Thus, Blue Nile tries to overcome this by offering a 30-day money-back guarantee for their products.
Relatively Low Visibility of Brand in Singapore
Blue Nile is definitely a major company in the United States but it is still seemingly unfamiliar to the local market, except for technology-savvy individuals who know about their website, or loyal fans of fine jewellery. This gives a considerable advantage to competitors such as Tiffany & Co, which already has a strong brand recognition here in Singapore.
Blue Nile could tap on the growing European market since a war ehouse in the United Kingdom has been recently established.
High Level of Competition
Competition is the biggest threat to Blue Nile. Local physical stores selling fine jewellery are direct competitors to the company. Competing international companies include Tiffany & Co, Cartier, De Beers, and Bvlgari; while competing local companies include Lee Hwa Jewellers and Larry Jewellery.
SWOT Analysis – Pandora
Distinct Unique Selling Point
Pandora is a leading brand and significant player in the charms and bracelet category. It evokes the consideration set of consumers easily when it comes to customizable accessories.
Positive Brand Image
Possess an image of good quality and refined products. The Company actively involved in charitable works to empower the woman in Africa.
Weak breadth and depth for brand awareness in Singapore
While fashionistas in the U.K. and U.S. list Pandora accessories as a must-have, Tiffany & Co effortlessly edges out Pandora here in Singapore. In terms of brand recall and recognition, consumers are generally more likely to mention Tiffany & Co as compared to Pandora when it comes to jewelry.
Widen product focus
As of now, approximately 90% of Pandora’s revenue is generated from the charms and bracelet category. Pandora can look into focusing on developing its other product categories to widen possible brand associations.
Cheaper substitute goods
While it has a positive brand image, the appeal to Singaporeans is still low. With no particular outstanding design, high reliance on customization it depicts a lack of a strong brand presence and focus. Consumers can easily swayed to find cheaper substitutes that provide the similar looking trinkets and customisable bracelets that serve the same purpose.
Finally, we summarize the above points into a Positioning map and a concise Table (see below):
Lastly, we list out a few indirect competitors of Tiffany & Co’s in the Singapore context. These brands resonate in the consumers’ minds as Tiffany & Co’s competitors in terms of fine jewellery, but are not Tiffany’s main competitors with regard to price range and target audience.