A set of core principles from Charles Lewis Tiffany helped set Tiffany & Co. apart from all other jewelers and which remains the foundation of their success. Tiffany & Co.’s core principles which are extraordinary design, impeccable craftsmanship and a rewarding customer experience are strongly incorporated in its’ business strategy.
- Global Presence
- High Service Standards
- Commitment to Quality and Innovation
- Marketing & Branding
- Recruitment & Training
- Supply Chain
- Intellectual Property Rights & Counterfeit Protection
- Corporate Social Responsibility
- Key Growth Strategies
1. Global Presence
The company operates in the American, European and Asia-Pacific regions. Tiffany’s stores are located strategically based on the demographics of the area to be served, consumer demand and the proximity of other luxury.
Tiffany conducts its operations across five geographical segments: America, Asia-Pacific, Japan, Europe and others. The US is the largest market for Tiffany among the American countries. The company largely distributes through its physical stores followed by its online stores, B2B and wholesale distributions.
2. High Service Standards
Tiffany’s physical stores, typically found on the best “high street” and luxury mall locations, reinforces the brand’s luxury connotations through association with other luxury brands. These stores showcasing its fine jewelry in a retail setting all in common exude a simplistic elegance.
Operating by its mission statement to be the world’s most respected retailer, Tiffany focuses heavily on customer service. To ensure that stores are staffed with knowledgeable professionals to provide excellent service, new employees complete six to eight weeks of training in knowledge, skills, and product training. They must also pass a written test before they are allowed to meet with customers. Once in the field, sales representatives work for two years to complete a rigorous certification process. According to John Petterson, senior vice president of corporate sales, the process helps the company uphold its unique tradition and culture. The online store experience, on the other hand, is enriched by an intuitive, elegant and simple navigation system. Understanding the nature of its product, Tiffany allows a “Return Policy” with terms and conditions clearly spelled out via a pop up window and includes a link on the checkout page as well.
Over the years, Tiffany & Co. has successfully established a link between high service standards that are synonymous with its Tiffany & Co. brand.
3. Commitment to Quality and Innovation
As part of its commitment to quality, the company has very strict control policies. For its sterling silver jewelry line, Tiffany & Co maintains the standard for English sterling (925/1000 parts silver) and sources materials from reputable and reliable sellers. In order to ensure that the company receives the best standard of diamonds, Tiffany & Co adopts a centralized control strategy:
“Laurelton Diamonds is a wholly owned subsidiary of Tiffany & Co. Established in 2002, the company ensures the integrity and high quality of Tiffany’s diamonds through strict control of a global supply chain that sources, cuts, polishes and supplies finished stones to Tiffany & Co. For instance, Tiffany & Co’s wholly owned subsidiary, Laurelton Diamonds.” Source: Tiffany & Co.
When outsourcing, the company finances diamond mines as guaranteed access to high-quality diamonds. The company also invests large amounts in training the workforce to polish diamonds to Tiffany’s high-quality standards.
4. Marketing and Branding
The Tiffany & Co. brand is the single most important asset of Tiffany. The strength of the brand goes beyond trademark rights and is inherent in consumer perceptions of the brand. Tiffany’s management monitors the strength of the brand through focus groups and survey research.
Tiffany’s management believes that consumers associate the brand with high-quality gemstone jewelry, particularly diamond jewelry; excellent customer service; an elegant store and online environment; upscale store locations; “classic” product positioning; distinctive and high-quality packaging materials (most significantly, the “blue box”); and sophisticated style and romance.
Return to Tiffany
One of the most popular Tiffany designs is the familiar sterling silver screwball keyring and tag stamped with the message, “Please Return to Tiffany & Co. New York,” along with a registration number. Introduced in 1969, this everyday accessory has become a symbol of the jeweler’s high standards of quality and customer service.
At time of purchase, the customer is given the keyring’s registration number on a separate card. If the keyring is lost and returned to the store, Tiffany contacts the customer and arranges for its return.
The Return to Tiffany™ motif was expanded in 1997 to include contemporary jewelry designs for men and women in sterling silver and 18k gold. Selections include heart- and oval-shape tag pendants, choker, necklaces, bracelets, rings and earrings; lock charms that attach to handbags and accessories; and a range of accessories including cuff links, money clip and card case.
The collection imaginatively combines style and function, and reflects an uncompromising commitment to craftsmanship and integrity, the hallmarks of Tiffany & Co. for over eight generations. It is this commitment that prompts customers to return to Tiffany for the designs that celebrate all of life’s meaningful occasions.
The heritage of Tiffany & Co.—the diamonds, the glamour, the storied legacy of movies and song—is richly reflected in the signature Tiffany Blue that wraps the jeweler’s every creation. One glance at this glorious hue evokes not only excitement, but also appreciation for a legendary style that was crafted by artisans working in a tradition established 175 years ago.
Tiffany’s anniversary celebration pays tribute to the generations of designers and craftspeople who forged the jeweler’s renowned reputation. The objects of their dedication are milestones in the evolution of American design and reinforce Tiffany’s history as one of the world’s premier jewelers and silversmiths. It was the quality of these creations, consistently and flawlessly delivered that engendered a relationship of trust between Tiffany & Co. and its customers. Over time, Tiffany’s devoted clientele came to associate the vibrant blue box with this special relationship and the highest standards of excellence.
The color known as Tiffany Blue was selected by founder Charles Lewis Tiffany for the cover of Blue Book, Tiffany’s annual collection of exquisitely handcrafted jewels, first published in 1845. Also referred to as robin’s egg blue or forget-me-not blue, this distinctive color may have been chosen because of the popularity of the turquoise gemstone in 19th-century jewelry. Turquoise was also a favorite of Victorian brides who gave their attendants a dove-shaped brooch of turquoise as a wedding day memento.
Tiffany Blue was later adopted for use on shopping bags, as well as in advertising and other promotional materials. True to the founder’s vision, the Tiffany Blue Box® became an icon of luxury and exclusivity. As The New York Sun reported in 1906,
(Charles Lewis) Tiffany has one thing in stock that you cannot buy of him for as much money as you may offer; he will only give it to you. And that is one of his boxes. The rule of the establishment is ironclad, never to allow a box bearing the name of the firm, to be taken out of the building except with an article which has been sold by them and for which they are responsible.
Charles Tiffany’s coveted box is today an international icon of elegance and sophistication. On a more personal level, it is a certain sign that a magical moment has arrived. The box may reveal a dazzling diamond ring that changes the course of love; or it may honor a personal achievement, a birthday or an anniversary.
Glimpsed on a busy street or resting in the palm of a hand, the Tiffany Blue Box® evokes happy thoughts of the present that will be opened with the greatest pleasure.
5. Recruitment and Training
Employees are one of the greatest assets of the company. Tiffany invests a great deal of money and time to groom its employees to dedicated service professionals. A variety of resources and ample opportunities are provided for its employees to improve their personal development and progression in the company.
Different types of training are provided in the following areas: Product, Technical, Leadership and Professional Development. As an encouragement to pursue education, the company provides tuition reimbursement and loan programs.
The company has a tailored program referred as the Retail Management Associate Program, which advances employees with outstanding performance to Assistant Manager positions at a retail location after they have completed a specialized training program.
6. Supply Chain
Tiffany places strategic significance in a robust global supply chain, to safeguard product supply that supports their growing business now and in the future. They cultivate extensive relationships with diamond producers to achieve greater control in diamond sourcing. Recently, the company expanded its finished jewelry manufacturing capacity to a new facility in Lexington, Kentucky.
7. Intellectual Property Rights and Counterfeit Protection
To maintain the company’s image as a reputable and exclusive jewelry retailer, part of the company’s strategy is its determinacy in protecting its intellectual property rights. The company also takes pride in protecting its trademarks such as: TIFFANY & CO., TIFFANY, RETURN TO TIFFANY and also more importantly, its blue boxes.
As the brand is highly susceptible to counterfeits, the company is pushing for greater legal support to combat the sale of counterfeit goods. Although it has successful crackdown with individual counterfeit websites and is continuing to do so, the company proved to have little success in the world’s largest online trading community, Ebay. The company lost to Ebay in the 2004 lawsuit and an appeal in 2010 to pursue Ebay for trademark infringement for selling counterfeit goods on its website. As Ebay cannot be held liable for fraudulent vendors; the company needs to re-strategize in order to penalize these vendors.
8. Corporate Social Responsibility
“Tiffany & Co. is committed to obtaining precious metals and gemstones and crafting our jewelry in ways that are socially and environmentally responsible. It is simply the right thing to do; and our customers expect and deserve nothing less.”
– Michael J.Kowalski, Chairman and CEO, Tiffany & Co.
World of Tiffany
At the end of Fiscal Year 2011, Tiffany & Co. reduced U.S GHG emissions per square foot by 14.7% from their 2006 baseline.
Tiffany & Co. continuously works to enhance the environmental performance of our facilities, though its internal operations do not have a large environmental footprint.
Tiffany & Co. is committed to energy conservation. To that end, in 2007 Tiffany & Co. signed on to the United States Environmental Protection Agency’s (EPA) Climate Leaders program, an industry-governmental partnership that worked to develop comprehensive climate change strategies. Tiffany & Co. pledged to reduce our U.S. greenhouse gas (GHG) emissions by 10% per square foot from 2006 to 2011
Tiffany & Co. makes charitable contributions throughout the world, based on the needs and priorities of the communities in which it operates. Through the donation of merchandise and monetary contributions, Tiffany & Co. invests in organizations working in a variety of fields: the arts, education, health and human services, the environment and other civic organizations. In 2011, Tiffany & Co. provided more than $8 million to nonprofit organizations through its global corporate giving program.
The Tiffany & Co. Foundation
The Tiffany & Co. Foundation was established in 2000 as the Company’s philanthropic arm. The Foundation provides grants to 501(c)(3) nonprofit organizations working in two main program areas: the environment and the arts. Specifically, the Foundation awards grants in the areas of excellence in design, urban parks, coral conservation and responsible mining.
The Tiffany & Co. Foundation is a separate legal entity, with its own governing board and an endowment from which it awards grants. Since the Foundation’s inception, Tiffany & Co. has contributed approximately $60 million to the Foundation’s endowment, resulting in nearly $40 million in grants through 2011.
9. Key Growth Strategies
The company’s key strategies are:
Selective global expansion and distribution without compromising the value of the TIFFANY & CO. trademark (the brand)
The company employs a multi-channel distribution strategy. Additional stores in both new and existing markets and e-commerce websites will be launched in new markets. Despite recognizing that over-saturation could diminish the brand equity, the company still sees a significant potential in a number of worldwide locations that can add value to the brand.
Enhance customer awareness
The brand is the single most important asset of the Company. Continued investment in marketing and public relations programs will be designed to increase new and existing customer awareness of the Brand. In order to monitor the strength of the brand and its message, the company will conduct market research.
Increase store productivity
The company is committed to growing sales per square foot by increasing consumer traffic, and the percentage of store visitors who make a purchase, through targeted advertising, ongoing sales training and customer-focused initiatives. In addition, in recent years, the Company has opened smaller size stores in the United States which are more comparable to many non-U.S. stores and which have contributed to higher store productivity.
Improve operating margins
The company’s long-term objective is to improve operating margin. The company intends to improve efficiency in product sourcing, manufacturing and distribution as well as by controlling selling, general and administrative expenses and enhancing productivity. Such improvements, ensures sales growth and higher earnings. This will be done through direct diamond sourcing and internal jewelry manufacturing.
Develop new products
The Company continues to invest in product development by introducing new design collections and expand existing lines to increase sales in its existing stores.
Improve service standards
The company wants to provide exemplary customer service that ensures a superior shopping experience.