How should Tiffany modernize its flagship?

Discussion
Source: Tiffany & Co.
Aug 31, 2018
Tom Ryan

Tiffany, which has faced challenges attracting Millennials, is planning an extensive renovation of its 57th Street flagship.

On Tuesday’s second-quarter conference call, Alessandro Bogliolo, CEO, said the 10-story building has undergone several renovations since opening in 1940, but the planned one will be “much more a transformation that is aimed to delight our customers.”

One priority will be to “repurpose the space to maximize the client-facing” opportunities. Only 45,000 of the 124,000 square feet space is used for retail. Mr. Bogliolo said, “We will increase the surface dedicated to retail, but also to events, to hospitality for our customers as we leverage on the success of the Blue Box Café and also space for VIP customers.”

Mr. Bogliolo sees customer service “dramatically” improving because of the expanded capacity, which allows merchandisers to elevate the “delight and treatment” of both heritage and newer categories and improve omnichannel integration.

He added, “We are thinking boldly on this project, that while respecting the building’s historical significance, we will create an environment that we intend will be second to none.”

The renovation, to start next spring and run through holiday 2021, comes as Tiffany has rebounded with its second straight quarter of robust sales, in part due to some success appealing to younger customers.

Last fall’s opening of Blue Box Café at the flagship was a hit. Customers can experience their own “Breakfast at Tiffany’s” and Instagram-worthy moments with the robin’s-egg blue theme and views of Central Park.

The new Paper Flowers collection has sold well and is seen as a break from Tiffany’s stodgy classic offerings. New marketing features younger celebrities and messaging, including actress Elle Fanning in one commercial dancing to a hip-hop version of “Moon River,” the iconic song from “Breakfast at Tiffany’s”

Speaking to the Wall Street Journal, Andrea Davey, Tiffany’s SVP of marketing, said Millennials are seeking a less-formal version of luxury. She said, “Fine craftsmanship, superlative design and enduring beauty are more resonant with this generation than ever — so much so we’re creating and marketing pieces that you can live with every day, and not only put aside for special occasions.”

DISCUSSION QUESTIONS: How should Tiffany’s flagship be reinvented for the Millennial generation? Should the renovation embrace any of the tech-enabled flourishes of many newer flagships or stay much closer to its stately heritage?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"While the change in the flagship store to a more experience-oriented place may draw traffic, I am not sure it will draw traditional Tiffany business."
"Tiffany’s success is so steeped in heritage, they shouldn’t depart too far from that for the whimsies of the Millennial market, particularly in-store."
"To celebrate the stately heritage and amplify key elements of it, is to link Millennials to a time of tradition..."

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14 Comments on "How should Tiffany modernize its flagship?"


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Camille P. Schuster, PhD.
BrainTrust

Is the lack of “delight and treatment” of heritage and newer categories keeping Millennials from shopping at Tiffany? Is the Blue Box cafe delighting current consumers or Millennials? How is their global perspective going to draw Millennials? While any of these approaches may help, I see no direct link between these ideas and what is keeping Millennials from shopping at Tiffany. As a result, the success of these approaches is not high.

Lyle Bunn (Ph.D. Hon)
Guest

Using more of the building’s available space for areas of consumer discovery and experiencing the types of flourishes that have proven their value elsewhere will go a long way to refreshing the Tiffany/consumer relationship. Shopping has to be fun and outcomes, achievable. To celebrate the stately heritage and amplify key elements of it, is to link Millennials to a time of tradition and the contribution of the retailer to measured social change. These are values that resonate with the emerging generation of Tiffany’s patrons.

Gene Detroyer
BrainTrust

Dear Tiffany,
Don’t forget who you are and who Millennials are.

The reality is the increase in Millennial sales in the last two quarters has been because they have gone downscale.

While the change in the flagship store to a more experience-oriented place may draw traffic, I am not sure it will draw traditional Tiffany business. And let’s also be careful, the traffic of the 57th Street store has dropped significantly since the Presidential election, more because of access as it is part of Trump Tower than anything else.

Ryan Mathews
BrainTrust
The answer to the first question is simple if you first ask, “Should Tiffany place the majority of its marketing efforts against Millennials?” If the answer to that is yes, then I guess this makes sense … assuming of course that Tiffany can leap past the “trend pimp” — as they were called in that monumental study of American marketing “Josie and the Pussycats” — assumptions and broad generalizations about Millennials and determine what the cohort will actually look like as they age and evolve. One harkens back to 1967 and Golden Gate Park where legions of paisley-covered marketers and social scientists with flowers in their hair banged on about anti-materialism, total personal freedom, a lifetime of self-exploration, rejection of traditional jobs and authority, etc. Those “hippies” are now “suits” who have retired or are about to retire — the markets for face paint and cheap Indian beads are the sad casualties of their maturation. The answer to the second question is a qualified yes. Tech-enabled flourishes — whatever that means — can enhance these… Read more »
Doug Garnett
BrainTrust

I like the idea of flagship stores that are far different when they are located in New York or in the town of the company headquarters. But I don’t expect much of the “experiential” stuff to be useful elsewhere. (Are we reduced to calling breakfast in the store “experiential”? It’s a great function that Woolworths, May D&F, and many stores offered in the 1960s and 1970s. But it’s not really an “experience.”)

We also need to start noting CEO buzzword mania. Rather than saying something directly, clearly, and firmly, the CEO says “repurpose the space to maximize the client-facing opportunities.” That’s sad and it’s concerning for Tiffany.

Cynthia Holcomb
BrainTrust

Whoever Tiffany is re-inventing for, great job! Culturally all age groups have evolved with the times, not just Millennials. I love the video — it’s fresh, fun and totally gets the new message across. Tiffany’s not so secret sauce leverages the emotions of Tiffany’s past, fueling the desire for new, modern, wear everyday Tiffany collections. A sweet blend of iconic coolness and modern aspiration.

Georganne Bender
BrainTrust

I just read another article on all the things Millennials are supposedly killing and my first thought here was, “Not Tiffany, too.” I have so many memories of shopping there with my mother and daughter. Guys joke about that little blue box being a “get out of jail free” card. That 57th Street store is an icon that crosses all generations.

Dramatically changing the store to attract a mercurial group like the Millennials is tricky. You don’t want to alienate the 50+ shopper, who over the next 20 years is expected to increase its spending by 58 percent, and what about Gen Z? What this upcoming powerhouse wants doesn’t always align with what Millennials want in a shopping experience. Tiffany needs to move forward, but subtlety in any transition will be key.

I wholeheartedly agree with what Gene Detroyer said: “Dear Tiffany, Don’t forget who you are.”

Jasmine Glasheen
BrainTrust

I’ve been a big fan of many of Tiffany’s marketing moves lately — Blue Box Café and painting taxis blue — it’s all very exciting.

However (and this is a big however) that commercial feels inauthentic to Tiffany’s brand. The hip hop and breakdancing feel desperate and as we’ve discussed, inauthenticity is the kiss of death with Millennials and Gen Z Customers.

Georganne Bender
BrainTrust

I don’t love it either. It seems forced.

Jennifer McDermott
Guest

Tiffany’s success is so steeped in heritage, they shouldn’t depart too far from that for the whimsies of the Millennial market, particularly in-store. Revamping the physical space too far from its legacy risks alienating its loyalty clientele. They should focus on other efforts to drive Millennial interest such as influencer engagement, more accessible and modern lines and a flawless online experience.

Gabriela Baiter
BrainTrust

The most shocking part of this article is finding out that only 45,000 of the 124,000 square feet space are used for retail. With so much space, I actually would argue that there is room to target different areas of the store to serve Millennials and baby boomers in the same place. Using the space to bring people into Tiffany’s world is brilliant. If they extended their lounge spaces and take a hospitality-led approach to selling, they can maintain their heritage while appealing to a broader customer base.

Craig Sundstrom
Guest

I’m not entirely sure it should be “reinvented,” at least not solely with regard to the Millennial Generation. I would think they’re still heavily dependent on their older “traditional” customer, and it’s almost always a mistake to forget the present in trying to embrace the future.

Looking at the bigger picture, it’s hard to imagine a product more resistant to online competition, or more representative of a traditional “downtown shopping experience” than this: it’s possible the store could be downsized a little bit — I’m sure it didn’t have the support of branch network in 1940. But if can’t make it (in at least a similar form), the concept of a “flagship” truly is doomed.

Georganne Bender
BrainTrust

“It’s almost always a mistake to forget the present in trying to embrace the future.” That’s so true and yet it happens all the time.

Kenneth Leung
BrainTrust

Tiffany’s has a heritage it needs to leverage for future generations of shoppers, Millennials or otherwise. Shoppers will visit the flagship stores if they create “the moment” which is now captured and broadcasted on social media, or privately if they choose. The key would be to have something for the casual wearer to the heritage shoppers.

wpDiscuz
Braintrust
"While the change in the flagship store to a more experience-oriented place may draw traffic, I am not sure it will draw traditional Tiffany business."
"Tiffany’s success is so steeped in heritage, they shouldn’t depart too far from that for the whimsies of the Millennial market, particularly in-store."
"To celebrate the stately heritage and amplify key elements of it, is to link Millennials to a time of tradition..."

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