Faced with declining interest from younger shoppers, Tiffany & Co. has made concerted efforts to enter the conversation among millennials. In particular, they’re targeting young Chinese consumers, who contributed the most to sales growth in the Asia-Pacific region, according to the brand’s third quarter results.
The results have been mixed.
In November this year, the 180-year-old company opened a Blue Box Café on the 4th floor of its Fifth Avenue flagship store. Decorated in robin’s egg Tiffany blue, the restaurant gives customers the chance to do something Audrey Hepburn never did — have breakfast at Tiffany’s. It has become a hot spot for Chinese travelers keen to live out the movie, rather than simply purchase a piece of jewelry from the store.
A local tour guide who designs trips for wealthy mainland Chinese told us her clients were adamant about visiting the restaurant, but often found the experience unsatisfactory. The service, presentation, and quality of the food—with meals for a modest $29-$60—failed to meet their expectations for a luxury brand like Tiffany. Nevertheless, they typically persist in taking pictures to share on their WeChat accounts.
Tiffany joined the conversation on Chinese social media in entirely the opposite way with its high-end home ware collection, which features items like a $10,000 bird’s nest, $1,500 coffee can, and a $250 straw. Amazed by the stratospheric pricing, Chinese netizens decided that only China’s pre-eminent fu’er dai, Wang Sicong—who infamously bought two Apple Watches for his pet husky—would actually purchase the $9,000 sterling silver ball of yarn, perhaps as a gift for his new pet cat.
Like Supreme’s branded brick, it’s doubtful that this collection will bring in substantial sales, but it certainly gained a lot of attention. What’s more, it does some much needed work to reinforce Tiffany’s luxury positioning.
We spoke to a couple of post-90s Chinese millennials about their perceptions of the brand. They’re more familiar with the brand’s less expensive pieces, such as the $125 “Return to Tiffany” necklace and the Tiffany Key collection that starts from $180. They see Tiffany as an affordable luxury brand, not knowing it also has a high-end jewelry line whose pricing runs into the millions of dollars.
“Tiffany’s entry level items are cheap. They don’t really reflect exclusivity,” said Rebeca Li, 26, a Chinese graduate student from New York University. As a frequent shopper at Tiffany, she pointed out the difference between the brand’s lower and higher priced goods: “When shopping for high-end jewelry, the quality matters more than the brand name, and Tiffany’s stuff is actually a good bargain.”
“Modern luxury is not about actually being exclusive,” wrote Luca Solca, the head of luxury goods at Exane BNP Paribas. “It’s about making people feel you are exclusive. In this respect, Tiffany falls short.”
That’s a sentiment shared by most Chinese millennials.
Besides its unclear positioning, Tiffany faces the challenge of understanding how the idea of love and committed relationships is evolving among Chinese millennials. This could make the bread and butter of Tiffany’s business—high-end diamond marriage and engagement rings—a tough sell.
According to Angelito Tan, CEO of RTG Consulting Group, the way older generations view marriage as a commitment that takes work differs for younger generations who believe in a romantic commitment that never fades. Where past generations sought stability and security, success and recognition, younger Chinese are looking for playfulness and tenderness, honesty and acceptance.
If Tiffany wants to hold the attention of Chinese millennials, and turn that attention into sales, they need to clearly communicate who they are in a way that resonates with evolving Chinese ideas about romance. That means juggling the need to attract younger shoppers’ attention and hold on to high-end clients, or choosing sides. A $29 breakfast, or a $9,000 ball of silver yarn?