FA S M 2 4 5 - Fa l l 2 0 1 8 - A n n S t o k e r - A l y s s a D a v i s - Ja v i e r A s t u r i a s - Ha n n a h L e n a z
INDEX Mission Statement About the Company History and values Revenue streams & categories Locations and sales channels Size and scope of all activities Marketing Strategy Pricing Strategy
“To be the world’s most respected and successful designer, manufacturer and retailer of the finest jewelry.” Tiffany & Co. is committed to obtaining precious metals and gemstones crafting our jewelry in ways that are socially and environmentally responsible.
Tiffany & Co. is an American luxury jewelry and specialty retailer, headquartered in New York City. Founded by Charles Lewis Tiffany and John B. Young in Brooklyn, Connecticut in 1837 as a “stationery and fancy goods emporium”, the store initially sold a wide variety of stationery items, and operated as “Tiffany, Young and Ellis” in Lower Manhattan. Tiffany opens its doors on September 14, 1837 at 259 Broadway in New York. The first day’s sales total is $4.98. The name was shortened to Tiffany & Company in 1853 when Charles Tiffany took control and established the firm’s emphasis on jewelry. Since 1940, Tiffany’s flagship store has operated at the corner of Fifth Avenue and 57th Street in Manhattan, New York City.
Top 5 Holders of Institutional Holdings
Stock price: TIF (NYSE) $124.31 -0.26 (-0.21%)
Brand Values The company is devoted to customer experience and delight. The popular little blue box and personalengravings onto the jewelry gives the customers a real connection to the brand. Tiffany and Co also takes pride in their commitment to responsible sourcing and environmental sustainability. Each diamond is ethically sourced from safe mines based in Russia,Canada, and Africa. Tiffany and Co has been rated as one of the most ethical jewelry companies in the world by Human Rights Watch.
Revenue Streams Products and Categories
Sales Volume & Fiscal Metrics Revenue: $4.17 B Net Income: $370.10M 2018 Sales Growth: 4.2% Employees: 13,100 Net sales -$4,169.8 4% increase from 2016 Gross profit - $2,604.7 Administrative expenses- 1,810.2 Net earnings- 370.1 Total assets- 5,468.1 Inventories, net – 2,253.5 In 2017, total net sales increased $29.0 million, or 2%. Store sales increasing $8.3 million, or 1%. The total net sales increase was primarily due to increased e-commerce sales growth in the U.S.
Locations and Sales Channels -Direct selling through e-commerce, catalog, wholesale and business gift operations. (Business to business) -Omnichannel -In addition, Tiffany sells some of its collections through two online designer fashion platforms, Farfetch and NetA-Porter, reaching more than 40 countries.
Company Operated Stores = 320 123 in the Americas 54 in Japan, 90 in Asia-Pacific, 48 in Europe, 5 in the U.A.E.
Size and Scope of all Business NET SALES increase or decrease from prior year. *in millions, except percentages
2017
2018
$4,169.8 4%
$4,001.8 -3%
Marketing Strategy & Tactics Currently, Tiffany & Co. is focusing their attention on millennial consumers. The newest creative director, Reed Krakoff, has decided to rebrand Tiffany & Co. by giving the company a younger look to attract the millennial audience. The first move Reed Krakoff made was the release of a new campaign featuring celebrities younger audiences could identify such as, Elle Fanning, and A$AP Ferg. Krakoff released a new collection called Paper Flowers, that keeps the high luxury appeal that Tiffany & Co. values but also leans toward millennial style.
Buying FOB - Engagement Rings Price ranges fom 8k to 90k depending on the diamond and the carat weight. Engagement customizations is offered for rings as well as for Tiffany’s blue boxes.
12.9K - 23.3K
12.9K - 14.5K
17.2K - 90K
14.5 -19K
PART II
I. II. III. IV. V.
Size of Market Segmented view of the market Competirors Trends Citations
Size of Market Global increment by two per cent in 2017 to US$82 billion. The cost of the average engagement ring has risen from $5,095 in 2011 to $6,351 today, presenting a 25% growth over the past six years.
Americans spend $6,351 on average.
Global Diamond Jewelry (in billion U.S. dollars) 90 80 70 60 50 40 30 20 10 0
2009
2010
2011
2012
2013
2014
2015
2016
2017
The US diamond jewelry sales increased by
4% to US$43 billion.
China’s market demand grew by 1% in US dollar terms (1%). The numbers show that diamond acquisition rates remain high from millennials. Millennials are an important consumer segment, representing the bridal generation, with average age at first marriage of 24–30 in the main diamond-consuming countries.
Top Diamond Jewelry Markets (in billion US dollars) 50 40 30 20 10 0 US
China 2016
2017
Segmented View of the Market Blue Nile Inc., Signet Jeweler Limited, Amazon and Tiffany & Co. are some of the key players operating in the US diamond engagement ring market People in California spend the most on engagement rings, while those in Utah spend the least. California average - $6,560 Utah average - $2,356
KEY COMPETITORS
PARENT COMPANY Signet Jewelers Kay Jewelers opened its first store in Reading, Pennsylvania, in 1916. Some of the original products for sale included eyeglasses, musical jewelry boxes and electric razors. Now part of Signet Jewelers in Akron, Ohio, the world’s largest retailer of diamond jewelry, Kay Jewelers is the number one jewelry store in America with over 1,000 stores from coast to coast.
The world’s largest retailer of diamond jewelry. Signet operates over
3,500 stores
PARENT COMPANY Richemont Founded in 1847 by Louis-Francois Cartier. The French aristocracy was soon enchanted by the fine jewelry, and Princess Mathilde, niece of Napoleon I, made her first purchase in 1856. In 1859, Cartier opened a boutique on the Boulevard des Italiens in Paris. In 1917, the jeweler created the first wristwatch for women featuring what later became the house icon, a panther motif. Throughout the twentieth century, Cartier created some of the great classics of fine jewelry: the Tank watch (1917), the Trinity ring (1924) and the Love Bracelet (1969).
Switzerland-based luxury goods holding company founded in 1988 by South African businessman Johann Rupert.
Price ranges between $2,990- $250k.
PARENT COMPANY Swatch Group Established in 1932 by Harry Winston, the son of a New York jeweler.
The March 2013 acquisition of Harry Winston by Swatch includes Harry Winston’s production operations in Geneva, Switzerland, and more than 500 employees worldwide. The acquisition is expected to help Swatch’s prestige segment compete better against other luxury watch brands like Tiffany, LVMH’s Bulgari, and Richemont’s Cartier.
Swiss manufacturer of watches and jewellery. The company was founded in 1983 by Nicolas Hayek. The Swatch Group employs about 36,000 people in 50 countries.
Price ranges between $4,500- $500k.
ENGAGEMENT TRENDS
HUMAN RESPONSIBLE SOURCING #BehindTheBling “diamond and gold sourcing practices with respect to human rights and the support of local communities”
-99% of paper used in catalogues were sustainably sourced. -99.96% of the worlds Gem-Grade Diamonds are rejected by Tiffany & Co. -Blue boxes and bags are made with sustainably sourced paper and wood fiber materials -$1 million raised for Tiffany save the wild collection
TARGETING MILLENIALS New Chief artistic officer Reed
Krakoff
2018 Brand Btatement : “There’s something about offhanded style and strong, modern femininity that feels exactly right this season. Keeping it real may just be the ultimate luxury” To reach millenials high end designers are launching edgier, lower priced collections and hiring youthful millennial favorites like Elle fanning and models Bella hadid and Lily Aldridge to promote it.
“Love is Love” “Today and always, Tiffany celebrates true connection with rings that stand for love in all forms”
Tiffany True- First new engagement line in a decade The current trend in engagement rings is moving away from the traditional look. Dramatic Engagement ring category - These sculptural creations are an imaginative take on tradition. Millenials often seek custom designs, interesting silhouettes, and colored gemstones (aquamarine, morganite, black rhodium)
PART III.
I. SWOT Analysis II. Buying Plan III. Assortment Plan IV. Big Store/ Small Store
S
W Costumer Loyalty Highly Profitable Brand Reputation High Product Quality
Line Extensions Increase online sales Marketing Activities
O
Seasonality - Holiday Season Customers Perception Limited Success Outside Core Buisiness Out-of-Date Image
Slower Economic Growth Online retailers Competition
T
6 Months Engagement Ring Buying Plan
Assortment Plan
Total Units: 2,515 Total Budget: 70,055,314
Collection Classic
Style
# of Units
Weight
Medal
Retail ($)
Tiffany Setting Tiffany Setting Tiffany Setting Tiffany Setting Tiffany Setting Tiffay Setting Tiffany Setting Tiffany Setting Tiffany Setting Pave Tiffany Setting
230 100 230 130 50 100 100 50 100 25 25
1k 1k 1k 1.5 k 1.5 k 1.5 k 2k 2k 2k 1.5 k 2.5 k
3
Platinum Platinum
12,900 12,400 12,400 23,200 23,200 23,900 37,300 37,300 37,800 29,300 59,000
2,967,000 1,240,000 2,852,000 3,016,000 1,160,000 2,390,000 3,730,000 1,865,000 3,780,000 732,500 1,475,000
TT TT TT TT
130 130 100 80 75 75 75 10 50 30 20 10
1k 1k 2k 2k 0.25 k 0.5 k 1.5 k 2.5 k 1k 0.5 k 1.5 k 1k
YellowGold Platinum YellowGold Platinum Platinum Platinum Platinum Platinum Platinum Plat/18k gold Plat/18k gold Platinum
13,500 12,400 31,500 42,000 2,570 4,970 24,200 49,600 11,600 6,750 22,800 11,500
$49,726,860 1,755,000 1,612,000 3,150,000 3,360,000 192,750 372,750 1,815,000 496,000 580,000 202,500 456,000 115,000
3
3
Tiffany True
Harmony Novo
Round Cushion Cut Cushion Cut Princess Cut Yellow Diamond Yellow Diamond Emerald Cut
Total Units: 1,140
Total
$9,877,000
Total Units: 440
Total Units: 75
$4,368,250
Total Units: 280
$69,731,860
Total Units: 280
$2,038,500
Total Units: 300
NYC FLAGSHIP STORE 727 5th Ave, New York
Tiffany Classic N. of units: 69 Budget: $1,530,800
Tiffany Soleste N. of units: 34 Budget: $375,350
Tiffany True N. of units: 46 Budget: $976,500
Fancy Shapes N. of units: 22 Budget: $129,620
Tiffany Novo N. of units: 28 Budget: $466,540 Tiffany Harmony N. of units: 5 Budget: $12,850
$3,491,660.
NEW ORLEANS STORE 333 Canal St, New Orleans
Tiffany Classic N. of units: 16 Budget: $250,400.00 Tiffany Novo N. of units: 3 Budget: $16,690 Tiffany Soleste N. of units: 7 Budget: $59,550.00 Fancy Shapes N. of units: 6 Budget: $21,060.00
$347,700.00
We believe are greatest strength are customer loyalty and our brand reputation. Our sales last year were $51,055,515. Our most profitable months are November
and January
Total budget of $70,055,314 Total assortment of 2,515 units.
6 collections. Focused on targeting millenials with updated and timeless designs. Our biggest collection is Tiffany Classic. Our big store has a budget of $3,502,765. Our small store has a budget of $350,276.
Citations https://0-www.statista.com.library.scad.edu/study/54162/tiffany-and-co-business-information-2017/ https://www.reuters.com/finance/stocks/company-profile/TIF https://retail-index.emarketer.com/company/data/5374f24c4d4afd2bb44465e0/5374f29f4d4afd824cc15cad/lfy/true/tiffany-co-profile https://0-www.statista.com.library.scad.edu/study/54162/tiffany-and-co-business-information-2017/ https://0-www.statista.com.library.scad.edu/statistics/314414/tiffany-and-co-global-net-sales-by-region/ https://retail-index.emarketer.com/company/data/5374f24c4d4afd2bb44465e0/5374f29f4d4afd824cc15cae/lfy/false/tiffany-co-revenues-sales https://0-www.statista.com.library.scad.edu/statistics/857587/number-of-tiffany-and-co-stores-by-region-worldwide/ http://investor.tiffany.com/static-files/6b06ec33-3f12-4f0f-a908-b90dbc2db82a https://www.theguardian.com/business/2018/may/23/tiffany-new-york-jeweller-sales-surge https://money.cnn.com/2018/06/19/news/companies/tiffany-millennial-marketing/index.html https://www.bizjournals.com/chicago/news/2018/06/20/tiffanys-marketing-gambit-designed-to-draw.html
https://0-www.statista.com.library.scad.edu/study/54162/tiffany-and-co-business-information-2017/ https://www.reuters.com/finance/stocks/company-profile/TIF https://retail-index.emarketer.com/company/data/5374f24c4d4afd2bb44465e0/5374f29f4d4afd824cc15cad/lfy/true/tiffany-co-profile https://0-www.statista.com.library.scad.edu/study/54162/tiffany-and-co-business-information-2017/ https://0-www.statista.com.library.scad.edu/statistics/314414/tiffany-and-co-global-net-sales-by-region/ https://retail-index.emarketer.com/company/data/5374f24c4d4afd2bb44465e0/5374f29f4d4afd824cc15cae/lfy/false/tiffany-co-revenues-sales https://0-www.statista.com.library.scad.edu/statistics/857587/number-of-tiffany-and-co-stores-by-region-worldwide/ http://investor.tiffany.com/static-files/6b06ec33-3f12-4f0f-a908-b90dbc2db82a https://www.theguardian.com/business/2018/may/23/tiffany-new-york-jeweller-sales-surge https://money.cnn.com/2018/06/19/news/companies/tiffany-millennial-marketing/index.html https://www.bizjournals.com/chicago/news/2018/06/20/tiffanys-marketing-gambit-designed-to-draw.html