06 May 2021 • Retail
How Tiffany & Co might reinvent luxury retail
The acquisition of jewellery maker Tiffany & Co provides luxury group LVMH with an opportune moment to future-proof its retail strategy, then use it as a template for the rest of its brands.
After a problematic few years, Tiffany has been undergoing a turnaround with a new management team. Nevertheless, despite its global retail network of over 300 stores being vertically integrated, the brand was still unable to control its in-store customer experience. Moreover, in some countries the luxury jeweller was behaving more like a mass-market retailer – weakening its global positioning and undermining its strong brand equity. ‘It will take years to do what we want to do with this brand from a distribution, merchandising and marketing viewpoint,’ LVMH’s chief financial officer, Jean-Jacques Guiony told analysts on a call last week. It didn’t come as a surprise.
Luxury brands’ ability to command high prices is correlated to the quality of their design and craftsmanship, but most of all to their intangible value: their so-called aura, which is built on heritage, founder stories, separateness and difficulty of access. These characteristics have been nurtured over the years and exquisitely conveyed by luxurious stores, physical incarnations of a brand and shrines to its aura. Protecting the latter from the threat of growing digital accessibility must become one of luxury retail strategies’ chief concerns.
Tiffany had been exploring a new physical retail strategy with concept stores aimed at millennials: Style Studio opening first in London, followed by Tiffany @ Cat Street in Tokyo. The idea behind them is to make the experience more inclusive, fun and laid-back, offering services such as customization bars and vending machines. They proved to be quite popular and inspired some permanent design changes, like stand-alone display counters where customers can interact side-by-side with salespeople instead of over-the-counter, and interactive tables featuring new and exclusive products encouraging discovery.
The focus on the young generation is embodied now within the company by Alexandre Arnault, the 28-year-old son of LVMH’s owner, who has been appointed executive vice president of products and communication. He had brought youth and dynamism to Rimowa – another LVMH acquisition – as its CEO and is already ushering a fresh vision to Tiffany & Co. He started by hiring an out-of-the-box creative director and is using Instagram as a focus group to ask his followers what they would like to see the company do with the brand.
Tiffany @ Cat Street in Tokyo was the brand's first concept store in Japan, complete with a café. Photos: Courtesy of Tiffany & Co
Before the pandemic, while e-commerce in luxury was still minimal, the store sat at the centre of the retail strategy, supported by the digital experience. Now the roles are about to be reversed. But since the luxury store’s chief task is to protect a brand’s aura, it will have to find ways to remain in the centre.
By escaping the brick-and-mortar space, the products made the store first morph digitally, from webpages to shoppable streamed videos and social media pages. Then they made stores morph physically, from permanent spaces to shoppable pop-up exhibitions. All the while, physical spaces were demanded to be more agile with the fluctuant importance they would occupy within the omni-channel – depending on location, season, and other circumstances. During pandemics, the physical store would need to breathe with the other touchpoints: when e-commerce plays a bigger role, back-of-house might need to take some of the store areas and vice-versa.
Furthermore, a younger generation starved for time, with a short attention span, wishing to be addressed personally and continuously delighted, requires the luxury store to be even less transactional – since they already buy almost everything online – and offer novel exciting experiences. All this to say: luxury store design needs a rebirth and would benefit from an infusion of fresh ideas, excitement and energy.
Rejecting the traditional trimmings of luxury shopping, the Tiffany Style Studio in Covent Garden, features Instagrammable walls and a perfume vending machine. Photos: Courtesy of Tiffany & Co
Although filled with creative minds, the luxury industry proves to be surprisingly conservative in its stores, which lack innovation and repeat the same concept – unless they’re flagships. Moreover, many luxury brands constantly appoint the same interior designer: Peter Marino. The New York-based architect has conceived global outlets for brands such as Louis Vuitton, Chanel, Christian Dior, Fendi, Bulgari, Ermenegildo Zegna and Hublot.
This pandemic made the world leap into the future. As a result consumers are increasingly holding brands responsible for their carbon footprint throughout the value-chain, and new methods for in-store constructions need to be found. For instance, with the industry deciding to reduce the number of its fashion shows and travels, why not imagine the store with a minimal number of permanent furnishings and fixtures, instead becoming home to seasonal pop-up shops using recyclable materials? They could reprise the themes of recent fashion shows and amble from city to city, potentially becoming tailored and activated locally – all while bringing a sense of excitement and freshness to local communities.
Louis Vuitton is already using pop-up stores as three-dimensional window displays that announce new products in different locales. Similar ideas could be taken a step further, and studied for Tiffany’s new retail strategy. Eventually, this could mean the application of similar realizations to LVMH’s 75 brands operating 5,000 stores worldwide – which undoubtedly share other common denominators affected by the crisis and the need for future-proofing.
Cover image and above: Located around the corner from Tiffany's iconic Fifth Avenue flagship, the Tiffany Next Door Flagship is a temporary pop-up while the original undergoes renovation. Photos: Courtesy of Tiffany & Co
It appears Peter Marino has already taken over the current renovation of Tiffany’s Fifth Avenue flagship. The aim is to open up the whole building to public use, replacing a 1980 addition of three floors on its rooftop with an OMA-designed glass box, housing exhibition spaces, private showrooms and other facilities.
Alexandre Arnault, why not ask your new executive creative director Ruba Abu-Nimah to create a holistic, open-ended retail strategy brief and open up the competition for fabulous ideas hidden in a vast pool of architects and designers’ minds waiting to be tapped? Hiring Peter Marino to remake Tiffany’s stores is the antithesis of luxury leaping into the future.
Jocelyne Sacre is a Paris-based consultant working on the cusp of spatial design and business.