When you have an iconic brand you can safely take risks that might make some marketing people wince. But that isn’t what Tiffany & Co. has done with its controversial “Not Your Mother’s Tiffany” campaign. In fact its new campaign is essential to growing the brand in the future and is about as safe as you can get.
A little bit of background
LVMH is not, as some newspapers have described it, “a luxury fashion retailer”. LVMH owns 75 “maisons” – brands – all precisely positioned within one of six distinct sectors and which sell directly to their target market. Each brand operates autonomously within its own segment and positioning. This is a classic brand architecture called “house of brands” that is also used by Richemont in the luxury goods market and by P&G and Lever Brothers in the FMCG market. It’s an architecture that works well if you have a business model that supports it and brand teams that understand segmentation, positioning and targeting.
Tiffany & Co sits within LVMH’s “Watches and Jewellery” sector along with the likes of Bulgari (flamboyant jewellery to bags to hotels) and Chaumet (high jewellery wrapped up in a pampering shopping experience), and Hublot, TAG Heuer and Zenith (all high-end watch brands). While you can’t say that jewellery house Fred is anything other than an expensive luxury brand, LVMH had a gap between it and Bulgari and Chaumet that Tiffany & Co has perfectly filled.
LVMH, closed the deal for the brand only after an uncharacteristically inelegant acquisition involving last minute courtroom door negotiations, in which Chairman and CEO Bernard Arnault won a $425m saving. Some analysts have questioned why Arnault was so determined to force through such a relatively small discount. That may tell you a lot about the way people who finance $15.8bn deals think, but it also reveals that something became clear to LVMH between the deal being agreed and the deal being closed.
Some commentators have said that this was the impact of the pandemic on Tiffany’s sales, which Arnault called “catastrophic”. However, LVMH’s target customers have ready access to cash, cheap near-zero interest credit and liquidable assets, and its portfolio of brands is balanced across market sectors and geographies. When the recovery starts it will start first in the luxury market and LVMH brands are perfectly placed to take advantage.
As it is, LVMH has not had a torrid time of it so far. Its shares are up over 30% since January 2020, even though revenue and profits declined significantly compared with 2019, and Q1 2021 was exceptionally strong on both accounts. Arnault may be personally poorer than he was before the pandemic, but he’ll recover fast.
The importance of brands to LVMH
So why was that $425m so important to LVMH? One thing that wasn’t very clear going into the pandemic was that Tiffany & Co is a brand that is long past its peak. While it’s balance sheet was strong, its customer base broad and it had good geographic reach, pre-lockdown sales had yet to recover to its 2014 heyday and it had been slow to capitalise on online sales.
LVMH would have seen all these signs and, strange to say, they wouldn’t have fazed the board at all. After a few disastrous attempts at creating brands and brand extension, LVMH’s strategy has always been to buy heritage luxury companies that it believes it can reinvigorate. That requires a long-term view of business and Arnault and team would have been happy had they been able to see a credible ability to reactivate sales and start to deliver some brand recovery and growth over the near term.
However, that wasn’t the case at Tiffany. While brand sentiment and prompted recall was as high as ever, other leading indicators were looking increasingly poor. Unprompted recall had fallen across all of its lines; salience was negligible across its core gift, engagement and wedding ranges; purchase intent was declining; its brand reputation was starting to falter; and the product offering and shopping experience were seen as outdated. Web searches for the brand name were less than half the volume that they were in 2007. In short, the shine was starting to rub off its cachet.
In a situation like that $425m is a useful contribution to investment in activation and long-term brand building. Which brings us to the current controversial campaign.
Despite what you’ve heard on Twitter, Instagram and LinkedIn, this is not a repositioning of Tiffany & Co. Nor is it a targeting of Millennials or Gen Z; Tiffany’s marketers are too smart for that crap and, in any case, age is not a demographic factor that any luxury fashion brand cares about. If you can pay for it, you can buy it.
LVMH does not reposition brands, it reinvigorates. They are expert at building shareholder value by building brand value. This is entirely in keeping with (in their own words) a “business model [that] is anchored in a long term vision that builds on the heritage of our Houses and stimulates creativity and excellence”. Which is corporate-speak for the only way to ensure that you build a truly valuable brand is to invest consistently over the long term.
Reinvigorating the brand
So, LVMH did what it always does. It stripped out the upper echelons of management and put its own people in. It focused on revitalising the product line and it invested heavily in the brand.
Back came Anthony Ledru (six years as senior VP at LVMH preceded by 18-months as VP of N. America at Tiffany) as CEO. In came Ruba Abu-Nimah with 18-years experience of leading global creative branding to revitalise the stiff and starchy Tiffany store, display and advertising experience.
It also put in Alexandre Arnault* (yes, he’s Bernard’s son; put your scepticism away for a second) who has experience of revitalising Rimowa, another dull old luxury brand that was losing its cachet by (this bit is important) updating its product line and communications to appeal to a younger hipper generation. To get the product design right, Alexandre has now hired Nathalie Verdeille, the former creative director for jewellery at Cartier and former head of design at Chaumet (part of LVMH), as the new artistic director of jewellery and high jewellery
But look at why these people have been appointed. Anthony Ledru understands how LVMH works and he’s seen Tiffany and Co near its best. He understands the importance of nurturing a brand. Ruba Abu-Nimah has the experience and the ability to breathe creative life back into the brand and Nathalie is regarded as one of the world’s leading high jewelry designers. Alexandre knows how to modernise a luxury product line and its communications without damaging the much loved Tiffany brand.
And, undeniably people love Tiffany’s brand identity. They worship the sentimentality that comes with it. Everyone has heard of “Breakfast at Tiffany” even if they have never seen it. The Blue Box is adored and the white ribbon is packaging that is always kept, tucked under the bottom tray. It’s a brand that truly commands emotional engagement.
But Tiffany Pantone 1837 is probably on the swatch page of a million filofaxes and that is a problem. Younger customers don’t use Filofaxes, they use Pinterest. Tiffany’s heritage is old – icons usually are – but so is its brand and that is not a good thing if your customers are aging and your product line hasn’t kept pace with changes in fashion.
As all the indicators and the pre-pandemic sales struggle showed, the reality is that while customers may love the brand, they ain’t buying the product. Not even their mothers are.
It was Alexandre, clearly with Ruba’s stylistic input, who created the billboard ads that are causing so much of a stir. And that was precisely the point.
Why the campaign was the right decision
In luxury fashion you have to be controversial in order to get attention. You have to be bold and you have to be creative. You have to work this way because fashion does not stand still because fashion dare not stand still. Since it has no intrinsic value, it has to constantly reinvent itself. It has to create desire and then instantly gratify. So it’s built on fragile trends that eventually die. If you aren’t constantly innovating to keep yourself at front of mind, your brand will die as well.
That means that there can be no sacred cows and the new team at Tiffany & Co. clearly decided they had to challenge customer perceptions of their product line. Not a decision that experienced brand managers would take lightly and without careful research.
“Not your mother’s Tiffany” is designed to startle. To get the media and customers talking about the campaign (what brand managers call “brand fame”) which will in turn drive footfall and social and website traffic. This it certainly has done and it has done it by the bucket load.
Posts on Twitter, Instagram and Facebook have been largely outraged, insulted and offended, though not in the volumes that marketing commentators would have you believe. As ever, a voluble minority have been posting furiously. Some of them may be genuinely upset, though many may be deliberately misinterpreting the message and manufacturing outrage to grow their social following. I hope that the marketing folk at Tiffany ignore it all, because it’s making the brand visible to precisely the target audience that they want to reach.
Yes, that strapline is aggressive (personally I think it is also derivative) but had Tiffany toned it down to “Not just your Mother’s Tiffany” it would have been an anodyne execution that failed to win notoriety. As it stands the photography is as far removed from Audrey Hepburn’s 1961 buttoned-up, immaculately coiffured, cigarette holder image as you can possibly get and the whole thing grabs your attention.
This ad instantly puts 60-years between the old Tiffany and the new and it’s done it effectively. So effectively, that when you visit the website to look at the story you see clearly that through product edit, messaging and imagery, Tiffany is making it clear that elegance is a matter of timelessness rather than style and that maybe your old ideas about your mother’s choices are after all wrong.
There are those who are saying that this campaign has backfired. It hasn’t. I say that not because I have a crystal ball but because we can already see that it has achieved its objective. Tiffany is once again front of mind, people are talking and thinking differently about the brand. Google Trends shows that searches for the brand name are now just 20 points below its all time high. That could indicate the start of a big increase in consideration and, with careful shopper marketing, an increase in conversions.
Strong brands weather storms
But even if the campaign does backfire the brand won’t be damaged. Already, after just a handful of days, the invective has died away on Twitter and Instagram; posts are supportive, adoring and even affectionate again. That’s the thing about really strong brands. They can withstand the occasional misstep with no long-term impact, which allows their brand managers to take more risks than lesser brands can tolerate.
That is why earlier this year the team at Tiffany could confidently throw away the ‘brand bible’ (whatever that is) and replace any evidence of Blue 1837 – walls, lights, furniture and even the iconic Blue Box went – with bright yellow to launch a new line of yellow diamonds. That also created huge interest (and more wrong minded pontification among the marketing folk on social media), which led to coverage by press, TV and radio: i.e. brand fame. When you have a brand as strong as Tiffany & Co., you can play with the brand code and messaging in outrageous ways and still leverage brand recall.
By being daring and innovative Tiffany has started to add a new generation to its customer base. No one really thinks of themselves as old. Most of the current generation of customers who can afford and buy Tiffany will think of their mothers rather than themselves when they see the billboard. Those who don’t will eventually come back to Tiffany. Or, as is more likely, be delighted by a gift in a Blue Box tied with a white ribbon.
*There have, of course, been accusations of nepotism but it should be no surprise that a family firm like LVMH should appoint a son to manage one of its brands, just as it employs his sister Delphine (executive vice president of LVMH), and brothers Antoine (CEO of Berluti) and Frederic (CEO of Tag Heuer).