Tiffany & Co. Exclusivity to the Extreme

Tiffany & Co. confirms that they are diamond masters and encompasses all that is luxury jewellery. With the jewellery trade comes conflict, generally in terms of ethical sourcing and trading of diamonds, gemstones and precious metals. To comply with ethical standards and remain one of, if not, the most exclusive luxury jeweller, Tiffany & Co. now operate exclusively with manufacturing. In fact Tiffany & Co. own and control majority of the channels of their organisation, in order to control the quality throughout the entire process.

Tiffany Ethical Sourcing

Tiffany & Co. owns majority of the mines in which they gather their diamonds, gemstones and precious metals. Once the diamonds or precious metals are mined, they are processed in Tiffany & Co. workshops, where they are distributed to retailers and where the consumers can purchase these goods. This 100% sourcing and tracing, assures consumers with high quality and ethically sourced products. In fact, it is widely known that Tiffany no longer distributes and mines ruby gemstones due to inconsistencies with ethically trading these precious gemstones. Because of this exclusive distribution, Tiffany ensures it is the industry leader in the jewellery trade and allows itself to retail their products at a high price.

Yellow Diamond

As an independent luxury retailer, Tiffany continues to ensure it contains an exclusive image with its choice of retail locations. Tiffany & co. retail locations are selectively distributed around the globe and are placed only in the established Central Business Districts of the world and popular shopping centres. For example, in Australia, Tiffany operates in the CBD of Sydney, Melbourne, Perth, Brisbane and Adelaide and the popular shopping centres in Bondi and Chadstone. The minimal locations in Australia retain the luxury image that Tiffany entails.

Tiffany Heritage 1837

When you enter the selectively located store, the atmosphere, ambience and full service offered are what you expect from an industry leader but where to from here? In all honesty, without much change, Tiffany would still remain an industry leader because of the quality and heritage behind the product although, Tiffany have many growth strategies currently underway. The CT60 watch collection was recently launched to re-establish Tiffany as a watch leader and align them against Cartier and Rolex using Swiss manufacturing and movements. Tiffany has also released a new leather accessories range with Tiffany & Co. stamping similar to Yves Saint Laurent and Celine.Tiffany CT60 Calendar Watch

Therefore, instead of focussing on what they are renowned for, tiffany seemed to have moved away from exclusivity and the jewellery industry, toward an ambition of a luxury house. Will the name be enough to protrude them into a luxury house or will those sectors of the business simply get lost in comparison to the jewellery?

Below is videos in relation to Tiffany & Co. ‘Will You’ campaign and the making of the CT60 Chronograph Watch.

Information gathered through Tiffany.com.au

 

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32 thoughts on “Tiffany & Co. Exclusivity to the Extreme

  1. Good post! Tiffany’s distribution channel is direct market which are their website and retail stores all over the world. Over the years, Tiffany’s has been using more diverse models for their online website, in order to increse the sales and profit for the company. A situation in which only certain dealers are authorized to sell a specific product within a particular territory. The reason why they are an exclusive distribution is because you cannot get Tiffany‟s and Co.‟s jewelry at any jewelry store or retail store.

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  2. Tiffany’s use an business format franchising, Arrangement where a franchisee receives (in addition to the right to sell goods or services) the franchiser’s designs, quality control and accounting systems, operating procedures, group advertising and promotions. For example Mc Donalds, Subway, etc.

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    • Interesting point but Tiffany, unlike McDonalds’s are not a franchise. They are all directly controlled and distributed via their New York head office. Another party cannot buy a Tiffany franchise as Tiffany would lose the full control in which they seek. Franchises such as McDonald’s are able to be bought and although they have to comply with pricing and products, they are entitled to control their management systems etc. whereas Tiffany must comply with standards set from New York.

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  3. Tiffany’s customers ‘pull’ products through the distribution channel not due to offers or discounts but due to the luxury and exclusivity of products. For me a purchase I would enjoy more in store than internet purchase. Good post.

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  4. Thanks Tessa, great job! Tiffany’s retail stores are world wide. It distributes in physical stores, from business to business as well as online. Tiffany also operates the exclusive distribution: a situation in which only certain dealers are authorized to sell a specific product within a particular territory. You cannot get Tiffany’s jewellery at any retails stores.

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  5. Thanks Tessa, great job! Tiffany’s retail stores are world wide. It distributes in physical stores, from business to business as well as online. Tiffany also operates the exclusive distribution: a situation in which only certain dealers are authorized to sell a specific product within a particular territory. You cannot get Tiffany’s jewellery at any retails stores.

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  6. Have you seen Blood Diamond with Leonardo DiCaprio? Possibly the best movie I have ever seen. It is all about the blood shed in the illegal diamond trade. I am glad Tiffany is ethical and legal about the source of their diamonds (I guess they have to be as any legal issues could ruin their good name. It sounds like Tiffany have vertically integrated their company. By owning the mines it is backward integration I believe. As they started at retail in the end of the distribution channel and went all the way back to running the manufacturing.

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  7. I agree that Tiffany has developed a very sophisticated and all emcompassing selective distribution channel and lgistics infatructure. I wasn’t previously aware that they had purchsed diamond and gem mines so it was great to see an example of backward integration along with their other methods of forward integration such as the online store.

    I, like may women, am a fan of Tiffany & Co! I have a couple of treasured pieces that mark special moments in my life, including the births of my 2 sons. However, despite my love of their products I actually think they are teetering on the verge of losing their exclusivity and luxury position. Sure the prices will still be high for diamond pieces, but they have added a lot of relatively inexpensive items to their collection, especially in silver and many emblazoned with the T&Co symbols- presumably to ensure it is clear to all that the person is wearing the so called exclusive/luxury brand! In addition, the online store means anyone can order the product- you no longer need to go to one of their few stores in premium locations. I attended my nieces school formal late last year and I was astounded to see that almost all of the 17 and 18 year old girls had and T&Co piece- and not a cheap copy! Not sure my next special piece will be T&Co, I think it has become a bit too mainstream now.

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  8. Thanks for the post. I was too was not aware that T&Co owned their supply channel down to the extent of owning mines. That must be hideously expensive and probably only achievable with the luxury brand and resultant prices. As their product categories become more diverse I wonder if they will be able to continue this approach – there is a lot of moving parts and material in a watch bags. Will they move into owning farms to control their leather supplies?

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  9. Great post, I did not realise that Tiffany controlled so much of the supply chain! With diamonds being such a controversial item (i.e blood diamonds) this is a bold move to ensure quality and ensure customers of an ethical purchase. Apple should sit up and take note of this http://www.abc.net.au/4corners/stories/2015/03/02/4187424.htm as they seem to have lost consumer confidence through not controlling their supply chain.
    Although it is an expensive way to do business, they are at least delivering on their promise to their customer, which in turn should result in higher confidence and higher sales.

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  10. Good post~
    I think Tiffany is exclusive distribution and they may become monopolistic.
    I got some information about Tiffany’s channel strategy. Firstly, Tiffany company set design, production, distribution and retailing as one of the jewelry company, 91% of its sales from jewelry sales. While Tiffany also design other product, such as perfume, wedding arrangement etc.
    Secondly, a layer of sales channels: business → retailer → consumer, this channel will better ensure that profit of company and customers.
    And then, the catalog sales in the United States, the United Kingdom and the United States also has direct mail and Internet. By the end of 2011, the company opened online shopping guide service in 13 countries, Internet sales accounted for about 6% of total turnover.

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  11. Its a good insight on the Tiffany & Co. Once people starts believing the brand is authentic, company will get the market attention and here product deals with quality and trust is matter of fact here. Its great that Tiffany has achieved the status on their quality. Now with help of the distribution channel they reach their sales growth and makes them sustainable in economic market.

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  12. Thanks for the blog! I have no idea that Tiffany & Co. is having such a strong control on its supply. I think this is a good decision for them to control in this way because they can ensure the level of product quality.

    I think the other luxury brands are doing the same as Tiffany when they are selecting the location of their stores. They’re all located in the CBD of a city or some popular shopping malls like you’ve mentioned. This also creates a feel to customers that that their products are rare to find and so they are worth the prices.

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  13. Exactly, Tiffany & Co is the best example for using pull strategy. on the one hand, the overall control of each process is beneficial for keeping the quality of product and reputation of whole company. On the other hand, it can limit the increase of Tiffany & Co’s market shares. as a result, Tiffany & Co will be niche brand compared with other luxury brand.

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  14. What a great post! Thanks I had no idea that Tiffany & Co had gone to such lengths to ensure the ethics and quality of their product. They have definitely risen in my estimation.

    Personally I had not been much of a fan. I think that anyone who buys Tiffany is very much paying for branding, not the quality of the stone or the components of the product. I think its interesting that young people are willing to pay huge amounts of money for a piece of silver which in terms of its parts is worth a fraction of the sticker price. I feel the same way about Pandora charms etc.

    But I may consider Tiffany in the future, as your post explains their value in a way that had not previously occurred to me.

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  15. Extensive and controlled supply chain make Tiffany & Co maintaining their exclusive and high class branded jewellery. I cannot agree more than what you have explained in your blog. I think with Tiffany & Co is being a high class brand, I will expect them to control their own quality and supply chain. Of course as a customer, I will expect to purchase good quality jewellery with the high price that I pay. However, as what other students’ comments in your blog, I have the same opinion that Tiffany & Co products are too over price and we pay higher price only for the brand but not quality. You can get much better quality products in different jewellery stores with the same price that you pay in Tiffany & Co.

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  16. i have been purchase Tiffany for one time, in my mind Tiffany is not only a company to sell jewelry but also a simple of love and relationship. if a man buy his girlfriend a Tiffany that means true love. it is hard to believe how this company can development like this. that is the all knowledge we have learnt.

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  17. Just want to make a comment on retail distribution and keeping the luxury,exclusive branding. Probably agree with some of the comments re mainstream. Tiffany & Co always seemed more luxurious to me when someone came back from NYC having made a purchase at the flagship store which has been there since 1940, as oppossed to buying it at Westfields Bondi Junction. But this is from someone whose husband has never come home with the little blue box, perhaps I could be swayed…:)

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  18. Very interesting post!
    I am a huge fan of Tiffany and I’ve got no idea that it owns mines. For me, I really enjoy going to their stores. Apart from distributing through its physical stores, Tiffany has also got online stores, B2B and wholesale distributions.
    Tiffany definitely provides high service standards. Located on the best ‘high street’ and luxury malls, Tiffany stores focused heavily on customer service. Also, as you mentioned in the post, Tiffany has very strict control policies and maintains ethical and high-quality products. I agree with sharpym and I am quite curious about how it is going to do in terms of supply in the future, maybe farms for leather supply.

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  19. As a male, I’m a little lost when it comes to evaluating diamonds and/or identifying items within the Tiffany & Co. range. However, the blog does make good a valid point about Tiffany’s business model of exclusive distribution. The fact they own and operate a number of their intermediaries speaks volumes about their business strategy and also strength/confidence as a business. I have noticed that their places are situated in very high end areas of town, which is no surprise considering their position in the market. The question I see is that with the online marketplace, how does a business maintain that level of distinction and prestige? Apart from the obvious pricing, I see imagine it’s very difficult.

    Also, as an aside – is it really necessary for Tiffany and Co. to own all their intermediaries purely for the sake of quality control? Many companies set policies and QA guides and personnel across the various parts of their businesses to ensure quality is maintained, rather than bare the additional overheads and costs associated with owner/operating. Very interesting discussion indeed.

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  20. Good post. I didn’t know Tiffany &Co. owned their own supply chain. Nor was I already mindful that they had obtained jewel and diamond mines so it was awesome to see an illustration of in backward integration alongside their different techniques for vertical integration. Having these distribution channels can help them earn higher sales and they can even increase their economic growth.

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  21. Hey a good blog about this jewelry . Being the luxury retailer in the market and maintaining the happiness of customers is big task for Tiffany & co and they have achieved this with good positioning and functionality in the business . Their direct relationship with manufacturers and ownership of all those mines shows their caliber and goal to be a unique brand in market. But it is hard to compete with other retailers in Watch ,although they have moved from exclusive products it can not forgotten through that only Tiffany & co are famous for . So they must continue with it and should concentrate outside the CBD in a setting the stores and more customers can be reached . I know it is risky and heavy investment is required but should try in small scale and because of the good image in market more concentration should be given to maintain the same .

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  22. Tiffany’s customers’ pull ‘products through distribution channels is not due to offer or discount, but due to the luxury and exclusive products. Having these distribution channels can help them earn higher sales and they can even increase their economic growth.Buy me for me to enjoy buying more than the Internet in the store.

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  23. This blog touches on many different aspects from branding, product, operations and distribution. In my opinion, T&Co are executing product development (Ansoff matrix) creating new products (or revamping old ones). T&Co’s core business is fine jewellery and they are renowned for their high quality diamonds. According to Statista, the fashion jewellery category make up for majority of their revenue and items like watches and bags would be classified under ‘all others’ contributing to the smallest segment. Investing efforts to improve areas that can be developed or creating new products can broaden the product assortment and with Tiffany’s ‘directly operating’ expertise/model, they can certainly maintain quality and image, however to compete with luxury fashion brands such as Celine in terms of bags, or Rolex in terms of watches, T&Co may need more than that.

    However in terms of distribution, T&Co’s stores have a consistent concept, good service (in most stores) and strategic location. Their channel of distribution (luxury retail) provides a shopping experience, not just a location to sell products. Their strategic locations are often in high traffic yet prestigious areas, aligned with their brand image. Strategic distribution can serve many purposes.

    Armstrong, G, Adam, S, Denize, S, & Kotler, P, 2012, Principles of Marketing, 5th Edn, Pearson Publications, NSW, Australia

    http://www.statista.com/statistics/314433/global-net-sales-of-tiffany-and-co-by-product-segment/

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  24. As I know, the diamonds Tiffany use are not certified by GIA, but certified by Tiffany itself. Tiffany claims that its diamonds have unique cuttings which makes the stones more sparkling. I personally don’t believe a Tiffany diamond would be better than a similar diamond graded by GIA. However, since Tiffany owns diamond mine and controls the product sourcing, it can market it that way and make customer believes its good quality.

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  25. The retail stores of Tiffany & Co. in the global market are almost focusing on the popular locations, such as big shopping Centre and the central business area. The main purpose is to promote it as a luxury brand image. This brand has been developed for a long time ago; it has a stable position in the market; there are only few dealers have authority to sell some of their products. Their quality is good and it has a special meaning about true love; that is one of the reasons that customers wants to buy it.

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  26. Great post, by controlling the manufacturing of the jewellery they now have control of the quality they are selling. This keeps the brand name up with top notch jewellery and by making customers having to have an appointment to even look at the jewellery, this screams high end to me

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  27. Thank you for share your blog. Tiffany & Co is very clear exclusive distribution example. It is usually less promotion and high quality. I think Tiffany & Co only got two shops in Melbourne, one is at Collins st, other one is in Chadstone shopping center. I never saw Tiffany & Co doing discount or promotion. It is really successful worldwide luxury jewelry and specialty retailer.

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  28. Good post.
    Before I didn’t know Tiffany &Co. owned their own supply chain. Nor was I already mindful that they had obtained jewel and diamond mines so it was awesome to see an illustration of in backward integration alongside their different techniques for vertical integration. Having these distribution channels can help them earn higher sales and they can even increase their economic growth.

    Like

  29. Precisely, Tiffany & Co is the best case for utilizing draw system. from one viewpoint, the general control of every procedure is valuable for keeping the nature of item and notoriety of entire organization. Then again, it can constrain the increment of Tiffany & Co’s pieces of the pie. thus, Tiffany & Co will be specialty brand contrasted and other extravagance brand.

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  30. Owning Tiffany & Co’s world class designs has always been the most desired assets of many. Until I came across this blog, all I knew of Tiffany was , it being a high class brand dealing with classy jewellery trade, with a high price tag attached to it. The whole perception about Tiffany probably would change once you read this piece. Tiffany is truly an epitome of ethics. Rarely do we find jewellers going out of their way just to ensure the quality and the perfection of diamonds and precious gems. While owning the entire control of processing , sourcing to distribution might incur huge cost heads, work force, attention to detail at every step , its worth every penny !

    While some might argue this might be too taxing on anyone in the longer run handling each and everything, with the ethics and quality as the main base nothing can go wrong. With huge amounts at risk, it indeed is a wise decision to center their distribution centres in high bank districts. This distribution model is almost close to perfect display of balance between the risk and profit.

    Would it be able to replicate the same success in their new business sectors ? It can only be answered with time and their strategies.

    This blog is as worth as the diamonds. Thank you !

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  31. Very Good Post !!
    This brand has been produced for quite a while prior, it has a steady position in the business, there are just couple of merchants have power to offer some of their items. However regarding circulation, Tiffany & Co’s stores have a reliable idea, great administration (in many stores) and key area. Their channel of appropriation gives a shopping knowledge and not only an area to offer items. Tiffany stores concentrate intensely on client administration. Additionally, Tiffany has exceptionally strict control strategies and keeps up moral and great items.
    Thank you for the blog !

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