Tiffany may be losing its long-treasured aura of exclusivity. The brand faces declining profits that forced its CEO to depart earlier this year, which many analysts attributed to lower, less prestigious price points; as Citi analyst Paul Lejuez told the Wall Street Journal, “Audrey Hepburn versus Lady Gaga is a fine line to walk.” However, L2 research suggests that those lower prices and social campaigns may bear fruit in the long term by attracting millennial consumers.
While the brand’s videos featuring Lady Gaga scored only average view counts, simply because YouTube is a pay-to-play platform and the campaign wasn’t backed with major spend, Tiffany has proven adept at prompting consumers to engage with its content. In Q4 2016 and Q1 2017, the brand’s Lady Gaga campaign garnered over 35,000 Instagram interactions, according to L2 research. In contrast, the average Watches and Jewelry brand saw just 16,500 likes and comments. On Facebook, that difference was even greater: Tiffany scored 73,000 interactions, while the average brand in the category garnered a mere 17,700.
Even more crucially, Tiffany did an impressive job of integrating that social content with its e-commerce efforts, putting the Lady Gaga videos front and center of their site. In contrast, Cartier posted a slew of YouTube videos that didn’t show up on the brand site for several months.
As millennials become the new luxury consumers, heritage brands may find that maintaining an aura of exclusivity is less important than engaging shoppers. In 2015, millennials accounted for 41% of retail diamond sales in the US. By running campaigns with influencers like Lady Gaga and offering products at a lower price point, Tiffany gives those future luxury shoppers an entry point so that when their spending power eventually increases, the brand remains top of mind.