Luxury-goods purveyors, including some of the biggest names in the business, are increasingly viewing the Internet as an integral part of their marketing plans. The challenge is for the companies to c…
Luxury-goods purveyors, including some of the biggest names in the business, are increasingly viewing the Internet as an integral part of their marketing plans. The challenge is for the companies to come up with strategies that provide access to a potentially huge Internet audience and yet retain the image of cachet. “You have to get excited about the power of the Web,” says Caroline Naggiar, senior vice president for marketing at Tiffany & Co., even though much about the Internet remains anathema to the 163-year-old company, arguably the most famous jeweler in the world. The New York-based merchant“s website, launched in November 1999, stays away from flashy graphics. Likewise, its advertising is subdued, and mainly in print. The website is rarely promoted on its own. Rather, the Tiffany.com address is added in fine print at the bottom of most of the company“s general advertisements, which point to the stores and the catalog as well. Something Tiffany doesn“t do on the Web is sell diamond engagement rings. The company feels strongly that professional input and conversation are needed on such a purchase. Clearly, shoppers are overcoming any reservations they might have had about buying jewelry and other high-priced items online. This year, online jewelry sales are forecast to hit US$ 917 million (Euro 1 billion), up from US$ 654 million last year. Tiffany doesn“t break out sales for its website alone. For the fiscal year ended 31 January, the jeweler“s direct-sales operations, which include the Web and the print catalog as well as corporate gift-giving, produced revenue of US$155.6 million, up 13% from the previous year. Keeping in line with the previous year, that division contributed about 9% of the company“s overall revenue of US$1.67 billion, which was also up 13%. Tiffany says it“s still processing the data it has collected about its online customers. So far, though, it has learned that a large percentage of purchasers on the Web are new customers, says Ms. Naggiar. The company says it“s also surprised to find that many of its customers are in cities where Tiffany has a regular brick-and-mortar store, indicating the site is not only for luxury shoppers in smaller towns or remote locations.