Tiffany & Co., which sold more than $500 million worth of diamond engagement rings in 2017, has started a program that will provide customers the countries where their diamonds were mined, and, eventually, information on where the gems were cut, polished and set.
The issue of sourcing is especially acute with diamonds, which change hands many times from mine to showroom. More buyers are asking for specific evidence that their gems were not produced using child labor or to finance wars or terrorist activity -- the concerns over so-called blood diamonds. So jewelers are starting to work provenance into their marketing, with some even exploring blockchain technology as a way to provide more information about a gem's origins.
But true clarity -- a feature also prized in the gems themselves -- remains elusive. And Tiffany acknowledges that it cannot provide customers with the precise location where a diamond was mined.
"A lot of diamond companies are still very opaque about their operations," said Thomai Serdari, who teaches luxury marketing at New York University. "There haven't been any particular strict guidelines to ensure that a diamond is truly coming from the area a dealer is claiming it's coming from."
Tiffany's roots date to 1837, when it started selling stationery and "fancy goods" in Manhattan. It is now known for the engagement rings it packs into robin's-egg-blue boxes, as well as curiosities like sterling silver replicas of a paper plate for $1,000 and a ball of yarn for $9,000.
But the retailer has fought to attract younger shoppers. Disappointing sales led its chief executive to resign abruptly in 2017, and a new leader, Alessandro Bogliolo, took the role 15 months ago.
The company has had several strong quarters since his arrival, but in its most recent earnings report, a critical sales growth measure was less than half what Wall Street had expected. The company's stock has tumbled 17 percent since the miss in late November; Bogliolo largely blamed weak spending by Chinese tourists, who have scaled back during a trade war with the United States and a slowing economy at home.
Tiffany hopes to perk up interest in the brand with its program on sourcing. Initially, it will tell customers the country from which the diamond came. In 2020, it will offer information about where each diamond was cut, polished and set. Bogliolo said he hoped to someday be able to provide the name of the mine where it was found, the artisan who shaped its contours and the jeweler who secured it in its setting.
"It's relevant nowadays for customers," he said, surrounded by archival sketches and vintage Tiffany jewelry at the company's headquarters in Manhattan. "Customers are very educated, mature and demanding."
Tiffany's efforts to attract younger shoppers extend to the Instagram-ready cafe it opened in 2017 inside the nearly 80-year-old flagship store in Manhattan. Its recent ads have featured Zoe Kravitz, an actress described as "the reigning millennial fashion icon," and a remix of "Moon River," the classic song from the 1961 film Breakfast at Tiffany's, performed by rapper A$AP Ferg and actress Elle Fanning. At the Golden Globes on Sunday, Lady Gaga wore a custom necklace with more than 300 Tiffany diamonds to collect her trophy for Best Original Song.
Information for this article was contributed by Kim Bhasin and Emma Chandra of Bloomberg News.
Business on 01/10/2019