He’s been in situ now for just over a year and while the firm has been knocked off course in recent quarters by a drop-off in Chinese tourists, he’s pushing ahead with those omni-channel objectives.
These include a global IT upgrade to a common platform, a roll out that’s accelerating, with seven additional countries going live over the past three months. The upgrade is built around back-office systems, including moving to a common order and inventory management system, a single financial instance, and for the first time a source-to-pay procurement system.
Front of house, there’s been more focus on personalization initiatives and more sophisticated marketing and messaging, says Bogliolo, including the Make It My Tiffany program which allows customers to customize pieces of jewellery. This was launched in time for the Holidays with an eye to the online customer via YouTube and other social platforms.
As for the e-commerce interest this is delivering results, insists Bogliolo:
Our website serves as a powerful marketing vehicle to further enhance brand and product awareness, and online shopping has been increasing. In fact, we have been very pleased with double-digit e-commerce sales growth in the quarter and year to date…we have 13 countries where we operate our direct e-commerce, and the sales growth in this channel has been strong double digits to date…We are pleased with this because it shows that the investments we are making in e e-commerce to improve our platforms, our assets and our offer there are paying back, and the growth is much higher than in the brick-and-mortar.
Of course, we are just at the beginning of the journey. I keep on repeating this because we have been working very hard in the last three quarters, but I think we have years in front of us and when it comes specifically to e-commerce, we are working very hard now for major improvements next year and in the years to come. This is not like anything else, is not something that is fixed in a couple of quarters, but I can tell you this we take very seriously the e-commerce opportunity in western countries as well as in Asia.
Love the store
But in the market in which Tiffany operates, the store and the in-store experience remains a non-negotiable part of the customer’s engagement. With that in mind, upgrading the real estate is a priority aspect of the omni-channel push. Bogliolo says:
To improve the in-store experience, our sales professionals are engaging with customers in a more consultative way, and we are increasingly seeing the benefits from utilizing our global CRM system capabilities. We are also addressing the look and feel of the stores with visual merchandising enhancements in our North American stores this year, and will do so in all stores globally next year.
We have seen in the last nine months an increase, a substantial increase in traffic both in our stores, physical stores, as well as our website. We have seen conversion rates increasing in the first part of the year as well as in the last quarter. Now, difficult to say if this is directly related to the activities that we have done in the stores, but for example we have enhanced our visual merchandising [VM] in the United States and the conversion rate that was growing in the first two quarters after these enhancements has grown at an even faster pace.
Now, is it totally due to the enhanced visual merchandising? Nobody knows, but for example, I’ve been to several stores in the US after this new VM project and our teams were enthusiastic. They were reporting customers saying, ‘oh, what did you do to the store, it’s new, etc’. Well, in reality it was simply new visual merchandising.
That’s encouraging, he adds, as there had been a gap between how to engage with existing customers and potential new customers to whom the digital and omni-channel messaging is pitched:
We have quite radically changed our communication in the past year and so this was an area of concern for me, to monitor is it working or is not working? I’m very pleased because constantly, we have seen an increase in sales both to new customers as well as an increase to existing customers.
This to me shows two things: one is that the new messaging of the brand is resonating with new customers but is not alienating existing customers. Now, this growth to existing customers is due more to the new communication or is due more to the enhanced CRM we have, that I’m not able to tell you. But what I can see is that the fundamentals of the business that at the end of the day is local customers, traffic, conversion rates, they are all positive.
High-end jewellery is another retail area in which I am not the target demographic, but it’s a market sector where my assumption has always been that going into the store to look and feel is a huge part of the customer engagement. So the softly, softly approach that Tiffany has taken to omni-channel evolution has been understandable.
That said, in Bogliolo’s statements of intent, there’s a clear undertone of accelerating the digital investment, although the back-end IT upgrades to improve operational efficiency are likely to dominate thinking for 2019.
There are clear signs of success in reaching out to a younger, digital demographic as Neil Saunders, of GlobalData Retail notes:
A few years ago, this group was largely apathetic to Tiffany, viewing the brand as old-fashioned and irrelevant to their needs and tastes. In a relatively short space of time, Tiffany has started to shift that perception and demonstrate that it has something fresh to offer to younger consumers.