Tiffany Is In A Scary Predicament Because Shoppers Have Shifted Their Thinking

Tiffany’s profits are down a whopping 30 per cent from last year. The iconic jeweler says that high metal and gemstone costs have hurt business. 

But it’s possible that Tiffany has a much bigger problem: shoppers have seriously shifted their values and don’t care about fashion jewelry anymore.

“The consumer is not feeling the value equation of spending $300-$500 on a piece of Tiffany jewelry (silver, for example) when an iPad mini offers much more to life,” said Brian Sozzi, chief equities analyst at NBG Productions. 

Post-recession shoppers are very particular about how they spend money. They’re more likely to spend on an investment piece, such as an iPad or handbag, than on Tiffany jewelry. 

Tiffany’s overall results confirm that consumers are all about buying pieces they view as investments. Engagement and wedding ring sales were up, while the sales of trendy silver items plummeted. 

That’s concerning for the chain, because Tiffany relies on trendy jewelry to help sustain the business. 

In addition to being particular about what they buy, today’s consumers don’t put things they can’t afford on credit cards. This reduces impulse buys. 

“Welcome to the post-recession world, where big ticket items are saved up for, not bought two at a time on the credit card,” Sozzi said. 

To improve its long-term future, Tiffany is going to have to adjust to this shift in consumer thinking.

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