A friend outside the business emailed me an article from BusinessWeek the other day, titled “Tiffany vs. Costco: Which Diamond Ring is Better?” He asked: “Is it true, are Costco diamonds as good as Tiffany’s?”
And really, that’s a tricky question to answer. First, just scanning Costco’s diamond selection online, Costco sells many good quality gems. This is a company, you may remember, that once offered a $2.3 million pink gem for sale.
All this brings to mind a survey we wrote about last month from Unity Marketing, which found that a majority of affluent consumers now prefer Zales to Tiffany. That story resulted in some of the angriest comments JCK has ever gotten. (My favorite jibe: “I now prefer peanut butter to caviar.”) What we found noteworthy about the survey wasn’t necessarily its specific findings—it should have included Kay and Jared—but its central insight: Luxury consumers are shopping in all sorts of stores these days, not just the traditional “upscale” outlets.
Unity Marketing president Pam Danziger says this is because many wealthy people just don’t feel that rich these days. While making $250,000 officially ranks you in the top 2 percent of income earners, if you live in an expensive place like New York City, that doesn’t get you that far.
But this isn’t just about how people feel. Take former Republican presidential candidate Mitt Romney. He surely doesn’t consider himself poor; he spent much of 2012 being reminded of how much money he had. But a month after losing the election, he was spotted shopping at—you guessed it—Costco. He didn’t discuss why he chose that particular retailer, but it was likely for the same reason its other customers do: You get some good deals there.
It’s clear the traditional definitions of luxury, and what constitutes a luxury consumer and luxury retailer, are breaking down. We see this in our industry, where jewelers have been selling things they never would have sold in the past, including charms, silver, and even cubic zirconia. As Rio Tinto’s Rebecca Foerster told The Centurion newsletter:
The bridge between ‘fine’ and ‘fashion’ jewelry is becoming increasingly blurred. It’s not just about the components anymore. As long as the brand has the right story, the right values, the right quality, and the right design, it will have the right perceived value to the customer.
Which brings us back to Tiffany vs. Costco. The BusinessWeek article is built around a discussions thread on Weddingbee.com. At one point, someone writes they would be embarrassed to tell their friends they got their engagement ring from Costco; others say your friends would be shallow to ask, and probably won’t. Obviously, no buyer would ever be ashamed to say they got jewelry at Tiffany. But the article notes one key difference, which, I would argue, is more important: Tiffany services its product by offering to resize rings. Costco doesn’t. So it’s not just about the blue box, but what backs it up.
Tiffany is perhaps the greatest brand name the world of jewelry has ever known. But even that will only get you so far, and it must be constantly maintained; one of my younger co-workers told me she had never heard of the movie Breakfast at Tiffany’s. The best luxury retailers (including the big T) have remained relevant because they offer not just the best raw materials, but original and exciting product with the best design, excellent service, well-educated sales-staff, exacting quality control, and top-notch ethics, both social and otherwise. And—this is most important—they have managed to communicate that to the public.
Because we who live and breathe this stuff may assume consumers, including wealthy ones, make distinctions between high-end retailers and Zales and Costco. But it’s becoming clear: many don’t.