Has Tiffany Lost Its Luster?

When we visited Rome, it was amazing how easy it was to purchase counterfeit items throughout the city. Not from stores, but from vendors who spread their wares out on blankets or in booths that could be folded up in a moments notice. This was especially abundant Spanish Steps area. If you're not familiar with Rome, this is the center of luxury shopping in the city. Dior, Tiffany, Prada and other luxury brands all have storefronts in this world class shopping district. So it was interesting to see so many people selling low cost versions (poor quality ones, I might add) in the area.

Want a Gucci bag? Try the corner booth. Looking for Fendi sunglasses? Check the stall down the street. People buying fake luxury goods are (in most cases) doing so to impress others and probably can't or won't spend the amount needed to buy legitimate luxury items. But here's the catch: it is illegal to buy these items, and if caught you will be fined $3000 euro. That was about $4000 USD last October. So the tourists who took the risk of buying fake Fendi sunglasses from "mobile merchants" like these could be fined an amount higher than the cost of bucking up to buy a pair of legitimate Fendi shades. But based upon the number of fake items (and busy vendors) we spotted, the fine was not enough of a deterrent to keep shoppers from snatching up the phony goods.

Why does it matter? In our brand-conscious world, the abundance of counterfeit goods lowers the public perception of the luxury brands themselves. If it appears every teenager you see at the mall can afford a Louis Vuitton bag, why would you want to shell out your hard-earned money for one? What was once a status symbol has become ubiquitous. Commonplace. And who wants to pay good money for commonplace? This is precisely what has happened to the Tiffany brand in recent years.

Once the epitome of class and wealth, Tiffany has become so common (and so often copied) that the company has lost much of its cache with the upper class. The popularity of their sterling silver necklaces and bracelets actually caused problems with overcrowding in many suburban stores. The result? More established customers felt the reputation of the brand had become watered down. The other side of this issue was that Tiffany & Co. became dependent on the revenue brought in by the younger teen demographic. Now it is risking profits to correct the trend and bring the brand back to its former status.

The bottom line? Sometimes others dilute your brand worth by generating lower quality, lower cost versions. (Maybe it's a competing plumber with no experience but lower prices.) At other times the loss of brand stature is self-inflicted. (Say, when the more experienced plumber lowers his prices to compete with the novice. Savvy customers might feel his "too low" prices indicate poor quality of work or lack of experience.) Either way, it's always an uphill battle to revive public perception of your products and services - your brand. So before you buy that "Larry" Vuitton handbag (or worse yet, start manufacturing them to lure a new market), take a moment to think of the implication it can have on the brand in question. Pennies earned or saved today could end up costing you big dollars in the future.