The web now accounts for more than three-fourths of all direct marketing sales for Tiffany & Co., but e-commerce and catalog revenue grew only moderately in 2007.
Web sales for Tiffany, No. 98 in the Internet Retailer Top 500 Guide, reached $150 million in 2007 and accounted for about 82% of total direct marketing sales, the company told analysts on its recent year-end earnings call.
But Tiffany’s direct market sales grew year-over-year by only about 5% to $182.1 million from $174.1 million in 2006. In comparison Tiffany’s U.S. retail sales, which includes stores, grew by 11.4% to $1.47 billion from $1.32 billion 2006 while total revenue rose by 14.5% to $2.93 billion in 2007 from $2.56 billion in the prior year.
Despite only modest growth in its web and direct market sales, Tiffany still sees e-commerce as a solid sales channel and multi-channel retailing tool. “Tiffany’s Internet business has grown dramatically with high profitability since being launched in 1999,” CEO Michael J. Kowalski told analysts. “E-commerce nicely complements our retail store presence while also acting as an effective marketing communications tool.”
The retailer, which also reported an average direct ticket of about $233 in 2007, is well on its way to converting even more catalog sales to the web. In 2007 the company redesigned Tiffany.com and added larger graphics, a cleaner organization and better customer service tools. The company also reduced the size of its catalog circulation by about 10%, Kowalski told analysts.
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