In an era where e-commerce and retail brands are competing against each other to gain consumer attention, Louis Vuitton has not only managed to survive and sustain but also pull a lucrative deal with one of the world’s oldest and most well-known jewelry brand.

World’s leading France-based luxury retail group LVMH Moët Hennessy Louis Vuitton SE (“LVMH”),  and NY-based jewelers Tiffany & Co. have entered into a definitive agreement whereby LVMH will acquire Tiffany for $16.2 billion. This deal would place LVMH in the league of world’s most digitally advanced luxury retail marketing groups. Tiffany, backed by their 180 years of craftsmanship in delivering jewelry experience to high-paying clients, makes an apt entry into the LVMH stable.

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Post-acquisition, here is the immediate impact that we foresee in retail marketing.

Luxury Brands Will Make their Own Niche in Ecommerce

This latest deal will prove that it’s best to make way for young brands. Age-wise, both Tiffany and Louis Vuitton belong to the mid-Industrial era. However, the buyer group of LVMH was only formed in 1987 after merger of legendary luxury brands Louis Vuitton and Moët & Chandon and Hennessy. The combined force of LVMH and Tiffany would outflank the generic ecommerce marketplace with their focus on niche consumer groups, who are not usual millennial buyer, but are mostly patrons of art.

In short, other leading luxury brands and jewelry brands could embrace the M&A way to beat competition from young players in the retail marketing ecosystem.

Prepare to Transform

Traditional jewelry shops need to better prepare for the digital ecosystems. With global sales of over $4 billion in 2016, Tiffany fulfills the jewelry appetite of consumers belonging to every age-group. However, LVMH does it best when it comes to acquiring and retaining Gen Z shoppers.

At the time of this announcement, Bernard Arnault, Chairman and Chief Executive Officer of LVMH, said,

“We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewelry world, to the LVMH family. We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons. We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

LVMH had offered to Tiffany an “Unsolicited, Non-Binding Proposal” back in October, which both companies had confirmed officially.

Get to the Fortune List to Make Your Business Count

For long, Tiffany & Co. was categorized into the group of Specialty Stores. Already ranking among the top 500 global companies in 2019, Tiffany was 15th in Forbes list of World’s Best Employers.It is obvious that such LVMH had set its eye on Tiffany long ago. The LVMH-Tiffany deal should inspire other retail marketing agencies and brand management companies to better serve their clientele and help them get to the elite lists and best-employer ranks.

Alessandro Bogliolo, Chief Executive Officer of Tiffany, said,

“Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweler. As part of the LVMH group, Tiffany will reach new heights, capitalizing on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”

E-commerce retail marketing companies should focus on acquiring, retaining and training employees, partners and technology makers in exactly understanding the disruptions in the market, and collaborate more openly for the future.

Can European Retail Market Out-business American Players?

This French-American deal is a unique proposition considering how different these two groups are. But, both brands are connected with a common thread of embracing new-age retail technology for the future. It’s hard to exactly garner data on how the European retail market compares to America’s, it’s obvious that the future of e-commerce is more connected and behavior-driven than what it was in the outgoing decade.

Both Tiffany and LVMH have a strong presence on digital-native platforms.

For example, Tiffany & C0. have 11.1 million Instagram followers, and Louis Vuittion ha over 35 million.

If combined together, these two brands alone outshine the top 5 global brands in luxury products.

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The acquisition of Tiffany will strengthen LVMH’s position in jewelry and further increase its presence in the United States. The addition of Tiffany will transform LVMH’s Watches & Jewelry division and complement LVMH’s 75 distinguished Houses.

So, yes, it would be great to compare the two regions for retail marketing technology and these intend to configure around the idea of delivering best services as part of their retail customer experience.

The Tiffany Story

Since 1886, when it established the eponymous diamond ring as an enduring symbol of commitment, Tiffany has stood for love. Its extraordinary diamonds are cherished for generations and its legendary jewelry designs are the ultimate reference in the global jewelry world. Even the Tiffany Blue Box is recognized worldwide as an icon of refinement and desirability.

Founded in 1837 when Charles Lewis Tiffany opened the first store in downtown Manhattan, Tiffany today is the leading luxury brand originated in the United States and delights discerning customers in more than 300 stores around the globe. Nature is not only the source of inspiration for Tiffany’s designers, but precious metals and natural gemstones are necessary components for the creation of its designs. Tiffany stood apart in the industry as an early proponent of sourcing these materials with a socially and environmentally responsible rigor. Protecting the environment and respecting human rights continue to be core business principles.

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Roger N. Farah, Chairman of the Board of Directors of Tiffany, commented, “Following a strategic review that included a thoughtful internal process and expert external advice, the Board has concluded that this transaction with LVMH provides an exciting path forward with a group that appreciates and will invest in Tiffany’s unique assets and strong human capital, while delivering a compelling price with value certainty to our shareholders.”

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Source: LVMH News