For retailers, things have been difficult during the current economic recovery. The rise of e-commerce has put a dent in foot traffic to stores, and an increasingly budget-conscious customer has made splurging on discretionary purchases a tough sell.

In the jewelry segment, even well-run and highly regarded brands Tiffany & Co. (NYSE:TIF) and Pandora A/S (OTC:PANDY) have struggled to keep up with the market's gains.

PANDY 1 Year Total Returns (Daily) Chart

PANDY 1 Year Total Returns (Daily) data by YCharts

However, both brands could be in store for a turnaround. Each just recently set a more aggressive plan for winning over the finicky and cost-conscious millennial crowd, and both companies' strategy is centered around the same big idea.

What's new, Tiffany?

The big idea is newness.

Newness is a big word for Tiffany's new CEO, Alessandro Bogliolo, who took over in October 2017. Bogliolo was selected by Tiffany's board, which now has three members selected by activist investor JANA Partners. The firm had taken a 5% position in Tiffany in February 2017, and soon struck a deal with the board that forced out then-CEO Frederic Cumenal, with the goal of finding a solution to reinvigorating Tiffany's stagnating growth.

Bogliolo set about updating the product portfolio into new, hipper designs, and extending the 181-year-old brand to new categories outside of the core engagement and fine jewelry segment, such as home goods, accessories, and a fragrance -- the company's first since 2003. The company also converted the fourth floor of its Manhattan flagship store to a "Blue Box Café," extending  the Tiffany brand even to food.

Tiffany also tested new innovations such as a "pop-up" store in the open-air mall The Grove in Los Angeles in February. There, customers were able to design an engraving on an iPad, and have a silver pendant engraved on the spot, emphasizing both customization and speed. 

A white and green piggy bank.

The new $125 piggy bank from Tiffany. Image source: Tiffany.com.

You can see this "distinctive newness" especially in the company's Home Goods collection, launched just in the fourth quarter. New items include out-there products like a $9,000 sterling silver ball of yarn (I guess, for very pampered cats?), a $1,500 silver coffee can, and a $350 gold "crazy" straw.

The strategy seems to be working, at least initially. In the fourth quarter, Tiffany's home goods segment increased by double digits, helping adjusted earnings per share of $1.67 beat analyst expectations of $1.64.

Unfortunately 2018 guidance of low-to-mid-single digit same store sales growth sent shares down, as investors had been hoping for more.

Still, Bogliolo said Tiffany's new home goods collection passed "a very meaningful test," as customers responded to the new concepts. Since more innovation should kick in more over the course of 2018, investors should look to see if Bogliolo's prescription can jump-start growth.

The singer Ciara poses wearing Pandora's Shine collection jewelry.

Can Ciara boost Pandora's sales growth? Image source: us.Pandora.net.

Pandora looks to Shine

Similar to Tiffany & Co., Pandora A/S, the charm bracelet specialist, recently admitted slowing sales in its more developed markets could also be attributed to a lack of "newness." Also similar to Tiffany, the company has prescribed the medicine: fresher designs, and faster, more frequent product introductions.

Pandora will also look to extend its design chops beyond its core charms and bracelets into adjacent categories, including rings, earrings, and necklaces. The company has grown these categories in recent years to 25% of revenue, but hopes these new categories can reach 50% of revenue by 2022.

In addition to new categories, the company spent 2017 investing heavily in both design and manufacturing capabilities, expanding from one design team to three, and bulking up on lean manufacturing capabilities in Thailand, which will greatly reduce lead times.

The new investments have allowed Pandora to make more products quicker. As part of its new five-year plan, the company will increase its seven yearly "drops" to 10, and will also launch at least one new distinctive collection per year -- in the past, new collections would be a once-every-few-years event. 

One of 2018's two scheduled collections, Pandora Shine, just dropped March 15. The collection features gold-plated jewelry, and is being promoted by pop singer Ciara. 

A 2018 turnaround?

The rising tide of economic recovery didn't lift Pandora and Tiffany, and that's forced both brands to adjust business-as-usual. Conveniently for folks watching the industry, the two companies have laid out the same blueprint for turning things around, making it a little easier to identify whether their efforts are gaining traction.