One to watch
Back in 2016 and 2017 the luxury watch market was in crisis, changes in legislation in Asia, the threat of the smart watch and a slow response to direct to consumer digital sales and marketing had left the once innovative sector looking like a dinosaur with an unpredictable future ahead of it.
These problems are by no means solved. As we go to print Asia is more volatile than ever and as Tim Cook, Apple CEO proudly announced ‘Apple now sells more Apple Watches than the entire Swiss watch industry combined’. Commentators note that the luxury watch industry has been experiencing deep systemic business structure and strategy problems for up to 15 years. These problems largely coming from an outmoded distribution model, unable to cope with globalisation and the internet. Problems further exacerbated by the industries ‘home goal’, the injection of large volumes of timepieces to the developing markets of the BRIC nations. The financial impact of these actions was greatest in 2016 when according to the Federation of the Swiss Watch Industry, Swiss watch reports (a closely watched barometer for the luxury goods business) an almost 10% fall in sales compared with the previous year was reported. Weak sales in general have also reflected the broader impact of slow global economic growth, a trend exacerbated in Europe by declining numbers of Chinese tourists.
One could argue the delayed reaction of this sector led to these problems but could perhaps position it’s leading brands for a healthier future than many luxury brands in other sectors. While the rest of us invested in direct to consumer digital sales and digital marketing, evolving in-line with consumer behaviour, the watch sector has been able to watch and learn and make perhaps clearer, better informed and more radical changes to strategy. Had they mobilised when the rest of us had done, the landscape would have been less easy to read, sometimes it can pay to keep your powder dry.
A race to be fastest, to be first and to deliver the most to the most is in effect a race to the bottom. In a climate of economic and global political uncertainty, with digital commerce a mature and trusted platform and consumers tired of pseudo luxury and cookie cutter experiences the watch sectors complacence can be re-branded as patience.
It’s not surprising that this sector moves slower than most, it literally runs by it’s own clock! The watch industry is a very particular animal, nothing like the fashion business, it is incredibly traditional and it enjoys slow emerging trends which run in extended cycles of years rather than seasons. If you’re interested, the current trends are for smaller, more refined mens timepieces, heritage and authentic narrative have replaced ‘show' and blue is the new ‘black’! And if like me you love to collect special timepieces, when you identify what you want you will have to embark on nothing short of a quest to track down a special piece! I’ve just bought my son a vintage Rolex for his 18th birthday, lucky boy! (Datejust, black baton dial if you’re interested) when the official distributors suggested a two year wait to find the piece I wanted I had to go off piste, calling on a motley band from an England Rugby Player who connected me to someone very important I can’t mention and along the chain to a bloke in Cardiff called Paul. Then back to the official distributor for authentication and valuation, watch collecting can be a dark art and a full time job!
The watch industry is used to planning carefully and long term, always retaining control and reducing risk, the value of the brands and individual products make this strategy both necessary and incredibly effective. The watch industry waiting lists and limited distribution perhaps the inspiration for canny sales strategies employed by street style and sneaker brands over the last 10 years.
Slow and rare is not necessarily a bad thing, I think many of us are tired of the immediately available, homogenisation of luxury. What was once the norm in all of our industries; time to invest in craft and quality, genuine innovation, relationships with consumers built over a lifetime (or even multiple generations) has been all but lost. In the watch sector this is alive and kicking, the resistance to change of course created short term challenges, it might just have positioned this sector as the one to watch for the rest of us.