Do luxury watchmakers need to embrace technology?
Image courtesy of Baselworld
As Baselworld welcomes over 1500 watch and jewelry brands to its show this week, both traditional and technological timepieces are poised for growth. Although, there will be little overlap between the two categories in the foreseeable future.
GROWTH IN THE LUXURY TIMEPIECE MARKET
Overall growth of Swiss exports was 1.9 percent in 2013 (a year earlier, exports achieved an impressive 11 percent increase). Most of the key players in watches experienced modest results in-line, with only a few notable exceptions.
Swatch gained market share, reporting better results in the industry with an +8.3 percent increase. On the other hand, LVMH’s profit and the number of stores rose while the company’s sales revenue for watches and jewelry declined slightly for the year.
Image courtesy of LVMH
How does an industry continue to grow, while its functionality continues to diminish? “Watches are unnecessary because anyone can see the time on their cellphone or TV,” Enrico De Paoli, watch collector, recently admitted to the NY Times. And as many savvy consumers know, a $20 watch tells times as effectively as a $20,000 watch.
Buying a particular watch is about image, it expresses a set of values and your personal style. As each luxury brand at its core speaks to a different customer, each watch brand and watch feature does the same.
Isetan reported that is annual watch sales rose more than 60 percent last year, driven by sales in “complications” and womens’ watches. For those ‘outside looking in’, complications are features like perpetual calendars (taking into account leap years), chronographs, and moonphases. This is consistent with feedback provided by many executives – it is purely emotion driving purchases and growth, no longer under the guise of functionality.
Is there room for “SMART” in horlogerie?
“I do not believe it can compete with mechanical watches in our haute horlogerie segment in terms of emotional value, the shared passion we have making our watches and the passion that our clients have, the aesthetic value and longevity of the object and its long-term value”
-Theirry Stern, ceo of Patek Philippe
Smart watches do not even seem to be a point of discussion among luxury watch executives. With continued, albeit slowing growth, overall, brands remain true to their heritage.
Swatch is one of the few traditional watch brands to toy with a smart watch, launching a connected watch with the Paparazzi back in 2004. It has since been discontinued. Nick Hayek, chief executive of Swatch Group is still not impressed enough with available technology to wade back into that business. Battery life, a lack of functional difference from a smartphone, and information security concerns are a few areas that need to be addressed before the Group considers entering the business again.
Tissot is currently developing a wi-fi watch, and is a brand already known for their touchscreen T-Touch watch. But it is moving forward cautiously, “we don’t want to go in the same direction as what is currently on the market, and especially not watches that provide personal information like your heart rate or anything like that, because when you enter the health arena, there are risks attached,” Francois Thiebaud, Tissot’s president told WWD.
One of the few retailers who has opened the conversation around how the two different worlds may interact is Paris Left Bank’s Le Bon Marche. Their new watch department opened in the summer featuring the regular luxury players alongside alternative brands like Slyde and MF&B in their Galerie Imaginaire Horlogere.
Le Bon Marche space in Paris Anne-Sophie Mallard for Vogue Paris, translated by Hannah J Davies
True to the gallery’s name, the brands encompassed embrace the traditional elements of timekeeping and beautiful watchmaking, but are re-imagining it in a new way. Not exactly “connected”, but expressing an innovative set of values.
Image via slyde.ch
Image via MBandF.com
“The smartwatch is an information device that tells you that you’ve got mail or a message, whereas a high-quality Swiss mechanical watch is a communication device that communicates to others who you are,” Jean-Claude Biver, president of the watches division at LVMH said.
It is important not to discount the results achieved by Swiss watchmakers. The luxury business has never been built on a fleeting new thing, and often sells and appeals to consumers through its heritage. It is the premium end of the market that is driving much of the growth in watches, exports above 3,000 francs ($3,390 US at today’s exchange) grew 2.8 percent[1], while watches below 200 francs ($226 US) declined by 8.5 percent.
Perhaps smart watches and traditional timepieces really are playing in different fields. They are certainly appealing to very different customer needs for the time being.
RECOMMENDED READING:
Victoria Gomelsky wrote an excellent piece on some of the most interesting luxury watch products on the market. Click below to have a peek through.
[1] Henselder, Axel. 2014 March 27. “Looking Good: Swiss watch industry ticking along at record pace”. Baselworld Daily News.