the sidewalk London’s Bond Street is still quiet. The once-UK hub for international tourists willing to drop huge bucks on luxury watches has relied on a much smaller country market, with shoppers more likely to discover that one particular purchase than to splash generous amounts of cash.
The luxury watch world has always been on the outside, despite being centered in a specialist niche, its brand in a language you can understand anywhere in the world. But Covid-19 has changed that, perhaps for a longer period.
But a lot can change in a year. In June 2021, the Federation of the Swiss Watch Industry, the industry’s leading trade association, reported that exports were approximately CHF 2 billion ($2.15 billion), up 12.5 percent from the 2019 baseline and 71 percent compared to June 2020. represented growth. The Richemont Group (whose brands include Cartier, IWC, Jaeger-LeCoultre, and Montblanc) has seen a significant increase in its share price. Swatch Group (Omega, Hamilton, Tissot, and more) saw their share price return to pre-pandemic levels. Switzerland Watches, the UK-based retailer that expanded into the US market and listed on the LSE in 2019, is trading at a record high with its price rising by 78 per cent in the past six months.
It’s not just generic names that are doing well. The pre-owned market, formerly a haven for the luxury watch world, is booming. Chronext, one of its biggest players, was expected to launch an IPO in October hoping to raise $247 million, but has since Postponed These schemes citing unfavorable market conditions. cronext connects European companies In many sectors implementing plans on the ice amid volatility in equity markets around the world, thanks to rising energy prices and faster-than-expected inflation. Once the company is listed, however, rival pre-owned watch marketplace Chrono24 is expected to follow suit.
“I’m not surprised at how quickly consumers adopted pre-ownership,” says Philip Mann, CEO and cofounder of Chronext. “Driven by this increase in demand is the next generation of consumers, who have a new definition of luxury and a new approach to shopping.” Mann describes this new consumer as someone who wants direct access to the most in-demand models and demands immediate availability—something that can be read as an indirect criticism of brands such as Patek and Rolex. is, with long waiting lists, scarcity as standard, and—surprisingly—no direct ecommerce channels. Mann says the future of the industry lies in the hands of Generation Y and Generation Z (or Zoomer) customers, who are digitally savvy and expect the brand to have an online presence.
Given that ecommerce in the UK now represents half of all retail (If you exclude groceries), the lack of a transaction site no longer speaks of exclusivity—it suggests a dinosaur-like resistance to change and a lack of understanding of what consumers want. As Ulysse Nardin and Girard-Perregaux CEO Patrick Pruniaux explain: “Customers are getting used to having access to sophisticated online services. Luxury brands that won’t offer many e-services in the future are sure to miss out on opportunities.” Will go
Brands’ resistance to fully adopting e-commerce also means they’re missing out on one of the biggest drivers of the Swiss watch industry’s recovery: China-based digital platforms Tmall Luxury Pavilion, An exclusive, invitation-only arm of the extraordinarily successful Tmall retail space, its influence grew during the pandemic. The ban on international travel meant that Chinese customers had more time to spend in a virtual shopping environment.
“Tmall is not only an ecommerce platform, but an entire ecosystem to reach a new consumer demographic and increase our brand awareness,” explains Antonio Carreiro, chief digital and technology officer at Breitling – an early adopter of the site, which led the store. Founded 2018, two years earlier than many other brands. “It is also an engaging platform to connect with a new audience of digitally savvy customers.”
Indeed, for luxury watch brands, a position in Tmall’s luxury pavilion is becoming an increasingly important part of any digital strategy. Launched in 2017, the Luxury Pavilion has witnessed a 250 percent increase in luxury watch sales year-on-year. Seven luxury watch brands from the Richemont group including Cartier, IWC, Panerai and Vacheron Constantin are now present on the platform. Watches & Wonders, Switzerland’s leading watch trade show, teamed up with the luxury pavilion while its fair was taking place in Shanghai. During the physical run of the event, visitors to Tmall can try on 3D examples of watches available at the fair and experiment with product customization. A livestream in which well-known Chinese vlogger Austin Lee discusses his favorite launches from brands attracted 7 million viewers.
“Today, as a luxury brand, you must have a clear strategy for China and digital,” Carreiro says. “The combination of the two is where the future of luxury engagement and distribution is already taking place. A customer no longer differentiates between channels. It is up to the brand to be able to engage with the customer regardless of where the customer is. ”
However, this is not necessarily the death knell for bricks and mortar. Here too, major changes in China have had serious implications in Switzerland. With travel restricted, the absence of tourist buyers has decimated sales in Hong Kong and Macau, but boosted them in Mainland China. a spokesperson of Chow Tai Fook, the Hong Kong-based jewelry and watch retailer reported a 55.4 percent increase in sales of luxury watches “due to an upbeat domestic demand and international travel restrictions.” This spike has prompted the company to add 12 dedicated watch stores to its Mainland Chinese network, and it is now looking for ways to expand its luxury watch business.
For now, the challenge for watch brands is to find synergies between brick-and-mortar locations, traditional ecommerce platforms and the new online environment to attract a generation of digital-first consumers. Brands shunning the Internet as a viable market will find themselves struggling for relevance in the long run.
“Ecommerce is no longer the cherry on the cake which improves your performance; It’s turning out to be a whole cake,” Carrero says. It’s time for those watch brands that are simply giving lip service to digital retail, or embarrassingly not engaging at all, to grab a fork.
- The latest on tech, science and more: Receive our newsletter!
- Amazon’s dark secret: It’s failed to protect your data
- “AR is where the real metaverse is going to be”
- TikTok’s sneaky way of connecting you with real-life friends
- Affordable Automatic Watches That Look Great
- Why can’t people teleport?
- ️ Explore AI like never before with our new database
- ️ Want the best tools to get fit? Check out our Gear team’s picks for the best fitness trackers, running gear (incl.) Shoes and socks), and the best headphones