The Luxury Watch Industry: What it Needs to do to Survive

By Matthew Cule, Founder of CuleM Watches.

 

Swiss watches are synonymous with luxury and prestige. But with technology having the potential to influence everything from design to marketing and affordability to route-to-market, how will the Swiss watchmaking industry survive?

 

What do collectors want?

 

Millions of consumers are now investing in the convenience of having a mini-computer, such as the Apple watch and its ilk, strapped to their wrist. I mean, why would you wear a watch that can only tell the time when a smartwatch can answer your calls, text your friends and track your fitness goals?

 

And yet for traditional and new watch collecting aficionados, a smart watch is the equivalent of a factory van to an exotic car collector – it misses the point entirely. Even watches that integrate traditional craftsmanship with the functionality of digital technology will fail to capture the attention of true collectors. The love affair with Swiss-made mechanical watches is one that can be passed on from generation to generation, with quality that will last a lifetime.

 

So classical watchmakers have an opportunity to capitalize on and appeal to an emerging market of watch collectors: a generation that grew up with technology and rejects its omnipresence.

 

However, although collectors may stick to Swiss-made classical models, consumers have come to expect a curated, technology-driven discovery and buying experience. For example, a magazine advert can now include augmented reality (AR) links, which means if you put your phone over a photo, an immersive video about the watch can begin to play. By utilising new technologies watchmakers can reach new, wider audiences, which can lead to increased sales and help a traditional brand reach a tech-savvy audience.

 

Innovation

 

Every season, classical watchmakers release a new edition of a vintage watch. But can mature brands afford to play it safe as independent watchmakers like Akrivia and Singer Reimagined challenge the likes of Rolex and Omega?

 

While the Swiss watchmaking industry is full of staggeringly creative and talented people, they often work for organisations driven by the bottom line and relying on their reputation and heritage – not their innovation.

 

Unlike the technology industry, where Google for example encourages its employees to focus 20% of their time on side projects, traditional Swiss watch brands lack novel curiosity and innovation. For watchmaking talent, even a few hours a week focused on creativity and lateral thinking can lead to the uncovering of new and innovative designs that can transform a brand, and its earnings.

 

Watch brands that seize the opportunity to make the ideas of the past relevant in the 21st century are more likely to cement their place in the industry and its future.

 

Artificial intelligence

 

The power of artificial intelligence (AI) to drive intelligent marketing has begun to evolve the watch industry as we know it. Emotional Analytics (EMO), a start-up based in Singapore for instance, uses artificial intelligence to group data from billions of social content updates into topics of interest by mapping out the emotional engagement with each topic.

 

This insight can help ensure data-driven growth for industry players. For example, EMO recently studied new watch brands with a price point below $500. This revealed some very interesting insights that watch brands can capitalise on to ensure they are creating watches that people really want. For example; people have a strong preference for Swiss automatic watches, like diving, pilot, and dress watches; they prefer 42mm watches or small 38mm watches; nato and rubber straps are the most popular; and the most popular colours are blue and black. This kind of insight can help reduce the risks when launching a new watch and enables a brand to combine innovation with design aspects that consumers want.

 

An investment within reach.

 

Luxury watches combine high-end Swiss craftsmanship and timeless design into a desirable object that will stay with collectors for decades to come.

 

These timepieces have an implied cost, however. Price points for Swiss-made automatic watches can exceed 100,000 euros. However, watch collecting is no longer an investment beyond reach. Advancements in manufacturing and factory-direct retail business models have opened up luxury watch collecting to new markets.

 

These innovations aren’t about cutting costs or quality – it’s about finding new, innovative ways to sell direct to the customer, eliminating traditional retail outlets with large mark-ups, and delivering the savings to the customer.

 

By looking at innovative ways to connect with customers, and reduce costs without compromising on design and quality, there is an opportunity for start-up brands to create another tier in the watch collector market, attracting new buyers with a slightly lower price-point.

 

There will always be a place for the very high end watches like Vacheron Constantin or Laurent Ferrier, but micro-brands in the 2,000 to 5,000 euro retail price point will be fierce competitors as consumers seek value, relevance, and an alternative to the status quo.

 

 

ABOUT THE AUTHOR

Matthew Cule is a passionate collector of watches and founder of CuleM Watches, an independent luxury travel watch brand. Culem’s World GMT collection of Swiss made dual time  ,automatic watches are designed for people who love to travel.  Culem believes there is nothing more meaningful and amazing than travel – and no object more special than a watch, so each watch is a masterpiece, a work of art and the perfect travel companion.

 

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