Last month, one of the watch industry’s most esteemed veterans, Franco Cologni, posted an article on the HH Journal entitled “From Feast to Fast” — where he discussed the current state of the watch world. As many have noted, Swiss watch exports are down — and while some are talking doom and gloom (just search the internet for lots of negative stories about the Swiss watch economy), others (myself included) are saying seize the moment. This is not the time for watch brands to lay down arms and hope for the best based on past laurels; the numbers all add up to building blocks that will help build a new future for watch brands and retailers.
In Cologni’s article, he writes: “More than ever, our two concerns must be the product and the customer.” So true. The more I interview watch brand executives, the more I hear them saying the same thing. Vacheron Constantin’s Juan-Carlos Torres admitted months ago that it isn’t enough to have a great history, watch brands today need a great product, great intrinsic value and great service. Right on.
Yesterday, in an interview with Aldo Magada, CEO of Zenith (the brand being a relative newbie in the USA due to trademark issues with the name), he said customer service and the product/value relationship are the most important considerations today.
“I think the problem is about luxury in general and what people are looking for today. Luxury has to have some dimension, you can’t just produce, produce, produce and think people will pay premium prices for something that is everywhere. Today, what customers want is more about the product than the history of the brand, and so we have to explain the value of our products at every price level.”
We optimists are not saying abandon your past, throw up your arms and do a complete 360 — we are saying it’s time to re-strategize. That rethinking means taking a long hard look at prices (yes, the industry in its healthy days got fat and happy — hiking prices simply because they could), at the values and concerns of today’s end consumers (the true judges of the watch brand products and narratives), at the service and after-service being offered, and at the communications efforts being generated.
In fact, Magada says Zenith has adjusted its prices in the United States market to be more in keeping with the current market in order to stay as competitive as possible as it relates to comparable sales. “You can’t compare lobster to shrimp, even if it is a big shrimp. Do you want a big shrimp or a lobster, because the lobster will always be more expensive. So you have to compare products within the right categories. Today’s consumer is clever enough to make his own decisions based on the facts of the product and the service we give them.”
And Cologni addresses the concept of marketing to today’s customers. He says “I hope this wont be a question of making new from the past, but rather that each choice will be evaluated and considered in the light of healthy consolidation with a cultural vision for the medium and long term. Communication is a case in point: am I right in thinking many Maisons haven’t changed their advertising in a year. Some of the campaigns I’ve seen lack what it takes to give the product the necessary, perhaps even indispensable esteem that will capture the attention of an increasingly cautious customer. And reassure him of the (intrinsic) value and (ethical and aesthetic, hence cultural) value behind the object.”
These factors, ethical, aesthetic and cultural value, are key for today’s generation. Brands that are working hard to not leave behind a carbon footprint via conservation efforts at the Manufacture, or via sponsorships of conservation and wildlife efforts will be the heroes of today. Additionally, brands that are honest in their presentation of products — from both the technical and aesthetic sides — will be met with positivity, as today’s consumers appreciate genuine effort and solid good looks and mechanics.
The added factors that also come into play include, as Cologni says, proper marketing and exceptional service. This service requires a monumental effort on the part of the brands and the retailers. For a complete look at the most recent industry statistics, take a look at Christophe Roulet’s article on the HH Journal.