Charting a course between preserving tradition and driving technological renewal, innovation in haute horlogerie, or luxury watchmaking, is a precision exercise. Albert Bensoussan, CEO of Kering’s ‘Luxury – Watches & Jewelry’ Division, explains the Group’s strategy to pick up the pace of innovation in a rapidly evolving sector.
When you were appointed to lead Kering’s ‘Luxury – Watches & Jewelry’ Division in April 2014, what did you identify as the big challenges in the world of haute horlogerie?
There were five main issues. First, we needed to help Kering’s watch Manufactures, all of which are independent entities, to work together, while also preserving each one’s individual identity. Next, we needed to review the collections to make them clearer. Third, we had to take on board the changes that digital has brought to brand communication approaches. A great website and social media presence are no longer sufficient if customers get information primarily through their phones. This meant we needed to build overall consistency across all media, notably by stepping up our digital investments, which we did by a factor of five over four years. At the same time, we had to ensure that there were no discrepancies between these new digital practices and the traditional craftsmanship that lies at the heart of our businesses. Finally, new anti-corruption laws introduced in China in 2014 posed a major commercial challenge for our sector, causing the artificial “political gifts” market to collapse, slowing exports and forcing watchmakers to reposition their offerings.
You touch on the challenge of running a business rooted in traditional craftsmanship while catering to the new demands of increasingly connected consumers. How is digital technology affecting innovation in haute horlogerie?
Digital is creating a generational break. To be able to talk to the customers of tomorrow, the famous millennials who connect to the world exclusively through their phones, we need a new model. We feel it is vital to have a good command of these new practices within the Group, so that is something that we prioritize in our hiring.
Digital is also a powerful tool when it comes to improving operational efficiency. We have cut time-to-market by taking our production cycle digital. By shifting to an Industry 4.0 model, we are making processes smoother and reducing idle time.
Could you say a little about the specific features of innovation in luxury watchmaking?
In our industry, new materials can drive innovation by substantially raising product performances. They enable us to improve resistance and durability – as Ulysse Nardin did by incorporating silicium in its watches – and to integrate new properties by opening up fresh possibilities. Internally developed materials also allow us to operate more independently of subcontractors and give us greater control of the design process over time.
What is your view on the arrival of the smartwatch?
In the last three years, the sector has faced a potential revolution with the arrival of the smartwatch. Apple, a brand with no track record in watchmaking, presented the market with a product offering unprecedented transmission/reception functionalities. Some feared that the sector might be disrupted, but the smartwatch has not sounded the death knell for classic watchmaking. The Apple Watch is mainly used for its health and sport functions, which do not compete with the status provided by a luxury watch. Unlike traditional horlogerie, the Apple Watch was positioned from the outset as a product intended for immediate consumption and has a nine-month lifecycle, just like a smartphone. For that reason, I do not see smartwatches as being in direct competition with conventional watches: we live in a time where people can own multiple watches, with each one catering to a specific use.
How is innovation organized and led within the Watches and Jewelry division?
We’ve set up a joint industrial committee for the brands, but each brand remains independent in terms of its R&D. The committee disseminates our culture of innovation within a shared process of emulation. François-Henri Pinault believes firmly in testing and circulating new ideas while respecting the identity of our individual brands. We really like the proof of concept approach, which involves coming up with an idea and testing it on a small scale before deploying it more extensively if it works.
What are your upcoming operational R&D projects?
We’re working on a shared innovation center for the jewelry brands, which will comprise an in-house lab, contributions from R&D departments and external collaborations. Our plan is to take a multi-stage approach that will speed up the pace of innovation of our Manufactures.
How are sustainable development issues affecting innovation?
The scarcity of some raw materials is forcing us to rethink our processes to make them more sustainable. In some cases, we already have the solution, such as discontinuing the use of nickel in solid gold products. In other instances, we still have to find them. For example, we’re working on substitutes for arsenic, which is still used in tiny doses in some production techniques, such as “grand feu” enameling. We’re exploring multiple lines of research as we seek to obtain the same characteristics without arsenic. As part of this, we are funding doctoral research, advanced in-house research and external testing. There is more than one way forward when it comes to innovating.
How do you see innovation in Haute Horlogerie over the next five years?
Product differentiation in terms of design – a trend we’re seeing in fashion today – is going to be a key area. To be successful, brands need to have crystal clear and consistent creative positions, irrespective of how they express themselves. Accordingly, brand communication approaches will be a crucial growth driver. Another aspect that is becoming critically important is consumer demand for transparency, particularly on environmental questions. We must be able to ensure that all of our materials are traceable. Last but not least, luxury brands need to go further in digitalizing the client experience, an area that is still in its infancy. 3D and use of client data will mean that personalized experiences become widespread. Brands can also expect to face ethical issues, such as how to communicate with clients effectively and unobtrusively.
The last word?
Test and learn! This idea does not come naturally to established luxury firms, which have built their businesses on the search for perfection at every level. We’ve got to learn to try things out, make mistakes, and unleash our creativity.
Photo credit : Benoît Peverelli