With the SIHH 2019 just around the corner, Brian Duffy, CEO of Watches of Switzerland, one of the fastest growing and world largest luxury watches retailer (mainly in the UK and in the USA) gives his assessment of a market that is moving with the times.
What will be the main trends in the Haute Horlogerie market in 2019?
Brian Duffy: They will be a continuation of the very evident trends seen in recent years. For instance, the U.S. market has seen double-digit growth since December 2017 and we expect strong growth to continue there. Although I’m not directly involved, continental European markets also seem to be doing well. The main concern is the stand-off between China and the U.S., as Chinese consumers are the biggest single buyers of luxury goods. A slowdown would directly impact Asian markets like Hong Kong, but fewer Chinese tourists would also have an impact on London, Paris, Madrid and Milan. In terms of product, the market is led by a customer preference for a sporty look and functionality – in the form of diving, pilot and chronograph watches – at the expense of the classic look.
What are the latest trends in terms of style, color and size?
Black is the most popular dial color, but blue is the fastest growing as it complements a blue blazer, as well as any gold item, and men are increasingly seeing watches from an accessorizing standpoint. For women, there is a trend for buying men’s watches. In fact, 36mm watches are often classified as men’s, but most are actually bought by women. So I think there is a convergence of gender when it comes to product appeal. In my view, the industry should reconsider classifying watches according to gender because I don’t think it’s helpful or in line with contemporary thinking. You have a lot more women looking for the same things in watches that men do – bigger size, functionality, and mechanical rather than quartz movement – and I think the industry should respond more positively to that. Men are also buying more ornate watches, so the convergence is coming from both directions. Equality, in every sense, is a very important topic today and we see that in watch buying. Another trend is for mixed materials, with an increase in bi-color, steel and gold, and rubber straps with either steel or gold cases.
How can Luxury watchmakers create excitement among consumers?
You need product innovation and complementary marketing, and a watch that is on-trend. In terms of marketing, digital platforms are clearly the most important, so you need digital advertising to be supported by great content that catches consumers’ attention. We are dealing with a more informed audience today and they are considering everything – the product, the price point, the associations, and the lifestyle. Ideas around philanthropy, the environment, and nature all have very positive associations for these consumers. The challenge is to make all that relevant to the watch. Ulysse Nardin’s partnership with underwater photographer Fred Buyle is a very good example of that – as it shows interest in the environment, creative activities like diving, it’s modern, and it’s cool. The ‘#FreakMeOut’ shark campaign for Freak Vision is also very creative, eye-catching and impactful.
How else is marketing adapting to the new generation of luxury watch consumers?
I think that brands might want to reconsider the traditional celebrity endorsement, as getting the most famous person on the planet to endorse your watch is not as effective as it once was. This generation is very well informed – through the internet – and they want a credible authority. It’s not just fame; they are looking for substance and a different type of celebrity. Clearly, social media has a major role to play too for these consumers. Instagram is very influential in watches, Facebook still offers the biggest coverage in the world, and the other main platforms should be part of any campaign. Working with social media influencers is also very important. Meanwhile, we believe in e-commerce, even though it represents only 4% of our UK luxury watch sales. It works as multi-channel retail, as most people who visit our stores have done their research on our website.
What prospects do you see for Ulysse Nardin and Girard-Perregaux?
Ulysse Nardin is a great brand with great potential. It’s definitely known for being innovative in terms of products and I’m very encouraged by both the direction it’s taking and the way it’s supported by creative marketing (see also Focus article) In terms of standing out and responding to today’s trends, I think there’s a very good opportunity there. Girard-Perregaux is a wonderful, classic brand and with the right product and marketing support, it has an opportunity to grow. We have the brand at our new store in SoHo, New York and it certainly has created a lot of interest. They’ve both got potential.
Finally, what are your thoughts on SIHH 2019?
We expected it to be very commercial, with some great new products that respect their brand DNA, that are supported by relevant marketing, and that are positioned at the right price point – and it was indeed. Another trend in recent years is the much greater importance of new products. Watches introduced at the previous year’s SIHH or Baselworld now represent an ever-bigger proportion of total sales.