retail-world



DISTRIBUTION - Future in motion, in-store versus online sales?

September 2015


In-store versus online sales: some thoughts on the future of retailing.

The future in motion.” This was the theme of the most recent Haute Horlogerie Forum, which took place in Geneva in November 2015. The title neatly encapsulates some of the paradoxical issues the world of Haute Horlogerie is currently grappling with as it asks itself some hard questions about the future. Perhaps Haute Horlogerie would feel more comfortable if the future would stand still... But the future is, by definition, time in motion, the forever unattainable tomorrow. There can be no future – no concept of time at all – without movement.
Nevertheless, the marketing materials of the great majority of Haute Horlogerie brands tend to talk up the past, vaunting their stylistic heritage, dwelling on the concepts of tradition and continuity, emphasising the timelessness of their products. Vacheron Constantin, for instance, has brought the word ‘Eternity’ back into its advertising vocabulary: the mechanical watch is, apparently, everlasting! And no amount of ‘future in motion’ is going to change that.
Faced with the innovations of the digital world, whose limits are as yet unguessed-at (we often hear the question “where will it end?”), Haute Horlogerie is seeking to reassure and be reassured. This headlong rush forward is an irrelevance, it seems to say, voluntarily adopting the role of ‘eternal’ beacon, like some unassailable lighthouse blinking stoically out onto the ‘future in motion’.
And yet there is nevertheless some substance to this position, and it has to do with the fundamental incongruity of the mechanical watch, whose technology has been completely superseded in terms of its primary function: to keep accurate time. This technical obsolescence, now an incontrovertible historical fact, is paradoxically reassuring, as it places the mechanical timepiece outside time. It stands in contrast to the programmed obsolescence of digital technology, which continues to evolve generation after generation. Just as a bicycle can always be ridden, a mechanical watch will always work, no matter what (at least in theory); a watch, like a bicycle, is completely autonomous, needing no external source to function, apart from some pressure on the pedals, or a few twists of the crown. This ‘historical obsolescence’ thus protects it, and offers us comfort, like a fire in the hearth. In a changing world, one thing remains constant: the mechanical watch. It can continue to be improved, but it will not change.

THE ‘BUYER EXPERIENCE’ SHAKEDOWN

These are the premises on which Haute Horlogerie is beginning to question what relationship it should have with the digital world. Clearly, in terms of research, design, production and marketing, watchmaking is already fully digital. But because of the ‘obsolete’ peculiarities and high pricing of mechanical watches, which make them an exceptionally valuable commodity, watch sales have always been handled extra carefully – a process the experts would call a ‘rich buyer experience’, invested with a human touch that makes it particularly special. The buying experience is conducted face-to-face in a carefully chosen and tastefully decorated setting, with a hand-picked company representative who is invariably friendly, attentive, approachable and an expert.
But the digital world, which offers the possibility of hosting this ‘experience’ online, in a virtual format, calls this model into question. And this is one reason behind the extreme reluctance of the luxury brands to embrace this new universe which, by definition, challenges their most deeply-held assumptions and risks undermining that special connection with their clientele, which is one of their most sacred tenets. Despite this understandable reticence with respect to online sales, however, the big luxury brands have nevertheless made calculated forays into the continually expanding online universe, largely restricting themselves to developing their communication, optimising their web presence and venturing into the social media that today dominate online exchanges. The result has been a complete transformation of the global public perception of luxury, exception and rarity. The virtual world has democratised luxury. The intimidating barrier represented by the door of the boutique has been symbolically broken down, thus enabling the world and his wife to enter, virtually. “A feast for the eyes.”

ATTEMPTS AT HYBRIDISATION

Some have taken the experience further, with a view to eventually eliminating the distinction between offline and online. One such is Burberry, whose former boss Angela Ahrendts coined the phrase: “Walking through our doors is just like walking into our web site.” By attempting to create a continuity of experience from the virtual to the real, the British brand was one of the first to try to eliminate the distinction between physical experience and virtual experience, by using a proxy or avatar. Has it succeeded? The financial results are inconclusive, but the experiment nevertheless earned Angela Ahrendts a job offer from Apple, where she is now head of its retail division, no less.
Comparisons don’t tell the whole story, however. A trench coat, no matter how ‘designer’, or an Apple watch, even fitted with a gold case, culturally have little in common with a grand complication made by a centuries-old Swiss manufacture. These products might be very costly, but they are hardly rare. Haute Horlogerie, by contrast, is the embodiment of rarity and exclusivity. Is it possible to reconcile these qualities with online sales? Is it even necessary to make these objects accessible through all channels, whether real or virtual? In the short term, maybe. In the long term, maybe not. While immediate international accessibility may help to ease short-term cash-flow, its long-term consequences are almost certain to be detrimental and impoverishing. Faced with the object of his desire the client, collector, aficionado, whatever you want to call him, is like a child waiting for Christmas. Yes, he is half mad with impatience, but the frustration of the wait is an intrinsic part of the pleasure, and contributes to the experience. It’s a bit like love: if something is worth having it’s worth waiting for. Instant gratification is anathema to the concept of rarity, but in online sales, it’s the whole point. The object is available immediately and, ideally, dispatched the moment it is ordered. This is the ‘Amazonian’ logic of instant delivery, carried out by drone if necessary.
‘Disenchantment with individual sales experience,’ is a phenomenon we are hearing more about. For Millennials, who were raised on remote controls, joysticks, tablets and mobile phones rather than rattles and teething rings, who came of age in the ‘cloud’ of total accessibility, would having a grand complication delivered by drone direct from a faraway Swiss valley be an ‘enchanting experience’? Who can say. The client would previously have sent the venerable manufacture a scan of his wrist, which would then have been 3D printed to ensure that the bespoke timepiece was a perfect fit. The delivery drone would arrive at precisely the scheduled hour and place, to offload its precious cargo before an audience of family and friends, invited to celebrate the arrival. The following day, a representative of the brand would ring at the door to provide a hands-on initiation into the arcane rituals of owning a new watch.

BACK INTO THE CAVE

In fact, it’s a fairly safe bet that matters will go the way they usually do in our human societies. As the gap between rich and poor widens, the tools of social differentiation will become increasingly sophisticated, and will employ all available means, both real and virtual. The clientele of Haute Horlogerie are not technological ignoramuses; they are highly computer-literate, often early adopters of digital innovations, and they enjoy all the latest tech toys. There is no guarantee that they will continue to favour the physical shop over virtual browsing. And in any case, the ‘future in motion’ of the digital world is on course for a complete merging of genres, real and virtual becoming the two inseparable faces of a single reality. A worrying scenario? In his allegory, Plato described a group of people who were chained to the wall of a cave and forced to watch the shadows thrown from a fire behind them, believing this projection to be reality. Mankind has tried to leave the cave and look reality in the face, but the digital flames appear to be slowly but surely tempting us back.
Sales strategy aside, when it comes to choosing between the physical and the virtual, there is no middle ground. Perhaps it is already too late. The future is in motion, forever out of reach.

Source: Europa Star September 2015 Magazine Issue