As publishers of the WorldWatchReport™ for the last eight years, DLG has been watching (forgive the pun) and analysing the rises and falls of the luxury watch industry across numerous countries. Although for the first time this year China has surpassed the United States as the country exhibiting the highest demand for luxury watches, the US, a large, diverse, and mature market, continues to represent an incredibly important opportunity for luxury watch sales. Understanding the American mentality to luxury (and luxury watches, specifically) is crucial to watch marketers. By analysing the details of the interest Americans express for luxury watches, we can learn a great deal about their preferences for specific brands, models, or styles as well as see their sensitivity to price point and other crucial buying factors.
While a lot has changed over the past years, other things remain constant. Rolex continues its dominance as the luxury watch brand with most online interest. Of the 40 brands tracked in the US, Rolex captures just over a quarter of all brand-related searches. It nearly doubles its category challenger Omega, which comes in 2nd place with 13 per cent of brand search volume. Compared to 2011, both of these brands have seen an increase in market share percentage. William Rohr, a long time collector and pillar of watch forum Time Zone, says of this finding, “It is much easier in a slow market for the strongest to get stronger. Rolex was able to push its advertising and did not pull back. Furthermore the brand reputation has a ‘halo’ effect; it is considered a ‘safer’ purchase than a lesser known brand.”
A large market like the United States has a large volume of online searches related to luxury watches and it’s by grouping these individual searches into certain intentions that we are able to better understand exactly what about luxury watches has Americans looking for more information. Brand-name-only searches represent just under two-thirds of total searches and specific model name searches represent about 17 per cent of total. The remaining intention categories may not represent a large slice of the total, but when considering the large total volume of online demand from a large market like the US, these numbers become more significant. Searches including replica-type words come in first among these smaller categories, at 2.83 per cent of the total. This significantly differs from other markets as well as the global results, in which price tends to be the top category, while replica-type searches only appear midway through the list. Globally, replica searches represent 1.85 per cent.
They say that imitation is the best form of flattery but I’m not sure that the sages who came up with this expression had the luxury goods business in mind. If we look at the brands most often associated with replica searches it’s perhaps no surprise to see Rolex and the top. This amplification is a consequence of its long-held status as the top brand. While not as stark as Rolex’s share of replica-based searches, Breitling’s 2nd place ranking here could be considered even more worrisome news. Not only does its 9.43 per cent share of the searches here surpass its general market share, but it also surpasses its general market share ranking, in which it ranked 4th. This disproportionate share of replica searches is much more unique to this market than Rolex’s, which is near consistent throughout markets of this study.
Another interesting insight on the US market is the importance of mobile marketing. Over one in five online searches globally concerning the luxury watch industry occurs from a mobile device such as an iPhone, BlackBerry, or iPad. This statistic is even larger when looking at just the US market, making it clear that this country is prime ground for mobile-friendly websites and mobile marketing initiatives. Those brands that do not cater to this segment in the coming years will be demonstrating a clear lack of understanding of the opportunities and challenges that are presented by digital communications in general.
For further insights on the US market, or any other for that matter, the WorldWatchReport™ offers a wealth of information. More details are available at: http://www.worldwatchreport.com.
This article appeared as part of a Market Focus on North America in the August - September 2012 issue of Europa Star. See below for links to other articles in this Market Focus: