Germany's watch and jewellery retailers have enormous economic problems. As a result jewellers stagger into bankruptcy and shopkeepers look to the future anxiously. Even stores that have existed for generations and are doing well are being sold because the owner's children do not want to take the high economic risks, nor live a relatively inconvenient life behind a counter.

We all know that over the past years, and particularly heightened during the last months of 2001, economic changes have taken place. The watch industry, especially the haut de gamme luxury watch brands, had to face up to the fact that the poor economic situation in many countries also affected people who were supposed to be seriously rich. They may still be rich, but at least nowadays they do not spend on luxury watches in the same manner as they did in the past.

Some weeks ago, I had the opportunity to listen to a discussion on this matter between bankers, retailers, people from the watch industry and scientists. The participants not only exchanged views on the pure economic issues, but also on trends and developments in Germany's society.

One phenomenon we face in Germany is the 'neue Bescheidenheit' (new modesty). This means that consumers, including the extravagant rich, stopped going to expensive restaurants, kept their BMWs or Audis longer than in the past and went shopping in low budget supermarkets. A recent headline in an advertisement for one of the biggest computer and stereo equipment retail chains reads 'Geiz ist geil' which means 'stinginess is terrific.'

“Just two years ago, the social climbers of the 'New Economy' made up their mind quickly whilst buying a watch,” stated a retailer. “The price of a timepiece was only secondary then. It was sufficient that the watch was an expensive brand such as Rolex or Jaeger-LeCoultre.”

But business people do not only see changing economic conditions, they also see time being used differently. Another participant in the discussion, a banker, said that he realized there was a kind of “cooling down” in business people's behaviour. “The mad rush is not as predominant as it has been over the past two or three years. People now act more calmly.” To him this was already a luxury in itself, he explained.

Do we still need high quality watches? What is the right 'look' for customers? What is the retailer's argument now that people refuse to spend money quite so easily? These questions were focused upon more and more during the discussion.

A trend researcher commented that he believes the sense of time is changing. Nowadays, in the epoch of mobile phones and laptops with internet access, it was no longer a catastrophe if your flight was an hour late or your train had to stop unexpectedly. In situ-ations like these, today one is able to communicate. Therefore punctuality, such as getting to a business appointment on time has became less important, argued the scientist. The essence of a wristwatch, according to his theory, is therefore changing into a 'beloved product' something that has a long working life, whilst its function as a simple timekeeper takes a backseat.

Experienced watch retailers, however, especially those trading in high value products, will not need knowledge of this type of theory. They know that there are at least two sorts of customers: those who buy an expensive watch because of its brand name, as an object of prestige, and are not interested in the movement or the details of the product's quality; and those customers who decide to buy a good watch as an object of value – not necessarily recognizable as such – but who ask technical questions, want to know the details on how the watch was manufactured and what technical functions it has.

For these people a timepiece is a part of their way of life, a part of their culture and tradition. They are the target group for advertisements like 'you never actually own your Patek Philippe.' Of course, these people are sophisticated and expect and demand first class service for their first class product.

“I believe that it is important for us to keep an eye on moderately rising prices,” said a luxury watch manufacturer. “It is important that the brand has its own charisma, which has to be maintained and protected not only for two or three years, but for the long term - maybe for generations.”