Signal of the day: looking for the market “sweet spot” at Baselworld

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March 2016

Watch brands will be fielding questions about their price points amidst declining consumer demand. So where is the “sweet spot” for pricing in 2016?

At Baselworld, watch brands will all be faced with questions by us pesky journalists about their price points and how they will deal with decreased demand. That’s because watch exports have taken a hit over the last year or so.

If we break down the recent decline in exports by market segment, we could come up with some answers to help the brand answer those inevitable questions of ours. It can also give us some interesting insights into where the watch industry is heading in 2016.

According to the latest report by the trusty Federation of the Swiss Watch Industry, exports of watches made of gold and other precious metals declined 14% in January alone. In contrast, steel watches fell by 9%, and steel alloy by only 6%. Still a decline, but much less prominent. In other words, the higher up the luxury hierarchy the timepiece is, the less well it’s likely doing on the market.

Signal of the day: looking for the market “sweet spot” at Baselworld

We have similar drops at the extreme low end of the watch market too. Part of that is customers buying into the smartwatch craze and taking sales away from entry level quartz watches. It’s also in that market range that the Swiss have competition from other global giants, like Seiko, Citizen, and Fossil.

But with a growing Chinese middle glass and dropping oil prices, global consumers will be able to enjoy some more discretionary spending...eventually. That’s likely to happen in the upper ranges of the entry level market, and the lower mid-range; somewhere between 500-1,500 Swiss francs. Offerings by brands like Hamilton and Tissot should do well in that regard.

It’s all about finding the sweet spot. Now let’s see what the big players will offer us in that sweet spot price segment at Baselworld.