he coronavirus is driving a change of priorities: the strategies of technological and social “mutation”, which should have taken place over years, are now being implemented in a matter of hours. Political leaders are instantaneously taking decisions that will affect the daily lives of millions of citizens for a long time to come.
As far as the watch industry is concerned – of secondary importance, certainly, compared with essential needs such as food or health – digital has also turned into the “emergency lifeline” of our transformed daily lives. To the point that today we fear that the network capacity may not be able to cope with the traffic.
And it is highly unlikely that what is being done today will be undone tomorrow. Perhaps without realising it, we are experiencing a transformation of the very foundations on which our industry is based. Or rather, an acceleration of that transformation, because in the watch sector the digital revolution entered the fast lane a few years ago – notably with the success of online pre-owned watch sales.
The crisis we are currently experiencing is accelerating the digital side of the omnichannel model, the physical, brick-and-mortar side being already well covered.
The power to adapt
Almost every day, faced with closed shops, we hear about the existence of new initiatives to keep the watch trade alive in spite of everything. For example, the leading manufacturer of watch winders, Wolf, has developed a remote distribution and ordering system specifically designed for quarantined retailers. Patek Philippe has authorised some of its dealers to sell its models online, which was not possible until now. H. Moser & Cie has launched a new own e-commerce site, with prices ranging from CHF 12,900 to CHF 69,000. Omega has extended its e-commerce platform to Europe as well. All eyes are now turning to Rolex…
“In the thick of the crisis, the funding of watchmaking projects on Kickstarter has doubled compared with the first quarter of 2019!”
At the exact opposite end of the celebrity watch brand scale, the new players launching their projects on Kickstarter, an online crowdfunding platform, seems to be resisting the crisis rather well, says consultant Thierry Huron (Mercury Project), who draws up a quarterly index of these start-ups: “It might sound surprising in the current context, but the first quarter of 2020 is clearly positive for these micro-brands. Funding on the platform has doubled compared with the first quarter of 2019!” Confined to their homes all day long, are fans prepared to do more, from a distance, to support this new watch scene?
The players on the pre-owned watch market, such as the platform Chrono24, are probably the most highly “digitalised” companies on the contemporary watch market. In the face of the crisis, that platform has shared its figures (read here): its global weekly figures are 15-20% down compared with the pre-coronavirus period. But that by no means compares with the total shutdown affecting the physical network of outlets. And in view of the stocks of unsold watches mounting up in warehouses and stores, it’s a good bet that these players will emerge stronger from the crisis in the long term.
It is highly unlikely that what is being done today will be undone tomorrow.
A new, confined generation
All the studies being published at the moment certainly need to be regarded with circumspection, because they may be serving specific interests. Nevertheless, the overall picture is one of an acceleration in the digitalisation of the watch industry in general, and of the watch trade in particular. But it would be wrong to consider that the traditional “reticence” of the luxury watch industry with regard to digitalisation is swinging to the opposite extreme – i.e. a new obsession with it – given the resilience shown by this channel today.
Indeed, another interesting recent study is the one conducted by Google and Ipsos on how wealthy customers “consume” luxury products. Two figures in particular emerge which apply more specifically to an industry like luxury watchmaking: 72% of the people questioned about the emerging markets (or the “new markets”, on which growth depends) do research online and offline before going to a shop, while 65% said they preferred trying out a luxury product first-hand before buying.
Will consumers be seized by desire to “get physical”, or will they have made a virtue of frugality in this period of crisis?
In reality, there’s nothing new in that. The “omnichannel” model seems absolutely tailor-made for the watch industry, which reposes on a long tradition, specific know-how, and engineering and design that demand to be seen (in order not to be disappointed, or to strengthen one’s convictions). The crisis we are currently going through will no doubt accelerate the digital side of this model, the physical, brick-and-mortar side of which is already well covered.
It is now up to the brands to ensure that this model is implemented as fluidly as possible in order to win over, when this crisis ends, a new, confined generation whose scale of values will have changed but in unknown ways. Will consumers be seized by a consumer frenzy and a desire to “get physical”, or will they have made a virtue of frugality and moderation in this period of crisis?