t is worth noting that the middle range and the upper middle range markets are currently undergoing a major change. Specifically, the Grand Seiko range of watches by Seiko is beginning to occupy a large position in this segment – where Rolex and Omega traditionally had an overwhelming position.
But as these two giants are reducing their number of stores and asking them to have more inventory, a growing number of specialised watch retailers (and not only department stores) are interested in a partnership with Grand Seiko. Seiko executives may not admit it, but their breakthrough is linked to Rolex and Omega’s strategies. The brand has also convinced the market of its products’ advantages for more than ten years now, another important factor in earning the trust of conservative consumers.
Indeed, as a feature of the Japanese market, many luxury watches are sold in department stores, like in the United States. On the other hand, watch specialty shops have shown lots of efforts, refining their knowledge and presence, in order to establish a unique and strong position on the market. Highly trained store staff are generally trusted by watch connoisseurs and their advice has an even stronger influence on purchasing than websites and magazines.
Breitling Japan is the best example: the brand has continued to educate store staff carefully, so that their loyalty is now extremely high. Well-trained Breitling sales personnel are one of the reasons that the Japanese market is always second or third to the brand in terms of sales volume.
Another likely reason for specialty stores’ strength is the existence of “interest-free loans”. The biggest factor in constant sales is long-term interest-free loans of up to 60 times or now 120 times.
Well trained staffs and “no interest loans” never stimulate enthusiasts if the watch itself is not attractive.
However, well trained personnel and “interest- free loans” never stimulate enthusiasts if the watch itself is not attractive. In 2016, the Japanese market recorded the world’s best sales of Zenith, but the driving force is not lifestyle marketing but the legendary “El Primero” movement.
Currently, many watchmakers like Jaeger- LeCoultre, Zenith and IWC are focusing on lifestyle marketing. In a mature market like Japan, there may be little possibility of success. Japanese consumers are relatively knowledgeable and it is necessary that watchmakers show clearly what they do better than competitors, especially towards customers that can buy middle range watches. This is not a feature unique to the Japanese market, but more and more to the whole of Asia. Education is still the key to conquer Japan and the Asian markets!
“Middle range” means different things in different contexts. For the
Seiko brand, we think of middle range as being from around 500 to
2,000 euros, where our best mainstream collections are priced. It is
in this area that we see consumers today seeking out exceptional
watches that offer affordable luxury and unique functions. It is the
biggest growth area of the market.
From the media and from much of our industry’s communication, it can sometimes seem that the only good watches are very expensive. At Seiko, we profoundly disagree with this misconception. We are proud to offer watches at every price point that offer great functionality and give lasting pleasure to the buyer. We always remember that, for the vast majority of people, 500 euros is a large amount of money to spend on a watch and that, for the person who pays this amount for one of our products, such an amount could be a much more important investment than 10,000 euros might be to a very wealthy person.
The watch buying public is very smart and well informed. If any brand tries to gives itself an image that is not supported by the quality of its watches, the public will not accept it for long. Seiko believes that true quality will always win in the end and that true prestige and a superior image can only be earned by the quality of the product offered.
Economic cycles of course affect our business, but we do not see a crisis in the attitudes of watch lovers in Western markets. We see that watch buyers are smarter than ever and that they seek greater tangible value in the watches they buy. Realism has always governed the way that we communicate with our customers, so we see no reason to change the way we design our collections or talk to our customers. Perhaps the trust that Seiko has earned over many decades is helpful in these nervous times.
The vast majority of our sales have always been of steel watches and, if we offer watches in precious metals, they are usually part of limited editions. We have no need to change our approach Contrary to Swiss export statistics, we see only growth in the sales of our highest end watches, like Grand Seiko. Our relations with retailers are indeed evolving, but only in the sense that they see that Grand Seiko is a watch that offers remarkable value, undisputed quality and that has a very bright future. More and more of the top retailers in Western markets are showing interest in the brand and we are very pleased to see this trend develop.
The connected watch is the most important development in our industry in decades. It is still too early to assess its exact impact, but we are certain that many consumers will buy them and will like them. The connected watch is here to stay. Seiko believes that all its watches should be long-lasting, fully autonomous watches that deliver real-world benefits that consumers really need and perhaps the global success of Astron is a sign that the consumer agrees with us. We have the technological resources to make a connected watch and, if we decide to do so, it will fit with the high standards that our public demands.”
Illustration: San Li Tun ©Drawing Architecture Studio | www.d-a-s.cn