time-business


Not enough masks, too many watches

CORONAVIRUS CHRONICLE

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March 2020


Not enough masks, too many watches

The world is short of masks, but brimming over with watches. Stocks are overflowing. When business takes up again, the idea that it will be business as usual is illusory. Not only will these stocks have to be sold, a radical rethink will be required. Together.

W

atches – the retailers’ drawers and safes are full to bursting with them. In China, they had just been stuffed even fuller in anticipation of the Chinese New Year and record sales when everybody had to lock up – and lock down.

At the same time, many miles away, the manufactures were running at full speed to finalise and start production of the new products that were to be presented and launched at the two grand watchmaking fairs of Geneva and Basel, this year scheduled for the end of April. A late date, certainly, but which had the advantage of reducing the well-known and strategically important time-to-market.

For most people, confinement is an experience of time quite different from anything they had previously known.

To use a liquid metaphor, imagine a spring that continues to flow into a fountain that is already overflowing. To prevent the water spilling everywhere and being wasted, you have to start by shutting down the pumps at the spring.

This is exactly what is happening today.

Since the coronavirus did not remain in China but migrated right into the very valleys where watches are made, the manufactures have been forced to turn off the taps – which they would have had to do anyway, even if the coronavirus had stopped at China’s borders. But now it is knocking at their own door. The entire horological supply chain, at a standstill, is submerged from the tap to the fountain.

A CHANGE OF PARADIGM

We are not going to blind you with figures at this point. It is true that China saw its watch imports drop 51.05% in February (according to the Federation of the Swiss Watch Industry), and while some people are reassuring themselves that “the doors are already opening again”, or, like Nick Hayek as recently as 19 March, that “once the crisis is past we can start up again without any problem and attack the market”, all the other fountains and water tanks are now overflowing as well: Europe, today California, soon New York, tomorrow the rest of the world – and so it will go on until the pandemic dies down. How long will that take? No one knows.

But above all, this pandemic crisis comes on the back of another crisis, possibly a complete reassessment. “Attacking the market”, as Nick Hayek puts it, is certainly going to demand different arms and ammunition than usual.

Indeed, the predominating watchmaking model of the past decade was already struggling well before the coronavirus came on the scene. Before the viral wave began to unfurl, the Swiss watch industry had already gone gleefully upmarket, taking refuge in the lofty havens of the luxury segment. In so doing, it was simply following the lead of the prevailing economic models, continuously gouging out a deeper gap between the 1% and the rest (in 2018, Switzerland exported fewer than 24 million watches compared with 860 million in the case of China and Hong Kong, but its turnover rose from 8.4 to 19.9 billion francs in 10 years. For the historian Pierre-Yves Donzé, the period 1998-2018 saw the birth of “big watchmaking business”).

The post-coronavirus question is not so much how to sell stocks, but rather: what kind of demand might emerge in the wake of this sanitary, economic, social and societal catastrophe?

But curiously enough, those supposedly safe havens were the first to be hit. And Swiss watchmaking will, without a doubt, not only have to manage its stocks, redesign its flows, reconfigure its logistics and readjust its production lines; at a deeper level, it is going to have to review its business model. Undergo a change of paradigm.

WHAT KIND OF WATCH INDUSTRY FOR A POST-CORONAVIRUS WORLD?

The question facing the Swiss watch industry as to what happens post-coronavirus is not so much how to sell stocks in order to stock up again immediately with products designed pre-crisis, but rather: what kind of demand might emerge in the wake of this sanitary, economic, social and societal catastrophe?

Whatever happens, the pandemic will have changed people’s perspectives (for the better, one hopes; but perhaps, in certain places, for the worse). In other words, will it give birth to new forms of outreach, solidarity, a sharing in a common destiny? Or will it, on the contrary, exacerbate tensions and raise new borders?

We do not pretend to be able to answer this question, but in our view one thing is certain: the future lies not in excess, but in moderation. It is not about brinkmanship, but meaningfulness. The post-coronavirus customers will no longer be the same. Their aspirations will have changed without a doubt. In what way remains to be seen.

But already, for one simple and obvious reason: most of them will have experienced confinement –an experience of time quite different from anything they had previously known. They will have gone through something together. And if just one virtue were to be found in this pandemic, it is its democratic aspect. It does not choose. It blindly affects both the powerful and the unknowns. Watchmaking will come through it as long as it reaches out and speaks to everyone.

The post-coronavirus customers will no longer be the same. Their aspirations will have changed. In what way remains to be seen.

All the photos of submarine sculptures are the work of Jason deCaires Taylor, an English sculptor and photographer born in 1974. Over the past ten years, he has created several underwater museums and parks in Grenada, at Cancun, Lanzarote and various other places. To find out more about this magnificent work, go to www.underwatersculpture.com

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