The Swiss watch industry is not known to move quickly. Until just very recently, if you wanted to buy a high-end watch from a brand like an Omega or Panerai, your best bet was to hightail it to a city like New York or Miami and pop into an authorized retailer or a brand-owned boutique. There, a gentleman in a suit would give you an espresso and let you try on watches while you sat on a button-back couch. Meanwhile, your family and friends were buying clothes, appliances, mattresses and even food from the comfort of their sofa, possibly while pantsless or drunk, and getting it all a couple of days later. Sometimes a couple of hours later. So in 2018, it seems weird to consider online purchases a novelty in almost any industry, yet here were are in a burgeoning new era in watches.
Previously you could buy a high-end watch online, but it required going through Amazon or unauthorized gray market sellers (say bye-bye to your warranty). Last year, though, IWC, Jaeger-LeCoultre, Panerai and Omega all debuted new e-commerce elements to their website. They are but a few watch brands to embrace the world’s shift to online shopping and sell their products directly to consumers online. Other brands have partnered with online shops like Mr. Porter to sling their wares on the web, but they are an exception, not the rule. Richemont group, the watch conglomerate that owns all but one of the aforementioned brands (Omega), even acquired 90 percent of Yoox Net-a-Porter — the luxury conglomerate that owns Mr. Porter — earlier this year.
According to a 2017 survey of Swiss watch executives by Deloitte, 55 percent of them considered developing e-commerce and digital channels a “major priority” and second only to introducing new products. That same study also asked what sales channel would be given the most emphasis in the next 12 months. A whopping 67% said it would be brand-specific e-boutiques. The year prior only around 24% gave that same answer. So why all of a sudden the interest?
Well, it’s likely not a coincidence that 2016 was a particularly bad year for watch sales, which saw a near 10 percent decrease in exports from Switzerland. Finding new clientele is important, and physical brick-and-mortar boutiques are limiting, especially given their concentration in large cities like New York, LA and Miami. E-Commerce simply allows watchmakers to cast a wider net. “In countries such as China and the USA, which are geographically very big, some customers don’t always live near a boutique, so brands can be limited by the number of people they reach,” says Omega CEO Raynald Aeschlimann.
One of the ways to find new buyers is to look capture a younger generation. According to a report by Bain & Company, Gen Y and Z are helping to increase sales in personal luxury goods and the number of luxury goods sold online. Aeschlimann seems to agree that the growing number of younger watch buyers are fueling e-commerce efforts. “It’s definitely a part of it,” he says. “They are the emerging generation of watch buyers. But more than that, their habits and technologies are changing almost all aspects of life.” He clarifies, though, that it’s not all about young buyers: “People of all ages are connected to their phones and the internet at all times. E-commerce is something that I know will reach everyone.”
When asked why it took so long for e-commerce to make its debut for the brand, Aeschlimann notes the obvious that it’s a large monetary investment. But more so, he emphasizes that watches just aren’t like most other products you can buy online, and individuals may not be as gung-ho to purchase them without seeing them in person. “Watches are a very emotional product, requiring careful thought and consideration. It’s not like buying a pair of shoes … the investment is much bigger, and a watch will stay with you for many years,” he says. “The boutiques have always provided that space to make a wise decision,” he says.
So maybe smartphones won’t replace boutiques, after all. “E-commerce doesn’t have to work on its own,” Aeschlimann says. “If you’re looking for a watch, but there’s some anxiety, I still encourage a boutique visit. You can try different models on and then make a decision later if you want, making the final purchase online. We’ve not narrowed the buying options. We’ve made them greater.”
How Watchmakers Are Embracing Affordability
At this year’s SIHH, watchmakers embraced the idea of entry-level luxury, offering high-end movements and finishing at more accessible prices than before. Read the Story