By 2018, the way you buy your watch could be very different. In the concluding part of our report, we look at the brands and retailers disrupting the traditional habits
By Chris Hall
Research by Caitlin McDonald
If watch brands are going to really reap the rewards from opening up online storefronts, it will be by recognising it as a totally separate market, with different patterns of consumer behaviour and a whole raft of unique opportunities. Mastering the customer service and logistics is one thing, and not all brands are totally there yet – our directory highlights the brands that offer free and speedy delivery, provide reams of information alongside the products and present the products in a clean, clear, sophisticated manner – but that should only be the start.
We are already seeing the first signs that some brands plan to treat their online stores differently, and as more brands open their own e-boutiques, the pressure of competition will encourage similar initiatives elsewhere. For example, by opening its e-boutique with a completely new range of watches, Eterna has shown a deft recognition of what it takes to draw attention. The La Granges 1865 range, above, is a family of big-date automatics, each reference limited to 100 pieces, with the usual range of dial colours and strap options.
“Millennials are looking for more of an individual experience… habits and traditions have definitely changed” – Alain Zimmerman, Baume & Mercier CEO
True, it could be a more exciting family of watches, but the principle is sound – something exclusive that rewards early adopters. It also treads a clever line between controlling sales in-house and not riling the brand’s existing network of retailers, online and off. Chairman Robert Dreyfuss sees it as a testbed that can work in both directions; gauging the reaction to a new line of watches that could later appear in high street stores, and dipping a toe in the online market.
Swatch is another brand that is toying with the idea of online exclusive pieces, telling QP that it already reaches an audience online that doesn’t visit its stores, something worth recognising with a bespoke offering. We already see exclusive boutique-only watches at all levels of the industry, so why not an e-boutique exclusive?
And just recently, Ball Watch Company has quietly begun a policy of offering extended discounts online for early buyers. Last year, it announced a pair of pilot’s watches (including the brand’s first bronze-cased model) which, if you ordered online before 31st December, were subject to a 45 per cent discount. At the time it seemed an incredible offer, and now it seems like it will become common practice for the brand: in January, the Engineer Master II Voyager was launched, again with a 45 per cent knock-down pre-order price lasting a whole month. This may make Ball the first brand to indirectly address the question of how a brand can compete with discount-happy retailers (online or on the high street).
In speaking to the CEOs of dozens of watch brands for this report, one line rang out again and again: the purpose of mastering online sales was crucial to engaging with a younger audience. Many pointed out that it’s vital to be open for business at all hours; as Eterna’s Robert Dreyfuss put it, “Invariably their goal is to browse and shop at times when traditional stores may be closed.”
Baume & Mercier’s CEO Alain Zimmermann – a man whose brand is more closely linked with life’s early milestones than most, if its marketing campaigns are to be believed – spoke of the need to cater to the millennial generation immediately: “Customer expectations in terms of luxury are constantly changing. Millennials have a different approach to generation-Xers and the generation that came before. They are looking for more of an individual experience, with greater authenticity… they are much more comfortable online which indicates that habits and traditions have certainly changed.”
“It’s remarkable how few luxury sites understand the need for multiple journeys through your online store” – Mike France, Christopher Ward CEO
But it’s not just young people who behave differently online. Brands with more time under their belts in e-commerce already point to distinct differences between the purchasing habits in store and online; for example, Bell & Ross (which opened its e-boutique back in 2008; what did we say in Part One about young brands cottoning on faster?) noticed that people tend to buy more accessories with their watches when shopping online, a sentiment echoed by Nomos, whose sundial ring is a particular favourite.
Christopher Ward, another young brand with plenty of online experience, notes that site design sometimes needs to be more flexible than brands realise. “You need different journeys through your online store as visitors are unlikely to only visit once before buying,” says Mike France. “One journey should allow the customer to browse and acquire information as part of their research and should, therefore, be full of details that you often don’t find in a physical store. Another has to be a seamless, effortless journey through to the checkout once a decision has been made to buy. It’s remarkable how few luxury sites understand the need for this.” Expect brands’ sites to evolve faster and faster once they have their own datasets to analyse.
A model for success
Another development we can expect to continue is the entry of a wider range of retailers. Net-a-Porter capitalised on the fact that luxury fashion brands’ sites weren’t set up for e-commerce, and in the last couple of years Mr Porter has done the same for watches. Where not long ago it stocked only a handful of quartz fashion brands, it now hosts Zenith, Junghans, Bremont, Ressence, Oris and most recently IWC. It’s not shy about taking high-priced pieces either – IWC’s Portugieser Tourbillon Mystere Retrograde is topping the list at £99,500. Other online outlets such as Oki-ni.com or Trunk Labs – both of which currently stock design-oriented brands like Uniform Wares, Larsson and Jennings and Junghans, may well look to follow Mr Porter’s lead. Customers online are far more accepting of newcomers to the marketplace; if your offering is right, you don’t have to have had a Bond St. location for the past thirty years.
In Part Two, we looked at the brands that are, so far, holding out against going online. Some are stronger than others in their resolve, and for many, belief in their own convictions may be the main factor that maintains that stance. It is, after all, hard to imagine a Patek Philippe e-store – but one thing recent history tells us is that where the majority goes, the rest are bound to follow (take the Far East, for example). We know that several brands are planning to open their own e-boutiques in 2017 – see below – and would not bet against several more announcing it before 2018.
As well as Panerai (see Part Two), a number of brands are on the verge of opening up online sales operations in the UK. At the time of writing, Eterna had just launched its e-boutique: the only watches available are the Granges 1856 collection, a range not sold anywhere else in the world. CEO Robert Dreyfuss confirms the plan is to test the water, with a view to extending online efforts in 2017.
QP can exclusively reveal that Hamilton will launch a UK e-shop in 2017, following success in France and Italy. And it’s not just the volume brands; H. Moser & Cie CEO Edouard Meylan told us that he plans to sell online, saying he is currently exploring its options. Bremont co-founder Giles English said that it is something the brand will do “at some point”, adding that “most of our competitors and luxury brands are doing it and you have to give the customer choice.”
Even though watch sales were down from 2014, the average price spent per watch in 2015 was up 126 per cent. Surveys indicate that consumers do the majority of their research online, and rank blogs and social media as equally big “triggers to purchase” as seeing items in a physical shop. No surprise then that since 2015, Piaget, Van Cleef & Arpels, TAG Heuer, Cartier and Montblanc have all opened e-stores in China. It’s a lot lower-risk than opening bricks-and-mortar boutiques, and you stand to reach a potentially much larger market.
If you’re not convinced by China (after the last couple of years, that would be understandable), consider Africa. For much of the continent, online banking and retail is thriving precisely because the physical equivalent has never existed, or never penetrated far enough into a country’s population.
Credit Suisse’s Wealth Report predicts Africa’s number of high net worth individuals to rise by 59 per cent over the next decade; Euromonitor forecasts luxury spending to grow by 31 per cent by 2019, and KMPG’s 2015 report on the continent’s luxury market concludes that “The continent holds significant potential for the luxury goods segment…The African consumer tends to be brand loyal, which provides the first mover with substantial growth potential. Luxury goods brands can, by establishing brand loyalty at an early stage, benefit from the evolution of the African consumer, especially in moving up the value chain.” GDP growth of between 5 and 8 per cent is not uncommon across the continent, and 70 per cent of the population is under 30.
Whether or not the e-boutique can fulfil the function of a bricks-and-mortar presence in territories where brands have never had stores is one question, but will the online store ever replace traditional, physical retail altogether? Not a single watch brand that we spoke to allowed for the possibility, with even the most digitally-optimistic maintaining that a physical store will always be a necessity. We don’t disagree – but the advent of some new technologies raises some interesting possibilities.
In the words of Hublot’s brand manager for the UK, France and Benelux, Benoit Lecigne, “If all our five senses (sight, smell, hearing, taste and touch) are stimulated online in the same way that they are in a physical store, then, yes, for sure, the online retail experience will replace the offline one.” He wasn’t, perhaps, being entirely serious (and went on to reiterate that there will always be a place at Hublot for physical stores), but it raises questions. “Will the augmented reality give one day the perfect illusion of “really” trying a watch on our wrist? Will a leather smell ever be released when an image of a handbag will appear on the screen?”
It is not so far-fetched; virtual and augmented reality can already transplant you into incredible scenarios – does walking down an imaginary Bond St, seeing what a watch would look like on the wrist and talking to virtual boutique staff before making a purchase seem so unrealistic? In 2016, Vacheron Constantin partnered with the EPFL+ECAL Lab at the University of Lausanne on a project – called Chronogram – that aimed to digitise part of Vacheron’s museum archives and present the information through a virtual reality headset (given a suitably “luxury” makeover with hand-stitched leather).
It’s not a great leap from there to a platform that lets you browse the brand’s collection of watches. At SIHH this January, staff on the Jaeger-LeCoultre booth were handing out augmented reality bracelets that, when placed under a projector on the front of a showcase, allowed you to see the watch on your wrist. And guess who just trialled the largest ever virtual reality shopping experiment? Chinese retailer Alibaba, on Single’s Day, the world’s biggest one-day retail event (it dwarfs Black Friday by a factor of four). You heard it here first…