At the time of writing this article, some countries are plodding along with the opening phases of releasing the world’s economy from the stranglehold of a pandemic (while others are further from that goal). Few can see through the fog to predict what may come for their businesses.
My industry — the mechanism which designs, creates, distributes, markets, and sells timepiece — is just one of many verticals that have had their business goals and objectives utterly stampeded by the priorities of the virus war. What makes the watch industry a bit more distinctive than most rank and file areas of production is that it was having some rather serious problems before the pandemic. A big question on everyone’s minds is: What will the state of the watch industry be like when the COVID-19 pandemic lockdowns have been more or less fully lifted — and from there, what will business look like in the next 5-10 years?
In my opinion, the best answer to the above question is to ponder what new growth areas the watch industry may likely experience or at the least should investigate in order to discover new fortunes and relationships with consumers. The core problems with the watch industry that besieged it at the outset of COVID-19… will still be there when the world emerges. The watch industry was struggling with reaching enough customers and determining where they should be selling their watches. The watch industry also routinely underestimates the true costs and responsibilities inherent in running international business operations. What can help solve all of these things? Money, of course.
So, rather than the typical “here’s why the watch industry’s current direction is bad for it” essay, I want to discuss some prospective areas in which the luxury timepiece industry may be able to grow. The following items are just a few possible wristwatch product growth areas that I came up with. I’m just as interested in what you think and what ideas you may have about where the watch industry has the opportunity to grow over the next few years. Use the comments below to share your thoughts, and now let’s find out where I think people can stand to make money in luxury watches in circa 2020.
A Return To Purpose-Built Tools
There is something very interesting about the difference between a lot of vintage watches and today’s modern ones that I believe has a still unspoken effect on consumer psychology. This is, of course, not universally true, but in many instances, older watches were actually intended to be used during particular activities when today, most traditional watches are really worn for decoration. This has a lot of impact on the products themselves and their appeal.
A company that makes a watch for actual pilots is probably going to produce something different than a masculine-looking jewelry item that might make for a very fine pilot’s watch but is really meant for men who are romanced by the dream of flight. The former watch will be more like a tool and the latter more like a fashion accessory.
Neither is inherently more profitable to sell than the other, but all the fashion items stem from functional items. What the luxury watch industry has been missing for a long time is enough of their watches going to “professionals.” It could be time to change that.
With new human challenges comes new places for timepiece innovation. Think about how in only the last year, two major events arose that could easily require lots and lots of purpose-built timekeepers. I am referring to global wildfires and a contagion crisis. Legions of firefighters don’t (to my knowledge) have fire-resistant wristwatches. I’ve not heard of clocks or other timekeepers that can withstand really high flames (the origin of the Cartier Crash suddenly comes to mind). Is it not commercially interesting for brands to produce watches designed for firefighters’ wrists or for human effort in extremely high temperatures. The watch industry has perfected the watch meant to be underwater, the watch for outer space, and the watch for the freezing cold. What about the fire-resistant watch (complete with fire-resistant strap)? Watches like that could have immediate sales appeal aside from collectors but, at the same time, give collectors something to be interested in all over again in the future.
COVID-19 has dramatically raised awareness of infectious molecules and items that can carry them. Healthcare frontline workers all need easy to sanitize gear, including watches. Right now, the market has precious few watches that are designed to be sanitized or that are resistant to microbes attaching to them. In addition to intelligent material and designs for healthcare workers, modern medical context watches could also incorporate notification systems using inexpensive Bluetooth or other communication protocols. There is a reason pagers remained popular with doctors and nurses long after the general public stopped using them. They provided efficient uni-directional communication that did not pressure a healthcare worker to stop what they are doing if they receive an incoming message.
Entire staffs might be given the same watches that connect to a central communication hub that sends them relevant messages and keeps everyone on the exact same time. Such a network could even use disposable watches meant to be washed a few times and then thrown away. Traditional watches can cost less than a dollar to manufacture if you are really trying to keep costs down. With some economy of scale even a moderately sophisticated electronic watch could be sold for low amounts but at high volumes for a healthcare industry that isn’t going to stop needing them anytime soon.
While not all tool watches will have immediate luxury appeal, don’t forget that it was Swatch sales that allowed brands like Blancpain and Breguet to develop. No luxury watch industry can be supported without sitting on a base of higher volume production underneath them. After COVID-19, and perhaps in part as a response to it, the watch industry would benefit from returning part of its production to actual tools for professionals.
Adding More High-End Electronics To Luxury Timepieces
“Quartz” is amusingly a term often associated as being anathema to luxury. This is because in the 1980s, quartz watch movements became cheap to make, and accordingly, the rest of the watch (case, dial, strap, etc.) shot down in quality as the world became flooded by timepieces anyone could afford. While it is still true that most quartz watches are built with less effort than mechanical watches, it is not true that all electronic watches are uninteresting — or that luxury is the exclusive realm of mechanical timekeeping.
I believe companies such as Devon were onto something. The American company set up shop in California, assembling a $20,000-plus belt-driven watch with parts coming from mostly America and Japan. It was the anti-Swiss luxury watch, but its biggest problem was that it didn’t have much of a market to position itself within. Having only the traditional exotic luxury watch market to uncomfortably nestle itself, the Devon Tread was in many ways simply head of its time.
The time for high-end electronic watches may be coming soon. The proliferation of smartwatches will, in my opinion, create a new nostalgia and demand for “electronic machine watches” that are less about being connected to screens and more about celebrating our lost history-making electronic machines. These pick up where traditional mechanical watches left off and should probably inhabit their own area of the market. Luxury electronic watches will no doubt be able to perform tasks entirely unlike what mechanical watches can do, and yet still focus on beautiful designs, small production bespoke parts, and fascinating visual experiences that blend the functionality of a timekeeper with the communication power of a fashion item.
High-end electronic watches would also have the ability to legitimately be born outside of traditional watchmaking hubs. This is because an entirely different set of skills and suppliers would be used to make the watches. So while high-end electronic watches will also appeal to a different market than traditional mechanical watches, entirely new parts of the world and talents can be used to design and produce them. I personally feel that the market is ready for high-end electronic luxury watches, and so now it is just a matter of entrepreneurs bringing more of them to market.
Using Timepieces To Communicate One’s Values
When people buy a watch, they rarely do so with the explicit notion that, “People are going to think XXXX when they see me wearing this.” That said, what a watch says about the wearer is actually a critical part of why people choose one product over another. Watches take on personalities and messages based on how they are treated in culture. These socially prescribed attributes often have little to do with how a timepiece is designed or what it looks like. More so, marketing and brand personality add a social communication value to an otherwise functional object. How can brands take better advantage of this?
Not all watches need to be the “wristwatch for winners,” or the “timepiece worn by those with taste, sophistication, and monetary success.” New brands without much to show in the product department, but heavy on loosely defined social and lifestyle marketing messages, have been able to move lots of product by associating their brand with emotions and causes that people care about. Traditional watch brands have comparatively floundered when it has come to connecting their products with social movements or modern activities that consumers care about.
Sure, brands know how to associate with an event by sponsoring it, but you rarely get the sense that the brand is trying to communicate that they feel strongly about something other than reaching buyers with disposable income. When a watch brand has a strong association with a cause or personality, that watch typically has market success —only most of the time it happens, it is an accident. Brands today should start earlier in the development of their company or new products and ask themselves how they can connect with things consumers care about, statuses consumers want to be associated with, and achievements consumers actually hope to receive.
Watches and brands dutifully connected with these values benefit because owners wear them not because they like the design or feel they are a good watch. That becomes secondary. Instead, consumers wear them because the watches send a message that the consumer wants to be associated with. When brands lack investment in developing personalities for their brands and products, they fail to create values consumers can connect with. The development of such brand and product personalities is the answer to how to inject them with values consumers will be able to relate to.
Meaningful, Mainstream Product Personalization
An interesting side-effect of selling a personalized wristwatch product is that they tend to have far less traction on the secondary market. Some might see that as a bad thing, but it is good for the watch industry in general. Customers who purchase bespoke or personalized watches have the same appetite for new timepieces, but when it comes to purchasing something new they will go out and buy something new (and original to them) as opposed to purchasing something used. This is a positive thing for any industry whose primary goal is selling new, not pre-owned items.
I mention this because the future of watch sales must include new watches as well as a robust pre-owned market. One good answer to that is by producing more personalized items. Today’s rapid manufacturing technology and web-based product-customization programs make that easier than ever. Product customization in the watch industry is by no means new. At least a few solid efforts per year to introduce a new personalized wristwatch product show up on the market. While there is traction, there also isn’t too much support from the bigger players. At least not yet.
The trick is to offer consumers meaningful levels of product differentiation. Being able to select from a few customization options such as colors and materials might seem like a solution, but the results often feel less individualized than the brands might have intended. The goal of any personalized product is to produce something that the consumer feels was made just for them, and that ideally represents them. Therefore, personalized watches require an authentic level of originality to be truly sticky with consumers.
Taking Advantage Of Smartwatch Software Marketplaces
Eventually, the smartwatch industry and the traditional watch industry are going to intersect more completely. Already the two now different industries will attempt to intersect time and time again with only a few of the intersections making practical sense. Having said that, as smartwatches slowly but surely creep toward market dominance, the future is one where smartwatches are just “watches,” and today’s non-connected watches may have to settle with the title of “traditional” or “classic” watches.
When traditional watches are officially no longer king, what are some ways they can market themselves to people who are currently wearing smartwatches? Or better yet, how can they make money by people having smartwatches on their wrists? Technology companies are often bad at creating emotionally compelling product designs, which is where the traditional watch industry succeeds. How then can the traditional watch industry lend what it does best to the smartwatch consumers? Perhaps by designing and selling smartwatch dials.
As someone who has reviewed most of the major smartwatch products and operating systems, I can say that one of the most underdeveloped areas of style is in creating smartwatch dials as lovely and compelling as those on traditional watches. Indeed, a watch dial produced from actual materials and playing with actual light will never be replicated in digital form. With that said, smartwatch dials use many of the sample principles as traditional watch dials, and they can be created by the same people. In fact, most watches and watch dials in Switzerland are already being designed on computers these days, as it is. It wouldn’t be that long a stretch to code them into functioning smartwatch face software.
If the future of smartwatch customization involves more paid third-party faces, as I anticipate, then traditional watch brands are some of the most likely businesses that can benefit. In fact, as it is, many of the smartwatch faces you can purchase for smartwatches are heavily influenced by the work of big traditional watch brands. At least this way they can earn a piece of the action.