the luxury watch industry
Key learnings
-A luxury watch is an expensive timepiece and has been a symbol of wealth and reputation. -The luxury watch market it is divided into different segments depending on the level of complication of mechanism, as well as from the materials from which the watch is made. These are : Watchmaking Masters, High Watchmaking, Luxury and Premium Watches and Designers Watches. -"Swiss Made" watches are the most distinctive ones. The use of «Swiss made» is regulated by law. Minimum standards are set on the basis of the number of production phases performed in Switzerland, which must be respected in order to label a wach Swiss, although some non-Swiss parts may be used. -Some of the luxury watch market players on the competitive landscape are LVMH Moët Hennessy Louis Vuitton SE, Rolex SA, Compagnie Financière Richemont SA, The Swatch Group, Patek Philippe, Audemars Piguet, etc. -Key strategic areas for the watch industry are: the rise of gender-neutral, female market, Chinese market. Furthermore, next on the agenda for the watch brands are: customer centricity, the rise of micro-segments, digital strategy, aim for authenticity and a rise of preowned watch market.
the swiss watchmaking
-Metier d'art represents one of the pillars of swiss industry -geneva is the famous "pincon" (stamp) that makes the top difference in the quality of movement of high fine watches
designer watches
-aesthetics play a more important role than mechanism. seasonal launches where the focus is on cases appeal as well as straps and way to wear -distribution in flagship, multi brand dist, concessions, duty free, online -consumer is more fashion influenced, they know the brand core values but look more for an "appearance" than the watch quality
luxury and premium watches
-automatic and quartz mechanism. represent the iconic vision of the brand in watch industry -production is more serial especially on the iconic products -distribution in flaghsip stores, multi brand distribution, and through concessions -consumer is cultivated and loyal, they know the brand core values and associate w/ them participating to events, following latest launches
automatic movement
-automatic movement continues to tick w/o having to wind it each day -most automatic watches also contain a power reserve which gives a window to remove the watch from the wrist w/o having to keep it in motion
traditional vs smart watches
-coexist and potential for combining features -traditional brands embracing smartwatch concept haven't abandoned traditional watches -smart watches are a channel for growth
quartz movement
-first became pop when seiko came out w/ them in 1959 -battery powered watch
main drivers of product identity
-functionality -technique -aesthetics
next on the agenda
-gender neutral watches -female market -chinese market
mechanical movement
-hand wound timepieces that use a complex movement comprised of hundreds of small parts that are orchestrated to work in harmony which make the watch tick -doesn't require a battery powered computer so there should be no need to be replaced -collectors prize mechanical watches over the superior accuracy of the quartz watch
luxury watches/high watch making
-high complicated mechanism as well as a very refined and sophisticated aesthetics. production into limited quantities but also serial especially on the iconic products each brands carries since their beginning -distribution in flagship stores, multi brand distribution and through concessions -consumer is cultivated and loyal, they know the brand core values and associate w/ them also participating to evens, following latest launches
value proposition drivers in fine watchmaking
-in the center there is the client -surrounding that is product aesthetics, brand & reputation, heritage, and metier d'art
swatch group
-japan gave swiss watch industries a run for their money with the slimmest wrist watch made up by the lowest # of components -created watch which only had 51 parts -now is the worldwide biggest watch producer
exclusive market and collectors
-mechanical watch movement are by themselves an art piece and therefore require a competent knowledge of the "metier d'art" -creation of a new movement and its components takes from 3-8 years depending on the complexity -investment can be roughly CHF 10 million
smart watches
-new gen of watches where the functions and the aesthetics (life style) are key -millennials are key consumers
Watches & Wonders (SIHH)
-one of the biggest shows of the watch and jewelry industries -38 leading watch brands showcase their new products to an audience
Grand Prix d'Horlogerie de Geneve
-public interest organization -highlights and yearly rewards the most remarkable contemporary creations and promote the watchmaking art worldwide -plays a unifying promotional role by staging an annual competition
"Swiss Made"
-swiss made label can be attached to both mechanical and automatic models, and applied to both traditional production processes and modern ones which implement new tech -the use of "swiss made" is regulated by law. minimum standards are set on the basis of the # of production phases performed in switzerland, which much be respected in order to label a watch swiss -a watch can display the "swiss made" or "swiss" certification only if the following conditions are respected: -its movement is swiss -its movement is cased up in switzerland -the manufacturer carries out the final inspection in swizerland
high luxury watches/watchmaking masters
-very high complicated mechanism as well as a very refined and sophisticated aesthetics -distribution is in flagship stores in key cities, exhibitions, auction market and brand museum -consumer is a connoisseur, a collector and very cultivated on all aspects of manufacturing and complications
micro-segments
clusters of strong brands create potential micro segments, beyond the broad segments and brands mentioned above -artisanal brands that are the epitome of luxury - rarity -micro brands w/ an appealing story linked to a very specific territory -crowd funded and crowd sourced initiatives - fashion brands
complicated watches
more functions than the simple added functions can be split into 3 main areas: -time keeping: watches just showing time w/ numbers and complicated beating time w/ a sound - most important are so called minute rpeater -perpetual calendars, moon phases -complicated w/ useful features: chronograph, wake up alarm, time zone, power reserve
swiss movement
movement is considered swiss if: -been assembled in switzerland -inspected by the manu in switzerland -at least 50% of the value of its components are produced in switzerland, w/o taking into account the cost of assembly
simple watches
show hours, minutes, and seconds
the market pyramid
top to bottom watchmaking masters luxury watches, high watch making, premium watches the rest of the watch industry (top two levels are fine watchmaking or Haute Horlogerie)
the market pyramid pt 2
top to bottom: watchmaking masters high luxury watches luxury and premium watches designer watches quartz
fine watchmaking retailers by cluster
watchmaking masters: fine watchmaking ambassadors, watch specialists, flagship store high watchmaking: fine watchmaking ambassadors, watch specialists, brand boutiques, department stores luxury watches: watch specialists, brand boutiques, jewelry stores, emporium, department stores, e-boutique premium watches: watchmaking houses, brand boutiques, jewelry stores, emporium, e-boutique
def of assets by fine watchmaking cluster
watchmaking masters: passion investment, luxury collectible high watchmaking: passion, luxury collectible luxury watches: luxury collectible, luxury consumable premium watches: luxury consumable
