Digital Transformation in Luxury Watch Brands
Investing in a luxury watch has long been considered as the portrayal of success. It is usually revered as the achievement of a major landmark in life and ultimately an expression of value in engineering, quality, and craftsmanship. But the question is: Do tomorrow’s consumers think and believe the same as yesterday’s?
Luxury watch brands are highly enigmatic when it comes to sales figures so as to protect the equity of their brand. But there’s one thing that’s certain: Consumer behavior and preferences are changing, and it’s time to reconsider the worth of brand heritage for new consumers. Let’s dive deep into it!
The Digital Transformation of the Swiss Watch Industry
The Swiss watch industry is the epitome of classiness and refinement that keeps on dominating the global luxury watch industry. Ingrained in history and success, the brand heritage model was one of the most recognized of all times. However, the scenario is changing, and the role of the luxury consumer has shifted to empowered dominance.
People no longer look for personal satisfaction by merely purchasing luxury goods. They get empowered by leveraging digital technologies at a high rate. Luxury consumers want to communicate, belong, and be the brands they purchase the products. Well-versed, vigilant, and in charge, they care about their opinion in the public light and social media platforms and the experience of the products they purchase and own.
According to a study by Deloitte, social media was considered as one of the most important requisites of the marketing strategy of watch brands. They have rationalized their marketing strategies to be lower cost and higher impact, focusing more on regaining control over the social identity.
Social media influencers and platforms have had a major influence on young people’s buying preferences. The study stated that five out of six countries considered their most important marketing channel as the buying decisions of people aged between 18 and 29. Moreover, a lot of luxury consumers are most probably to buy a smartwatch through social media platforms or online channels. And the amount of digitally influenced and generated sales is probably going to grow exponentially until 2025.
Undoubtedly, the advent of digital technologies has considerably impacted how people interact with luxury and smartwatch brands. Swiss watch brands have to leverage omnichannel customer engagement services, innovative ideas, and the technology that combines them to influence consumer behavior across multiple spectrums. These include sales, communication, service, and content channels that will result in in-depth, more trustworthy relationships between luxury consumers and watch companies. In today’s digitalized world, this has to happen swiftly. This is because other companies, disruptive channels, and the demands of luxury consumers are unfolding at an unprecedented rate.
Luxury Watch Brands are Moving to Digital Platforms
In an industry built on refinement, high prices, and superiority, it’s outwardly in conflict with the tech-oriented generation of tomorrow. People are looking forward to omnichannel retail, trustworthy brand relationships, and highly customized and personalized products. How can luxury watch brands innovate without harming their brand heritage and identity?
In 2019, Audemars Piguet launched a new line of watches named ‘Code 11.59,’ which is one of the most classic examples of a legacy brand campaign to receive mixed feedback and reviews. It was aimed at a younger, digitally connected audience after its classic model, ‘Royal Oak,’ which was admired by older consumers.
There are a lot of reasons the products received mixed reviews, including the fact that the watches fell into both sports and dress categories. The major issue was perhaps the brand’s paid influencer marketing strategy. It received great appreciation that led many to believe that they hadn’t been earned but brought. In any case, it became the first Swiss watch company to launch a store on WeChat, unlocking the huge potential of the Chinese luxury consumer market. Classical luxury brands are identical with a basic concept that encompasses their value and core message. This is what helps them grow and maintain their brand identity over time.
According to a study by BCG and Altagamma involving ‘True Luxury’ buyers in the top ten countries, Millennials are likely to make up half of the predicted US$ 1.59 trillion by 2025. However, the issue lies in creating appeal for this exclusive industry in search of radical change. Hence, watch companies have realized that it’s time for them to make a robust digital presence. For example, Tag Heuer announced a limited edition timepiece that could only be available on digital platforms.
The Swatch Group is another classic example of watch brands shifting to digital sales. Comprising 18 watch brands in varying price segments, it gained a huge e-commerce opportunity in 2018 through its partnership with Tmall — Alibaba’s online shopping platform, and China’s largest third-party platform for brands and other vendors. This was a part of the major effort by Swatch to dominate the Chinese luxury watch market. Moreover, the company also opened its e-commerce site on Rakuten the same year to be in sync with the fast-growing population of young, digitally-connected consumers.
In 2017, Omega turned to Instagram for the first time to sell its timepieces, particularly the #SpeedyTuesday model. The watches in this product line are targeted at the vast online community of Speedmaster fans. Currently, the company is using Instagram to conduct product giveaways, push topic photographs, and conduct marketing campaigns. By being more consumer-centric and through targeted marketing, Omega was able to bring even more topics of interest to its audience
The Bottom Line
Luxury watchmakers have started to fabricate and implement new ideas: We are aware of the unexpected collaborations between luxury watch brands and tech companies emerge (e.g., Samsung and de Grisogono and Apple and Hermes), collaborations between luxury watchmakers and blogs for limited editions (e.g., Vacheron Constantin and Hodinkee, Omega and Fratello Watches), and watches becoming more personalized (e.g., Jaeger LeCoultre’s “Atelier Reverso”).
These are the extraordinary smartwatch brands exhibiting the power to change, thereby setting an example. The ability to fabricate, design, engineer, and implement innovative ideas might result in more investments. Moreover, a lot of companies have already been attracted by the promise of profits from applying these strategies. However, unlocking the true potential requires a robust plan that impacts all aspects of the company.
It will derive from the sharpness of a well-informed strategy knowing where to play and the ways to win, increasing the definitive understanding of the balance between the implementation of revolutionary change and the development of innovative ideas. Leveraging the power to redefine business models that actually have the power to empower companies will help the luxury and smartwatch industry in the acceleration to reach maturity in today’s digital era. Moreover, it will also retain the ability to make an impact beyond the watch industry.