The Digital Transformation of the Watch Industry
Over the span of the last four decades, the wristwatch has significantly changed. Digital watches offer the same functionality they’ve always offered: time, alarm, date, and stopwatch (in some cases). Apart from a small category of expensive, highly-specialized luxury digital watches focused on extreme sports, wristwatches have been a rather inexpensive gadget. The introduction of smartwatches, including the Apple Watch or the Fossil Sport Smartwatch, indicates a drastic and dramatic change. These watches are termed as “smartwatches,” but they are more like wearable computers than ordinary watches.
With the growing adoption of advanced technologies and the emergence of e-commerce, the digital transformation of watches has now been driven by the COVID-19 outbreak. Digital supremacy is no longer limited to specific industries, it’s absolutely vital to the success of every business in general. The watch industry is no different. Prior to the COVID-19 outbreak, luxury watch and jewelry trade shows were already in a state of shock. Dates, details, and formats have been increasingly changing at high speeds that are uncharacteristic of an industry long known for deliberate change.
Some of the largest and most luxurious brands, including Casio, Breitling, Seiko, as well as the entire multi-billion dollar Swatch Group, ditched the industry’s oldest and the most significant trade show, Baselworld, over the last few years. Instead, they switched to their own shows or other trade shows. Return on investments (ROI) seems to be the connecting theme for the exit of watch companies representing multibillions in annual turnover. In short, watch companies have found more efficient ways to exhibit and promote their products to their world.
Following the cancellation of the trade show Baselworld 2020 in March because of the COVID-19 outbreak, Rolex and Patek Philippe delayed the release of their new timepieces. Although not very surprising, considering the overall scenario of the economies of the world — it is, nevertheless, telling of how things might go ahead in the watch industry in the coming months, or until the official release of a potential vaccine. This could mean that Rolex and Patek Philippe will simply wait until the next trade show to debut their new luxury timepieces. Or, they could release some of their timepieces soon, perhaps without a major show platform similar to like Seiko, Breitling, Casio, and Omega.
Grand Seiko, together with its parent organization Seiko, also departed from Baselworld this year and rather presented their new timepieces on digital platforms. Besides, Patek Philippe, for the first time ever, permitted their authorized dealer network to sell their watches via e-commerce channels for a limited period worldwide.
Jean-Christophe Babin, the Chief Executive Officer (CEO) of luxury watch company Bulgari, said that the COVID-19 outbreak has had a dual impact — with short-term plans accelerating and mid-to-long-term plans showing sluggish growth. “We have e-commerce platforms in the US, Japan, and China, but the pandemic drove Bulgari to extend these operations to a wide range of markets. Globally, the coronavirus pandemic has contributed to changing the mindset for luxury watch companies that were not focused on e-commerce platforms,” he says.
Antonie Pin, the Managing Director (MD) of Bulgari’s watch division, said that the worldwide lockdown generated acceleration in online sales of timepieces between 100 and 300 percent based on the market — a pace that is going to continue even after the release of a vaccine. However, despite the robust online sales, Bulgari doesn’t believe that digital sales will ever replace the bricks-and-mortar experience for luxurious products and underlines that physical stores will remain the primary source for the company.
While many brick-and-mortar outlets, from Patek Philippe’s Bond Street Salon to Breitling’s new high-end Regent Street Townhouse and Watches of Switzerland’s boutiques, have witnessed reduced traction than in previous years, they have also reported higher sales conversions. While it is certain that physical stores will gain traction in the coming months, the personnel, financial, and technical investment that has been made in online sales and marketing, along with new consumer expectations, indicates that the profit is up to the mark. Moreover, when it comes to e-commerce, the global watch industry is way beyond the point of no return.
The Bottom Line
The watch industry as a whole is in a phase of digital transformation that will last beyond 2020. Studies from previous years have shown that the industry is durable and flexible; the coronavirus crisis gives it a new opportunity to show again how agile and adaptable it can be.
High-end watchmakers and those focused on luxury watchmaking, along with their authorized suppliers, have survived the pandemic well; but the low-to-mid-range brands will face a few challenges and will need to adapt as per the situation. In the coming months, other favoring high-end and smaller brands will ensure that they are also well-placed to thrive. Their size can give them a major benefit, by providing the creativity and adaptability to respond to the changing consumer preferences and industry dynamics. Engagement through e-commerce platforms will introduce brands to an even broader potential consumer base.
The future is not entirely dependent on digital sales, however. Especially in the high-end watch segment, building relationships, ensuring trust, and offering excellent consumer service are hard to achieve in the digital platforms. Using augmented reality (AR) to visualize a high-end product on your wrist is a lot less exciting than experiencing it in real life. In spite of how the crisis plays out, the global watch industry will see the year 2020 as the year of digital transformation.
About CT Pundole & Sons:
CT Pundole & Sons have over 110 years of expertise as the paramount supplier of luxury timepieces, striving to deliver an extraordinary customer experience. As one of India’s oldest authorized luxury watch retailer, CT Pundole & Sons has stores across Pune, India, and is trusted by 28,000 customers until now. The showrooms bring together more than 66 of the most coveted brands from around the globe. CT Pundole & Sons offer one of the largest certified watch collection and excellent service & repairs, making it one of the most trusted and reputed retailers.