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Audemars Piguet CEO predicts watch retailers will not need physical stores

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Audemars Piguet CEO François-Henry Bennahmias is planning for a “dematerialization” of retail where you do not need four walls to sell a watch.

This year’s Covid crisis has prompted Mr Bennahmias to completely rethink how watches and other luxury items and experiences are sold and come after he revealed that 40 of AP’s [Re]Master01 were bought during the global lock down.

At $53,100 each, that totals over $2.1 million for a boutique-only watch sold while all its boutiques were closed.

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Neither Audemars Piguet nor its authorized dealers sell its watches online, so these [Re]Master01 deals will have been secured by reaching out directly to customers through phone calls, messaging and social media. The watches might then have been collected in stores, but more likely were delivered directly to customers at their homes.

Mr Bennahmias is convinced that some of the behavioral changes among consumers during lock down will be permanent, and is looking at how AP can adapt to the new normal.

Buying watches without ever needing to come into a traditional store is going to become commonplace, he predicts in an interview with Brian Govberg, director at pre-owned watch specialist WatchBox.

“We are going to call this dematerialisation of retail. I don’t need four walls to sell you a watch tomorrow,” he suggests.

Mr Bennahmias would not expand on what this would mean in practice for the brand’s own boutiques or those run by franchise partners including London Jewelers, Material Good and The Watches of Switzerland Group.

However, he does suggest that completely new thinking is required, not just a shift towards ecommerce.

“When you talk about luxury, you want to be touched in the part of your brain where emotions are triggered. Emotions could be for a watch, a piece of art, shoes, a handbag; anything. Emotions are between people. The computer will not give you an emotion,” Mr Bennahmias says.

“What we are looking at now is what we can do tomorrow to trigger emotional responses a lot better. Don’t get me wrong, it is not a matter of being on top of our clients all the time, day and night. Luxury is like dancing. If you get too close, you step on each other’s feet. We have to relearn the notion of interacting with clients,” he adds.

Audemars Piguet is looking outside the luxury watch industry for inspiration and aims to avoid the Swiss group think that has held back innovation.

“Maybe in our industry the future is not looking to hire people that have been working in our industry for the past 10-20 years, but to look completely outside towards the world of hospitality. The next people we hire might come from the hotel or restaurant industry; we will see,” he concludes.

12 Comments

  1. Consumer behavior is happening, however, in the luxury time pieces industry shopping experience is part of the selling process, hand-feel-experience are a must to acquire a luxury watch,
    Doesn’t matter the value, even if I’d in directly in proportion as higher the value, higher the shopping experience demand.
    Last but not least, stores allow the brands to transmit their DNA and experiences.
    As watch passionate and collector, I always would walk to a store.

  2. The CEO thinks this because AP sold 40 pieces of a $61K re-issue to existing customers that they called to hawk the watch to.? Of course existing long-time brand watch owners might buy a special edition piece without ever seeing it in person. Plus he wants to hire restaurant and hotel people? How does that make sense for his dream of being an e-commerce biz?

  3. I respectfully disagree with Mr Bennahmias. While his firm may market fine watches online to his already well-established client base, what he is sadly ignoring is the essential “experience” of visiting a boutique to see AP creations in person. He should view the video with Mr. Biver when he details his experience at the purchase of ordering his first Ferrari, when he visited the factory. As a watch enthusiast for half a century, “the buying experience” counts! This cannot be accomplished online. A prospective client must be warmly welcomed, educated, and encouraged to become part of the tradition and story. Patek and other fine watchmakers have embraced this important idea for generations, and it will remain key to those firms’ success. Internet sales are coldly impersonal, and they do not offer to any extent the connection a prospective client has to the brand, its quality or most importantly, the people behind the brand.

  4. I actually agree with Mr. Bennahmias and, unlike the other commentators here, I don’t think there is much of an “experience” to make it worth going to an AD. These experiences are designed at best to tickle your ego, so it depends on each one’s personality. These days you get a much better watch education online than you can get from the AD. So what’s left then, drinking a glass of champagne and trying the watches? You could do that much better with a XX days money back guaranteed policy since you would be able to actually wear the watch, feel it and analyze it in details over a few days period, unlike the few minutes you could try it at the AD. Not to mention that the younger generation practically lives online.

  5. Watches are commodities. Chrono24 has changed the game. They have shifted an entire industry to e-commerce , with many buyers using the site to get estimates of the prices of the piece they are after. Price is what you pay , value is what you receive. It’s up to you to determine if the boutique treatment is worth the premium in price. He probably knows that is an emergence of astute buyers that are using the boutiques to gage the physical attributes of the watch, but are executing the transaction online.

  6. Honestly, retailers have been dealing this way for a long time now, it’s the only way they could survive the last couple of years. Retailers still need brick and mortar, but refined to modern standards. But the direct to consumer marketing via telecommunication is nothing new.

  7. Every Brand is different, their Market position, their audience, quite possibly with AP their Boutiques, the customer having touched, tried on, felt the weight (“weight connotes value”) felt confident enough when the offer as tendered (at whatever price)! Further these were Boutique “only”, so the experience may have already been consummated, there had already been the “mating dance”, now the “Close”. With AP predominantly the Genta designed Royal Oak, it’s Offshore extension, Code 11.59, possibly, there can be an acceptance with familiarity! I think Mr. Bennahmias, more the provacatuer as the table is still being re-set as to Retail and it’s concourses! There are those who will buy, predicated on knowledge, accrued and Market Position, to which Price is no object. In the end, Luxury itself is ephemeral, ‘Quality’ requires the best, not second best, Education, the sophistication and taste created by the Purchaser that creates the desire for something special, the experience, may transcend the result, but regardless there needs be for 97% of Product the opportunity for Exposure and Education, AP looking at the remaining 5%, will share it with Patek and others, so a Timepiece Sommelier dispatched to one’s residence can deliver the opportunity with the subtle coercion of the purchaser feeling places have switched and the “want” is now
    on the other wrist, the Hospitality Agent having delivered their ‘Time”. I agree with the Automobile analogy previously stated, if one’s first whatever, one needs the experience of the Image, the Granite, the Smell, the Location that embellishes the experience while one determines the Comfort, Performance and Satiation of their Desire.

  8. Note to MonsieurFrançois-Henry Bennahmia, Audemars Piguet CEO, your strategy makes sense for the Royal Oak only. Many collectors will buy it on reputation alone. However, if Audemars Piguet wants to sell the rest of its watches, consumers will need to try it on at the AD, and have an in-depth conversation with a knowledgeable person at the retail level (i.e. AD). If Monsieur Bennahmia wants to improve the customer experience for AP watches, then I suggest that the AD (or AP online) allows the customer to order an AP watch, and get a delivery date. As a sales model, look at how Tesla takes and delivers its electric cars. The issue is that I have given up on buying a Royal Oak steel model (one of the “unicorn” watches). My 2 options are to either pay well over ist on the secondary market, or get lucky at an AD – neither option is acceptable.

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Rob Corder

The author Rob Corder