Selling watches on the high street remains tough. Among the challenges blighting retailers are high business rates, fierce competition and currency pressures.
The most recent figures, published in May, revealed that April’s UK retail sales values were down 2.2% on a like-for-like basis against 2012, according to the British Retail Consortium (BRC) and KPMG Retail Sales Monitor. On a total basis, sales were down 0.6% against a 1% decline in April 2012.
“There’s a sense that people are more prepared to spend than they were but chief executives are telling me that’s volatile,” says Helen Dickinson, director-general of the BRC.
It is a somewhat dreary picture that seems worlds away from the display of wealth among the lavish halls of BaselWorld, which took place in that same month. But encouragingly shoppers pounding the pavements were never far from the minds of the watch brands, with retailers reporting that both at BaselWorld and beyond, their needs are being listened to and acted on.
“Consistently we saw a lot of recognition of the fact that the market is a little more difficult,” says Noel Coyle, chief executive of multiple retail chains Fraser Hart and Fields.
Coyle, along with other watch retailers, has said that watch brands across the market are listening to feedback and responding with distinctly commercial product development, often in the shape of reworked proven popular models. “I think a lot of brands have kept their new product offering tighter and have focused on strong lines – extensions or variations of current lines that are strong sellers and keeping the various families updated and refreshed but on a very commercial level,” he explains.
Revisiting and reworking popular models is hardly a new approach and is true of most fashion and product trends. “There’s nothing new under the sun – the 40s, the 60s, the 70s and the 80s all come back into fashion at some point,” says Paul Kustow, UK sales agent for Nomos Glashütte. “Even the current style will be repeated.”
For many brands, reworking previously successful models is part of their product strategy. Jasmina Steele, the international communication and public relations director for Patek Philippe, describes creating new waves of timeless designs as “our permanent design challenge”.
“In our collections and, as presented this year at BaselWorld, you will see new models that revisit previous ones or complement existing models, as well as totally new models with a new case and movement inspired from previous watches,” she says, giving the brand’s Gondolo Art Deco-style 8 Days, Day & Date Indication as an example. “For Patek Philippe [reworking and updating models] is not a new strategy, our models have always evolved softly. A new model for Patek Philippe in terms of design is an evolution, never a revolution.”
Relaunching a refreshed or reinvented product line is not an easy decision. Victoria Campbell, managing director of the Dreyfuss Group, says that for them choosing to refresh a watch family requires careful consideration, for which industry opinion is canvassed. She adds that getting the launch timing right is also essential.
“We monitor the product life cycle and rate of sales and aim to relaunch key families before the sales plateau,” says Campbell. “We step in to slightly tweak the design to refresh the family and bring newness to the range. During these uncertain economic times consumers turn to investing in classic products that will not date rather than frivolous purchases.”
While relaunching refreshed models is not a new trend, it is certainly one that has gained notable traction over the past few years, tying in with retailers’ pursuits of more failsafe options. “It’s been a bit more of the trend over the last few years,” says Derek Salter, director of Burton McCall Watches, which distributes Victorinox, Mondaine and Luminox. “Going back a few years at BaselWorld there was always a new specification, technology or complication. Now we have retailers who can’t necessarily invest in new things and who instead want timeless pieces. Meanwhile, consumers want to be able to justify their purchase as classic and enduring.”
Revisiting past success is not solely linked to market conditions. While shouting about a brand’s heritage can often pay off, reinventing a previously popular or signature model can help reiterate a brand’s tradition, making for a savvy marketing move. “Revisiting old models helps to reinforce the brand value,” says Salter.
In January, Victorinox introduced a reworked version of its popular Infantry model. The watch retained its core features and stayed true to its roots while some aesthetic details were altered, for instance elongating the hands and taking measures to maximise readability. Salter says that reworking models ensures pieces appeal to the same target audience but often gives them a better watch for a better price, ensuring value for money in what Salter terms “value-added engineering”.
Although brands are thinking commercially when it comes to product development it is not at the cost of innovation. Commerciality and innovation are not mutually exclusive. “I think there is still product development from the brands,” says Coyle. “There’s quite a lot of innovation but that innovation is couched more commercially. There is development, there is newness, there is innovation but it’s with a commercial perspective.”
Despite many brands remaining cautious, innovation is still out there. Take for instance the US$34,000 (£22,485) Ressence Type 3 with a dial submerged in liquid for its light refraction qualities that makes the dial appear to be projected onto the domed crystal – a talking point for many enthusiasts at BaselWorld. Although Ressence founder Benoît Mintiens respects the direction other brands are taking he says that innovation is still important. “As a small brand you need to innovate to stand out, what else do we have?” he says.
Also showing no sign of shying away from innovation is Maurice Lacroix, which recently introduced its Masterpiece Seconde Mystérieuse. The timepiece is a visual feast and, aptly named, immediately draws the eye to a blue seconds hand floating mysteriously on a grey disc that dominates the skeletonised inner workings of the movement. The hand moves on its own axis across the disc in alternating horizontal and vertical 15-second cycles, creating an optical illusion.
“Innovation and creativity are brands’ oxygen, main point of differentiation and a necessity to assure brands’ and retailers’ future development,” says Sandro Reginelli, research and development director at Maurice Lacroix. “The challenge is to find the right balance. Both obviously play a key role and naturally lead to success when merged.”
Brands at both ends of the market are working to ensure that they get the balance right. “To strike a balance, a manufacturer will produce a range of watches that will cater for both ends of the scale, with a bias in the arena that suits their customer base the most,” says Andrew Morgan, editor of Watchfinder’s The Watch Magazine. “Rolex, for instance, will continue to produce the hugely commercial Submariner whilst also developing intriguing new watches such as the Sky-Dweller. The dual-tone GMT-Master II revealed at BaselWorld 2013 is in fact a prime example of doing both at the same time, catering to the desires of its customers – the dual tone bezel – whilst simultaneously providing something new – the black and blue colour scheme.”
In reworked models there is innovation too and when consumers invest in an upgraded version of a beloved watch they expect to see some level of development. “There is still innovation in value engineering but perhaps not such a spectacular way,” says Salter.
Take, for instance, the Victorinox Chrono Classic 1/100th, the latest version of which was presented in April. The introduction of a new quartz movement means that with a double press of the crown, it is a chronograph that is accurate to 1/100th of a second, which is displayed numerically via two rotating discs. Two new dial colours also add to its subtle yet effective transformation, ensuring it evolves but remains faithful to its genetic code.
Although research and development must remain part of every brand’s DNA to ensure the continued evolution of the horological landscape, it is increasingly with the retailer and the market conditions in mind, which is good news for retailers that continue to face challenges.
“There are few independent retailers out there who aren’t finding it tough,” says Robert Downes, policy officer at the Forum of Private Business. “There’s been a huge squeeze on consumer spending, meaning shops have had less business coming in. This has been coupled with a steep, we would say hugely damaging, increase by government in commercial business rates, which all equals tough times.”
From a retailer’s perspective, knowing that watch brands are on their side is increasingly important. “The majority of watch brands tend to forget that their customer is not just the consumer but the retailer too,” says Willie Hamilton, chief executive of buying group the Company of Master Jewellers. “The Citizen brand is a great example of investing in the retailer and their main focus on the retailer brings added sales through training, category management disciplines with core range selection that reflects the commercial needs of the consumer today and tomorrow.”
The best kind of relationship is mutually supportive and while retailers are speaking out and brands are sitting up and taking note, the results are likely to benefit both parties. Although innovation continues to drive the market forward, the revisiting and reinvention of successful models is gaining traction and helping to ensure that the watch industry is on track for for an exciting and profitable future.
This article originally appeared in the June 2013 issue of WatchPro. To read a digital version of the magazine in full online, click here.