Every month around the 22d of the month, the Federation of the Swiss Watch Industry (also known as the FH) releases the export data for the previous month. The export data serves as a proxy for sales for many analysts. For the month of January 2017, the FH reported another decline in exports. Here is what you need to know.
This is article 1 of 2 (check back in a few days for part 2). The micro brand watch has become increasingly popular among novices and enthusiasts alike. In December, I noted the Most Inspiring Micro Brand Watches of 2016 in the Micro Brand Watch Awards. This article is a continuation of that spirit by introducing and continuing to provide updates on micro brand watch companies.
I have had the privilege of speaking with many micro brand founders in all price ranges and varying degrees of success. They are inspiring and many of them I look to for their thoughts and analyses on the micro brand industry. One question I like to ask founders is “who buys your watch?” or “who is your target customer?” I have heard very detailed responses all the way down to “I, for one, would definitely buy my watch” . . .”people that like watches” . . .”we won’t know until we start selling them!”…..
While these are a range of possible answers, they can also signal some pitfalls that can come with launching a watch brand. There are many types of watch buyers out there and every brand should be targeting one type and designing their watch in look, feel, and price to appeal to that customer. Some micro brands know their customer very well and do a great job, while others miss the mark. Below is my summary of the types of watch customers out there. Which type of watch buyer are you?
139 years ago at the 1876 World’s Fair, the Swiss watch industry performed industrial espionage! Except it wasn’t — The American watch industry was all but fully complicit in sharing their secrets! If you don’t like history, this article is not for you. However, if you like watches and their history at all, or even if you care about how things were made 140 years ago, then you should read this article. To fully understand how dire these times were for the Swiss industry, their representative wrote “It is obvious to all that at this moment the American factories have the advantage. Their products are wanted everywhere, they manufacture and they sell, while the Swiss factory is idle and its agents are without business, many with unsold goods.” This is the story of intrigue, secrets, strategy, and serves as the launching pad for the eventual Swiss dominance of the watch industry. This is the story of 1876.
Swiss watch exports in sharpest fall since financial crisis (Financial Times) — Swiss watch exports fell 9.9 per cent last year, their sharpest drop since the financial crisis, as big markets such as Hong Kong and the US continued to shrink.
Swatch Group is suffering from decreased sales and profits while accruing massive inventory levels over the past few years. The company has recently identified non-specific opportunities for growth in 2017 that seem to have little chance of loosening the quickly tightening belt. While Swatch Group’s self-projected sales growth would be nice, growing inventory levels are something that cannot be ignored. This should leave all of us wondering Is Swatch Group being realistic? Here is my op-ed analysis.
The watch industry is a very complex environment. While it is fascinating in the sense that it thrives off selling obsolete mechanical watches, it continues to baffle many watch collectors. I’ve assembled a simple analogy for the industry. This analogy includes the classic brands as well as the newer prestige brands entering the fray, and also micro brands. As an owner of both traditional Swiss watches and micro brands, this analogy brings both into perspective for me. The analogy starts down a road directly to my heart — food…
“It’s Complicated”: The American Watch Industry, Federal Trade Commission, and Claiming “Made in America”
Made in America claims in the watch industry have been elusive. Claiming anything is made in America is very difficult and costly in today’s global economy. The US has an “all or virtually” all parts made in the US requirement. Recently, many American watch companies have been rebuffed by the Federal Trade Commission for misleading claims. Watch companies claim the FTC guidelines are vague and put American companies at a disadvantage. To get to the bottom of it, I interviewed the FTC’s lead attorney for enforcement as well as two of the only American watch companies currently making Made in America claims.
It’s that time of year where the Richemont-hosted Salon International de la Haute Horlogerie (SIHH) is over and onto Baselworld (primarily a Swatch-oriented event). SIHH featured some pretty neat watches, especially tourbillons, and a lot of watches made with non-traditional materials. Yet, what was offered seemed unattainable; a celebration of the unattainable in a year that consumers are spending less on watches and sales are cratering.
Watch price increases seem like they have been out of control. In this article, I resort to some basic principles of economics to look at the watch industry and analyze just how much prices have increased, specifically for Rolex. I have repeatedly said how fascinating the watch industry is — in this case, even exchange rates and inflationary adjustments across borders become interesting. I’ve broken these concepts down into digestible bits that bring these concepts from your Economics 101 class into perspective.
This is Article 4 of our 4-part series on Design & Innovation. TAG Heuer Monaco. Rolex Submariner. Omega Speedmaster. Breitling Navitimer. Hamilton Ventura. Audemars Piguet Royal Oak. Lange 1. Over the previous 3 articles, I have argued why design is the only realistic hope the watch industry has to draw new consumers and shift preferences. I explained why the heavy investment in new movements, in-house movements, and material science are neat but don’t have the power to actually draw new consumers. Finally, in the previous article, I explained what makes a watch icon and why icons have defined watch history and encouraged watch companies to turn towards design to make new icons. In this final article, I’ll write about the watches that were icons and what them an icon, showing how much of that focused on design. These weren’t icons because of some massive revolution in them telling time better, or some genius new material. They were icons because of design. And while these designs continue to capture consumer imagination, it’s time for another bold step in design from the watch companies. Who will make the leap?
Here is a round-up of the latest watch industry news:
Watchmakers hope for Trump economics rally (Financial Times) — US president-elect has proposed policies that could cut red tape and boost sales.
This is Article 3 of a 4-part series on Design & Innovation. Rolex Submariner. Audemars Piguet Royal Oak. Patek Philippe Nautilus. Heuer Monaco. Hublot Big Bang. Hamilton Ventura. Gerald Genta. Jean Claude Biver. These names all share a special bond that few others deserve to be associated with. These people or companies/designs took risks to make something new, something bold. Yet, despite great examples, very few watches or designers today introduce bold new watch designs that are a risk to any watch company.
This is Article 2 of a 4-part series on Design & Innovation. Design is the last meaningful frontier for watch innovation. The rest of the moves towards in-house movements, new materials, and new movements are all tilting at windmills and are being propped up by marketing. In this article, I will explain why most of the luxury watch industry is ’tilting at windmills’ with in-house movements or new material research and surviving off a marketing machine that isn’t sustainable. In the follow-up article I will cover some of the iconic and bold watch designs of history, and explain why design is literally the last frontier. You can read the first article of this series here where I introduced the concept of bold design being a chance to shift consumer preferences.
This is Article 1 of a 4-part series on Design & Innovation. What does it take to shift consumer preferences? A lot. My marketing professor at Harvard Business School used to always say “never underestimate the customer’s reluctance to change.” In today’s watch industry, many classic watches designed 50+ years ago continue to fascinate consumers and define expectations in watches. Yet, many of these companies are not exactly innovative either. While some see classic design, critics see lack of innovation. People naturally look to innovation in the mechanics of the watch, but this is hard to do and consumers can’t notice the changes. I will present a case for why design is the next revolution in the watch industry, and has a chance to shift consumer preferences back to the mechanical art.