The luxury watch industry is in one of its biggest slumps in recent history after experiencing years of unprecedented wealth and growth. Is it a result of the economy? Is the industry dying overall? Will the industry fade away forever? How will companies make it through the slump? Who will emerge on the other side? Over the next two months, we will release a 15-article, three-part series devoted to the following topic:
Disruption? The future of the luxury watch industry
Title photo credit: these watches were provided and photographed by the European Watch Company, a leading used watch retailer in Boston, MA.
In January 2017, the Swiss government will implement a new standard, one that requires watch producers to meet a 60% Made-in-Switzerland standard. This is a choice, a choice in an industry that has been shaped by a series of choices and fate throughout the 400 years of watchmaking. They were not always the leaders. Other countries either dominated the industry or appeared to be taking the helm on numerous occasions since the year 1600: Germany, Britain, Switzerland, the United States, and then Switzerland again. Switzerland became the epicenter of watchmaking through a series of fateful events and series of choices of Switzerland and other countries.
Choice: “the opportunity or power to choose between two or more possibilities: the opportunity or power to make a decision”
Fate: “the will or principle or determining cause by which things in general are believed to come to be as they are or events to happen as they do. [See] Destiny”
Fate has also played a part in shaping the Swiss industry throughout history, with wars, economic depression, religion, and strokes of luck shifting the watch industry to and from different countries. The question is: where will fate and choices take the watch industry in the next 10 years? How will other players’ choices reshape the industry? To think that Switzerland will survive as the watchmaking capital “just because they are the standard for watches” is to ignore history. The Swiss have only dominated the industry as the “gold standard” for the last 150 years. Even then, they were almost reduced to irrelevance by a boom in American watchmaking in the 1870’s or the “Quartz Crisis” in the 1970’s.
Today, the Swiss watch industry is facing the ‘enemy at the gates’ between suppressed economic conditions, the rise of smartwatches and technology, and a boost in confidence of non-Swiss producers. 5 years ago, taxi drivers felt secure in their future and few of us had ever heard of Uber and Lyft; now a taxi medallion, once worth over $1M is worth a lot less (or at least now selling for 50% of their previous value).
In 2013, Swiss watch companies were producing more watches than ever. By 2015, the Swiss industry was not growing anymore; they exported less in 2015 than they did in 2013. Now in 2016, they exported less than they did in 2015. (See one-page summary of the Federation of the Swiss Watch Industry report here). In 2017, disruption knocks on the door. Will it enter the luxury watch industry? Will it shift the industry once again? What choices will Swiss watchmakers make? What part will the global economy, politics, and climate play in determining fate?
This series will weave a curious and interesting path over 15 different articles. In preparation for these posts, I have interviewed the CEOs of some very prestigious watch companies who provide exclusive and unique insight on the topic, researched source documents dating back to the 1800’s, and consulted with industry experts.
- We will start by looking at the the industry today, including the major players and the new players entering the industry across the world, and the economic challenges facing the industry.
- We will then look at new competitors and new centers of production entering the industry, and where the future of the industry might go.
- We will close the series by looking back at history. How did Switzerland become the epicenter of watch production? What choices and turns of fate led them there?
- You can then decide for yourself if the choices being made today and the fateful events happening across the globe are shaping the industry for another a disruption or relocation?
PART 1 – Fate and Choices
- Tempting Choices or Tempting Fate? The Swiss watch industry today (READ HERE)
- Choices: Raymond Weil on what it means to be Swiss Made featuring Raymond Weil CEO Elie Bernheim (READ HERE)
- Fate: Will people always prefer Swiss Made? (READ HERE)
- A Series of Choices and Fate: how innocent decisions and fate led to the rise of Swiss dominance in the watch industry prior to 1870 (READ HERE)
PART 2 – The Next Disruption?
- America’s Disruptive Watchmaking Heritage: the rise and fall of Waltham & watchmaking in America 1850 – 1950
- Reviving Disruption: Vortic Watches & restoring the glory of American Made featuring CEO RT Custer
- Seismic Movements: Niall Luxury watch company and their growth of U.S. luxury watch manufacturing in Kansas City featuring CEO Michael Wilson