Swiss watch companies are facing a tough market with sales down 11% in 2016. RAYMOND WEIL is an affordable Swiss luxury watch company that is continuing to innovate themselves through this period, harkening back to the company’s DNA to look for new inspiration. RAYMOND WEIL and CEO Elie Bernheim have choices to make as they navigate this difficult slump in the Swiss watch market.
I had the chance to sit down in an exclusive interview with RAYMOND WEIL’S CEO, Elie Bernheim to discuss the state of the Swiss watch industry as well as his family’s company, RAYMOND WEIL. Elie is the third generation Weil family member to run this prestigious Swiss watch company alongside his brother Pierre, who both joined the company in 2006. Elie’s grandfather Raymond Weil founded the company 1976 during the height of the quartz crisis in Switzerland, where the new quartz watches were challenging the staying power and relevance of mechanical watches.RAYMOND WEIL has continued to innovate themselves as a company, entering new product categories and re-inventing their lines despite the challenges facing the luxury watch industry over the past 2 years.
RAYMOND WEIL’S DNA
Elie Bernheim stepped up as CEO in April, 2014. When it comes to watches, he is Swiss through and through. I asked him if he has one of every model of RAYMOND WEIL watches and he said “basically, yes”. He said he changes out the watch he wears every week or two (I can relate to this) and was noticeably very proud of every watch the company produces. Elie is a musician and music has always been part of the family. He is an accomplished cello player (though he assured me he is not very good at it — he has a professional diploma in Cello performance). Music is in his family’s DNA and it has become the core of the company. Elie will tell you music is the DNA of the company, but after speaking with him, I argue the DNA of RAYMOND WEIL is well beyond this — it’s family heritage. By this I mean, RAYMOND WEIL represents what it is to harken back to one’s roots; to wear something that represents the heritage of your family — your DNA. For example, RAYMOND WEIL produces the Maestro series which focuses on the music and rhythm of life. However, they also produce an amazing looking pilot’s watch called the Piper, which harkens to founder Raymond Weil’s personal skill as a pilot, flying Piper Dakota airplanes. The company may not represent aviation heritage, but they embody the DNA of family heritage including the founders love of music and love of aviation.
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Where RAYMOND WEIL Fits In
I frequently note that when you choose a watch, you are really choosing an identity or lifestyle for which you identify. For example, Breitling = Aviation, Bremont = Aviation, Jaeger LeCoultre = finest craftsmanship, Patek Philippe = Generational legacy, Rolex = Diving (among others), Longines = horse racing (seriously), and TAG Heuer = car racing. What does RAYMOND WEIL represent? Music would be a very strong vote, but again, I think they represent more than this. They represent the cherishing of a family’s history, of legacy, of a family’s DNA. When you wear RAYMOND WEIL, you are identifying with the brand’s connection to family heritage, to your heritage, to your DNA.
In the first article in this series on the state of the luxury watch industry, I outlined some of the challenges facing the industry and made suggestions the industry could implement. I asked Elie about some of these factors to get his thoughts. He said there is no doubt that the industry is being reshaped due to economic factors. Some of the factors he mentioned include the strong Swiss currency, but the overall effect of these factors and how deep they will cut remains a question that only time will tell. Elie said that keeping an eye on these economic factors “makes my job fascinating”, having to act as a part time economist as well as CEO. From RAYMOND WEIL’s perspective, they will be unaffected by the new “Swissness” law requiring 60% of production to take place in Switzerland; RAYMOND WEIL already exceeds this standard, but Elie did not deny this could deeply affect some other competitors who have abused the “Swiss Made” marquee by minimally meeting the current required minimum of 50% made in Switzerland. The changes to the law will force these producers to figure out how to change to 60%, which will invariably cost more money to produce.
Anytime there is consolidation within a fragmented industry, the consolidation can create uncertainty among industry players as each tries to fortify their own position. I asked Elie where he sees RAYMOND WEIL emerging in the next 5 years and his roadmap to get the company there. First, he said the United States is a major market for the company. Of their 150 worldwide employees, 35 of those are located in the US. Elie said that the US market has been and will continue to be a cornerstone of the company’s strategy going into the future. The vision he has set for the company revolves around 3 objectives: (1) quality and innovative product development while (2) maintaining an affordable price point, with a (3) focus on selling both mens’ and ladies’ watches. These might sound somewhat generic to any watch company, but having the chance to hear him elaborate, I think his objectives make sense and could chart a path forward.
Quality and Innovative Product Development
RAYMOND WEIL hasn’t just focused on their flagship Maestro and Nabucco collections. These are great looking watches, but RAYMOND WEIL has put a lot of effort into continuing to innovate. I asked Elie about their release of the Piper Pilot watch in 2015, which struck me as a curious move at the time given the company’s lack of presence within the pilot watch segment. Elie explained the watch is actually an homage to the company’s founder, Raymond Weil, who was an accomplished Piper Dakota pilot. Elie’s brother Pierre is also a private pilot of Piper aircraft. This made sense; family heritage is in the company’s DNA.
I have a strong affinity for pilot watches. I showed it to another pilot friend who described the watch as “sick!” Indeed it is, and apparently many others think so too. Elie said they have sold over 1,500 Piper Pilot watches and they are considering expanding the pilot line based on their unforecasted popularity in this segment. I asked him if they are considering creating a Squadron watch program similar to what Breitling, Omega, and Bremont do (this is where the watch companies customize the watch faces for military or airline pilots to order watches with their company or squadron’s logo on the face as well as call signs engraved on the back). Elie said the company doesn’t have a program as of yet, but is very familiar with the programs and is optimistic about the proposal.
Another innovative product Elie was excited about was their Beatles’ tribute watch that they introduced at the 2016 Baselworld Watch and Jewelry Show. This watch gets back to RAYMOND WEIL’s core music DNA with an innovative twist. He said the watch was extremely difficult to keep under wraps during development, but once announced at Baselworld, the company sold all 3,000 watches in 36 hours. This demonstrates that RAYMOND WEIL has an accurate read of the market possibilities, innovating what consumers want. It will be interesting to see what they have in development right now (I wish I could say he gave me some hints, but he did not).
Affordable Price Point
Elie is particularly proud of RAYMOND WEIL’s ability to provide a Swiss Made watch well above the 60% “Swissness” standard at a price point that is affordable. Elie believes accessibility is important and has made this an imperative for the company. The company produces the majority of their watches in the $800-$3,000 range, with their core business focusing on the $1,000-$2,500 price point. Elie is committed to maintaining prices within these ranges.
Equal Focus on Men’s and Ladies’ watches
There is an unfortunate gap in the ladies’ watch market. Many producers seem to produce a few token ladies’ watches as an afterthought rather than a primary market space. RAYMOND WEIL has gone against the industry by producing both and their sales are about equal between men’s (60%) and ladies’ (40%) watches. From a strategic perspective, this is a good imperative for the company, who has demonstrated their ability to operate in both market spaces with good success. The ladies’ watch market has a lot of room for growth. RAYMOND WEIL currently offers 40 ladies’ models on their website compared to 56 men’s watches (for comparison, their nearest competitor (my opinion) Longines offers 96 ladies’ watches and 127 men’s watches and a parallel-to-up-market competitor Breitling offers (from my best count on their website) 7 ladies’ and 65 men’s watches.
Maintaining relevance in today’s marketplace requires everything short of social media gymnastics. While watch companies were generally slow to adopt the use of social media, now watch companies use everything short of jumping monkeys on numerous social media avenues (to name a few: facebook, instagram, twitter, snapchat, pinterest, youtube). They don’t really use jumping monkeys, not yet, but maybe soon? Some of the watch companies are very progressive in their use of the internet and online advertising, sales, and social media marketing, while others have chosen to remain on the sidelines. L2 Inc is a company that analyzes industries and their digital usage where they assign a ‘Digital IQ’ (consisting of website usability, e-Commerce use, mobile/tablet penetration, digital marketing, and social media use). Some Swiss companies considered to have the strongest Digital IQ are Cartier, Breitling, IWC, and Rolex — no surprises there. The companies having some of the weakest Digital IQ’s are Breguet, A. Lange & Sohne, and Ulysse Nardin. L2 Inc ranked RAYMOND WEIL near the 50% percentile for their Digital IQ amongst other watch companies in their 2015 report (in good company with other distinguished brands such as Audemars Piguet, Vacheron Constantin, Hamilton, Patek Philippe, and Zenith).
RAYMOND WEIL has done some very innovative things within the social media marketing space. In 2007, they were the first luxury watch company to make an island in Second Life, an alter-reality videogame that reached its popularity in 2007-2010. They have worked hard to maintain many channels of social media, focusing on video content to highlight the features and quality of their watches. A digital presence strength that RAYMOND WEIL boasts (and exceeds the industry average according to L2 Inc) is its use of YouTube and Facebook. Elie acknowledged the company’s need to get better integrated into Instagram, which serves as a primary social media outlet for many watch companies. For comparison, RAYMOND WEIL has about 28,000 followers on Instagram at the time of this writing, while Audemars Piguet has 1 Million and Panerai and Jaeger LeCoultre each have almost 300,000 followers. Elie sees one of the primary focus areas of digital marketing strategy for the company is bloggers (such as Watch Ponder) who can tell the RAYMOND WEIL story with some authentic and honest approaches, giving potential customers a full 360-view of the company: what they do well, where they can improve, and the quality they bring.
Overall, RAYMOND WEIL seems to be establishing their niche as the industry continues to quickly evolve. Elie Bernheim has positioned the company well to continue to meet his three imperatives and has a clear path forward for continuing to innovate the company’s digital presence in a market that is increasingly reliant on a multi-faceted digital strategy. This can’t be said of many Swiss brands. Despite the impending consolidations within the industry, RAYMOND WEIL is anecdotally well-positioned to maintain their place in an increasingly competitive and difficult market.
Before we finished the interview, I asked Elie what watch he was wearing. He was sporting the RAYMOND WEIL Freelancer ref 7740-SC3-65521 with an automatic movement, white dial with blue chronograph dials, and tachometer bezel. It must be a tough choice when you manage a company producing amazing timepieces from the Beatles special edition to the Piper Pilot watch, and the Nabucco series. Although, it’s a dilemma I wouldn’t mind having.