a dealbreaker for watch sales? – FHH Review

Recent discussions in the Swiss watch industry suggest that smartwatch sales are as much of a threat to its future as Japanese quartz watches were in the late 1970s. Some will argue that we should only compare similar things. and that a mechanical watch – an authentic and emotional product resulting from four centuries of expertise and tradition – has no place in the same bag as a “smart” watch which is really only a placeholder for the next upgrade, and whose main merit is to convince its wearer that he really needs an authentic and emotional product resulting from four centuries of expertise …

From emotional to random

Beyond the fact that a Swiss mechanical watch is a totally different product from a connected watch, and that the two convey fundamentally different values, the numbers are essential. While Apple refuses to break watch sales into its profits, volume figures reveal that in 2019, the Cupertino company shipped more timepieces than the entire Swiss watch industry. In just six years, Apple has become the world’s leading “watchmaker”, selling more than 30 million Apple Watches in 2020. This is exactly the reverse of the situation in Switzerland, where the decline in export volumes is becoming worrying. . . From 28 million units in 2015, the number of Swiss watches shipped to international markets fell to 20 million in 2019 and continues to decline. H1 2021 results show shipments contracted 30.4% to 7 million units compared to the same period in 2019 (2020 is not a reliable basis for comparison due to the global pandemic) .

Apple Watch Series 6 Hermès

It’s not just tradition versus technology. There is also a gap between the economic model of Swiss watchmakers and that of electronics giants, such as Apple, which rely on innovation. The main Swiss watch brands offer products in all categories and sizes and, to put it bluntly, aside from small distinctions in design and a handful of icons, what sets one manufacturer apart from another isn’t immediately. obvious. “Most Swiss watches are sold in a multi-brand environment with history and craftsmanship as the main differentiators. But when every brand sells history and craftsmanship, from a consumer perspective, there is no differentiation, ”comments Daniel Langer, professor at Pepperdine University in Malibu, Calif., And CEO of Equité luxury strategy consulting firm. “Even their advertising approaches are basically the same, relying on celebrities and key opinion leaders. As products and their stories become more and more similar, even at a high quality level, consumers find it difficult to distinguish the reason for buying a specific brand. What should be an emotional choice becomes an almost random decision.

A sales model with no future?

Daniel Langer is no longer convinced by the retail model of Swiss watch brands, which he describes as “one of the worst customer interactions of any industry”. Because the sales model is geared towards making a transaction, the majority of brands fail to build long-term relationships with their customers outside of the occasional newsletter. They spend a fortune on advertising in order to make a sale that effectively ends the connection with the customer. It is, according to Langer, a model that “has no future and stands in stark contrast to Apple’s model of building a branded platform and constantly interacting with consumers, delivering an experience. fully integrated, engaging and inspiring digital and physical retail store. Not to mention the additional digital services that come with every Apple Watch, such as health and fitness trackers and contactless payment. “Once you get used to it,” Langer says, “you never go back. Certainly not to a mechanical watch.

Naomi Osaka x TAG Heuer

Alexandre wehrlin is director of the European Business School Geneva. He regrets that watch brands, whose products are at the cutting edge of technology, do not demonstrate the same level of innovation in their customer relations. So, Swiss mechanics or smart? For Millennials and Gen Z, whose purchases are driven as much by the amount of money in their wallet as anything else, it could all come down to the customer experience.

Floyd N. Morlan