How the pandemic changed the watch world forever

Marc Aspinall

As revellers celebrated and December 31, 2019 crossed into January 1, 2020, few had much concern for the novel coronavirus creeping through Asia. Even as cities in China started to go into quarantine, the watch industry kept a cautious eye on the situation, but when it came to plans for launches and exhibitions in the coming months, it was all very much business as usual.
However, as the weeks progressed and Covid-19 began to spread across the world, everything changed. Shows were cancelled, new watches were put on hold and country by country went into lockdown with bricks-and-mortar retail ceasing as stores rapidly closed.

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With watches that had been in development for many years, the notoriously staid watch industry had limited choices: get onboard with the digital world it had been so wary of, or go into indefinite shutdown. With the latter a non-option for any viable business, the transfer to online was effectively a fait accompli.
Watches were launched in hastily organised online “events” including Breitling’s Summit Webcast and a digital version of Geneva’s cancelled Watches & Wonders show, which pulled out all the stops to develop a virtual edition that, while lacking all the drama of a physical experience, at least demonstrated an adaptability not previously seen in the industry.
While some traditional brands, led by Rolex, stuck to their guns in refusing to sell online, others, including Patek Philippe, did, for the very first time, allow their retail partners to sell via e-commerce channels, because they had developed none of their own capability in this area, despite global e-commerce now being a $4 trillion industry.
For Richemont – the group behind Cartier, IWC, Panerai and a dozen-plus other watch brands – online selling was already familiar territory, both in terms of the brand’s own e-shops and marketplaces, Mr Porter and Watchfinder. For others, however, the race was on to find alternative ways to deliver.

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According to Bulgari’s CEO Jean-Christophe Babin, the Covid crisis has had a dual effect, with short-term plans speeding up and mid- to long-term plans slowing down. “Shops closed worldwide, compelling us to rethink our sales approach,” he says. “We already had e-commerce platforms in Japan, China and the US, but the crisis drove Bulgari to extend these operations to a wide number of markets. Globally, Covid-19 has contributed to modifying the mindset for luxury brands that were not keen on using e-commerce so intensively.”
Managing director of Bulgari’s watch division, Antoine Pin, confirms that lockdown generated an acceleration in e-commerce watch sales of between 100 and 300 per cent depending on the market, a pace that is continuing as the world starts to open up. But despite strong digital sales, Babin still does not believe that online will ever replace the bricks-and-mortar experience for top-end products, and emphasises that physical stores will remain the main channel for Bulgari. “Digital shopping is culturally established in Asia and the US,” he admits, “but you reach a limit when it relates to luxury products offered by a brand like Bulgari, which proposes a client experience through direct contact in-store.”
However, online sales of luxury goods, including watches, accounted for eight per cent of the global luxury market in 2018. By 2019, consumers were buying €33.3 billion worth of personal luxury goods online globally. McKinsey predicts online luxury sales to more than triple by 2025, accounting for one-fifth of all luxury sales. No matter the figures, the trend is clear.
Of course, one added barrier preventing some luxury brands from embracing digital commerce is it forces price transparency across countries. A Rolex Submariner Date in China, for example, will cost approximately $2,400 more than in Canada, which can be the result of various factors including local tax laws.

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For Zenith’s CEO Julien Tornare, however, the pandemic was an opportunity for the watch world to demonstrate just how adaptable it can be. Already committed to a reasoned move into e-commerce, including the brand’s digital On Air forum that has given consumers direct access to brand executives and partners like never before, he believes that innovation and flexibility in reworking the company strategy and action plan came to the fore during lockdown. For Tornare, the crisis accelerated the brand’s plans by at least a year and he intends to build on the creative effort that has gone into digital communication with employees, clients and retailers over the past months.
“Just a year ago, who would have thought we would be receiving orders via Instagram?” he says. “But in today’s world, if you want to be a dynamic, innovative brand, e-commerce is so important. The Swiss watch industry tends to be very conservative, but even the most conservative had to move on in this crisis.”

In 2017, Omega’s #SpeedyTuesday Speedmaster watch, limited to 2,012 pieces, sold out through Instagram in less than five hours
Omega

However, Instagram watch sale events are not new, and the signs of a willing consumer appetite for digital purchases of luxury watches were there for all to see some years ago. In 2017, Omega’s first Speedmaster #SpeedyTuesday limited edition of 2,012 pieces sold out in less than five hours (though, tellingly, it was sold through Omega’s own Instagram page). When the second #SpeedyTuesday watch, the Ultraman, went on sale online in July 2018, it sold out all 2,012 units in less than two hours. At the end of April, Omega announced it was to extend its e-commerce platform across Europe, having previously only sold watches online in the US and UK.
Hublot, another LVMH brand finally joining the e-commerce revolution, admits to fast-tracking the online strategy it was already working on due to the effects of the pandemic and the enforced closure of approximately 90 per cent of its retail network. Launched in June to coincide with the new Big Bang e connected watch, more and more watches have been added to the e-shop on the Hublot website with CEO Ricardo Guadalupe saying earlier this year that the real test of online success will come when traditional retail outlets reopen.
Identifying that, at the start of the crisis, only five per cent of the hard-luxury market had direct e-commerce channels, Patrick Pruniaux, CEO of Kering-owned Ulysse Nardin and Girard-Perregaux committed early to take the leap into digital selling, saying: “As sales in brick-and-mortar could not happen, launching online stores was crucial for companies such as ours.”
“The problems we’re facing in the watch industry are the same problems of almost all luxury businesses in the world today. It’s too early to know what the end result of the pandemic will be for the industry, but one key lesson is coming into sharp relief: no brand should neglect their customers closer to home or their e-commerce platforms.”
For David Edwards, managing director at Seiko UK Limited, offering e-commerce to clients was already a priority, with lockdown providing the perfect catalyst to begin trading Grand Seiko online for the first time in Britain, alongside wider Seiko collections. According to Edwards, “we focused on improved availability and brand information, and we ensured that we maintained ‘boutique level’ personal communications with our clients. We also broadened our online payment systems and introduced special pre-release opportunities for our boutique clients to reserve and pre-order online.”
Promoting Seiko’s boutique manager to digital marketing manager brought continuity of knowledge to online and the results are clear: between 1 April and 30 June 2020 more online sales were generated than in the previous 12 months combined. For Edwards, the challenge ahead will be “establishing consistency between our boutiques, wholesale partners and digital platforms to ensure our clients can experience Grand Seiko and Seiko in whatever way suits them best.”
And, therein seems to lie the immediate future of British watch retail. While many physical outlets, from Patek Philippe’s Bond Street Salon to Breitling’s luxurious new Regent Street Townhouse and Watches of Switzerland’s boutiques nationwide, have reported lower footfall than in previous years, they have also suggested higher sales conversions.
And, while there is optimism that bricks-and-mortar retail will pick-up in the coming months, the financial, technical and personnel investment that has been made in digital sales and marketing, plus new consumer expectations, means that the genie is well and truly out of the bottle. When it comes to e-commerce, the watch industry as a whole is past the point of no return.
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