The watch industry has gone through many paradigm shifts.
From the invention of the first pocket watch in the sixteenth century to the creation of the tourbillon in the 1800s, or the development of quartz technology in the 70’s, each era came with its unique set of challenges.
In today’s digital era, the watch industry is once again face-to-face with a major disruptor. To survive in this new playing field, it will have to roll up its sleeves and refine its identity in tomorrow’s digital game.
Digital Marketing for Dummies
When it comes to digital marketing, Swiss watch companies are not renowned for being at the forefront of innovation. A headquarter at la Chaux-de-Fonds, Le Brassus, Biel or Neuchâtel is not particularly exposed to the paradigm shifts in the digital arena. On the contrary, these companies have thrived in isolation for centuries because they kept long-lasting watchmaking traditions alive, passing along the skills, knowledge and savoir-faire from one generation to the next.
This irreversible digital revolution is forcing the watch industry to readjust quickly or it risks to face major consequences.
While these digital forces have created new opportunities for many companies to capitalize on early adoption of new digital marketing trends, most companies are challenged by today’s digital landscape as they have shown up late to the party.
Some watch brands may have heavily invested in R&D, but have not put the same financial investments into digital marketing and social media presence. As David Bredan explains in A Blog to Watch, ”Keeping on top of all that requires as much effort, as many skills, and as much investment as does the manufacturing of the product itself and, in some cases, even more than that.”
In their defense, the digital world is a moving target in which the younger generation change platforms almost as quickly as they are created, but it is exactly these challenges that will create new opportunities.
The Swiss watch industry, thus far, has been able to adapt to the global forces that transformed the industry. For the first time in history, however, they now have to adapt to a new kind of threat that goes beyond the creation of watches.
The Second-Hand Market Seizes the Online Opportunity
The lack of digital initiatives from the overall Swiss watch industry has created opportunities for the grey-market, or secondary-market, to disrupt the timepiece market.
Unofficial online resellers are planting their seeds throughout the online marketplace, leaving little oxygen for authorized dealers. In fact, according to L2 Gartner, the luxury gray market sellers captured 40% visibility in search results. This impressive presence of unofficial e-tailer is a testament to the Swiss manufacturers' lack of initiatives in the digital world. To complement the growth of the secondary watch market, second-hand watches are becoming the ‘new new’ for watch collectors.
Online platforms selling pre-owned watches have been booming, creating new incentives to buy sought-after watches at a fraction of the price. After all, why would someone purchase a watch through an authorized dealer, when he can buy the exact same watch at a 30-40% discount rate on new luxury watches?
The creation of new supplies in the grey-market, along with the new demand for discounted prices, are once again, creating a major shift in the horological industry. Audemars Piguet Chief Executive Francois-Henry Bennahmias puts it, “second-hand is the next big thing in the watch industry.”
As innovative as the Swiss watch industry is, it has shown signs of dust in the digital sphere. The watch industry will only keep ticking for as long as it keeps up with the pace of change, and adapt to today’s digital era. This robust industry will have to once again look at itself in the mirror to find new growth opportunities in the digital space.