Story Highlight
– Swiss watchmakers misunderstand consumer priorities, risking demand.
– Consumers prioritize price-to-value, not just new products.
– Emotional connection to watches overrides technical innovation desires.
– Consumers prefer multi-brand retailers over mono-brand boutiques.
– Physical retail remains crucial for watch purchasing decisions.
Full Story
Swiss watch manufacturers face significant challenges in addressing consumer preferences as they seek to revive interest in their brands following a downturn in sales over the past three years. Recent findings from Deloitte highlight a mismatch between the priorities of industry leaders and those of the consumer market, emphasizing the need for strategic adjustments.
Deloitte’s research entailed extensive interviews and questionnaires with executives in the watch sector, combined with insights from a survey of 6,500 consumers across thirteen countries. Results reveal that considerable resources are being directed towards initiatives that consumers find less compelling, particularly in regard to the ongoing introduction of new models—which consumers often overlook—as well as continuous price hikes.
For many brands, launching new products is a key strategy, especially as they navigate a market where demand has softened. “Every time you launch a new product, you get some traction. People are thinking about you, and that’s what you need,” stated Karine Szegedi, Managing Partner at Deloitte’s Consumer and Fashion & Luxury division, during her presentation at Geneva Watch Days.
The sentiments expressed by industry executives show a marked shift since the peak demand observed post-pandemic. In 2023, the watch sector is grappling with challenges including labor shortages, supply chain issues, and increased costs, with significant apprehension surrounding both domestic and global demand.
However, what consumers desire may not align with the ongoing push for new product releases. Deloitte’s survey highlights that the primary concern for consumers when selecting a watch is the price-to-value ratio, ranking first among fifteen different criteria surveyed. Brand reputation and design follow closely behind in importance.
“It’s the first out of like 15 criteria,” Szegedi noted, elaborating that consumers are looking for a balance between affordability, brand prestige, and aesthetics.
Moreover, there exists a distinct difference in how the watch industry discusses innovation compared to consumer sentiments. While Swiss manufacturers emphasize research and development as a priority, consumer feedback indicates a more emotional attachment to their watches. Nearly a third of respondents still value a watch primarily for its timekeeping function; however, most associate their purchases with personal significance, such as self-reward or stylish expression.
“They buy it because they want to look good. Because it’s an accessory, because they want to reward themselves [for] a special moment,” Szegedi explained, noting a trend where watches are now seen more as personal artifacts than mere tools.
The report also sheds light on the divergent views regarding retail strategies. While Swiss watchmakers have focused on establishing exclusive mono-brand boutiques in recent years, consumers show a preference for multi-brand retailers. Szegedi observed, “The consumer doesn’t necessarily like the mono-brand store. They like the multi-brand because it allows you to test and compare different brands, offers price variations, and provides a wider selection.”
Despite the discrepancies in retail preferences, both industry executives and consumers agree on the continuing significance of physical retail spaces. Over 70% of surveyed executives anticipate that in-person sales will outpace online sales in five years’ time—a viewpoint echoed by consumers who prefer to interact with high-priced items in-store.
“The watch is often you research online, but you buy in store because you want to see the weight, you want to see the size,” concluded Szegedi, underscoring the necessity for brands to adapt to consumer behaviors in order to foster growth in a shifting market landscape.
