MIL­LEN­NIAL DOL­LAR BABY

The watch and jew­ellery in­dus­try fights for its slice of the Gen­er­a­tion Z pie

Singapore Tatler Jewels & Time - - Feature - Text Ni­co­lette Wong

“Mil­len­ni­als and Gen­er­a­tion Z ac­counted for 85 per cent of the growth in lux­ury spend­ing last year.”

The be­hav­ioral habits and pref­er­ences of mil­len­ni­als seem vastly dif­fer­ent from pre­vi­ous gen­er­a­tions. The Fi­nan­cial Times noted that mil­len­ni­als (de­fined by the Pew Re­search Cen­tre as those born be­tween 1980 and 1996) are now the big­gest de­mo­graphic group in the world at 1.8 bil­lion in pop­u­la­tion, dwarf­ing even the baby boomer gen­er­a­tion, which num­bers 1.1 bil­lion. Mil­len­ni­als grew up in a time of tech­no­log­i­cal change, which greatly af­fected the avail­abil­ity of both in­for­ma­tion and so­cial net­works—wikipedia, the iphone, and of course, Face­book and In­sta­gram were all in­vented dur­ing their life­times. A Gold­man Sachs re­port sug­gested that mil­len­ni­als also have less dis­pos­able in­come and more debt than pre­vi­ous gen­er­a­tions. Cou­pled with the greater ac­cess to in­for­ma­tion about prod­uct qual­ity and cost, mil­len­ni­als are likely to search for brands that give them the most per­ceived value at a given price. The lux­ury must-haves for pre­vi­ous gen­er­a­tions are of lesser im­por­tance to mil­len­ni­als. How­ever, that does not mean that the lux­ury in­dus­try as a whole is doomed. Ac­cord­ing to the Business of Fash­ion, mil­len­ni­als and Gen­er­a­tion Z ac­counted for 85 per cent of the growth in lux­ury spend­ing last year. Since mil­len­ni­als are en­ter­ing the stage of their lives where they have the great­est spend­ing power, what has the watch and jew­ellery in­dus­try done to court them?

The an­swer: so­cial me­dia. Ac­cord­ing to Gold­man Sachs’ anal­y­sis of data (from the As­so­ci­a­tion of Na­tional Ad­ver­tis­ers, Barkley, Ser­vice Man­age­ment Group, and Bos­ton Con­sult­ing Group), 34 per cent of mil­len­ni­als agreed that they liked a brand bet­ter if it used so­cial me­dia. Just about every watch and jew­ellery brand has cot­toned on to this pow­er­ful tool to com­mu­ni­cate with their prospec­tive con­sumers di­rectly. A search across var­i­ous so­cial me­dia plat­forms in­di­cates that In­sta­gram is the de facto choice for most watch and jew­ellery brands with more fol­low­ers and a higher level of en­gage­ment than on any other plat­form. Case in point: Patek Philippe—it joined In­sta­gram only this March (co­in­cid­ing with the Basel­world fair) and has 151,000 fol­low­ers on In­sta­gram, com­pared to 22,500 on Youtube (where it started reg­u­larly post­ing videos only two years ago), and 5,600 on Face­book (with no con­tent but redi­rects you to its In­sta­gram page).

The power of In­sta­gram is no sur­prise—it is snappy and al­lows for the com­mu­ni­ca­tion of both images and facts about the brand’s his­tory or new re­leases in in­no­va­tive ways. Tif­fany & Co., for in­stance, has reg­u­larly cre­ated In­sta­gram-unique cam­paign images that are quirky, vis­ually ex­cit­ing, and con­ve­niently tagged with a shop­ping link. With 8.7 mil­lion fol­low­ers, that’s a lot of shop­ping to be done. The cham­pion of the In­sta­gram game, how­ever, is Omega. This past July, it launched its sec­ond “Speedy Tues­day” cam­paign, and took or­ders for an ex­clu­sive ver­sion of its fa­mous Speed­mas­ter en­tirely on In­sta­gram. A teaser was sent to its fol­low­ers mere hours be­fore the of­fi­cial launch. And it worked—all 2,012 pieces of the Speed­mas­ter Lim­ited Edi­tion 42mm “Ul­tra­man” were sold out within two hours. No in­ter­me­di­aries were in­volved, as col­lec­tors merely re­served their piece via a link in Omega’s In­sta­gram ac­count. “This is very mil­len­nial,” says Omega CEO Ray­nald Aeschli­mann

“We don’t do an In­sta­gram watch. We don’t do a watch that is a mil­len­nial watch. We are cre­at­ing the buzz around [the watches] by in­ter­est­ing [the mil­len­ni­als]” —

RAY­NALD AESCHLI­MANN

about the first “Speedy Tues­day” cam­paign in an in­ter­view with the South China Morn­ing Post. “This is a very new way— there was no In­sta­gram five years ago. But we are re­spect­ing [the mil­len­ni­als]. We don’t do an In­sta­gram watch. We don’t do a watch that is a mil­len­nial watch. We are cre­at­ing the buzz around [the watches] by in­ter­est­ing [the mil­len­ni­als]”

To speak about so­cial me­dia in a more mar­ket-spe­cific con­text, one must con­sider Wechat and Weibo— China’s most in­flu­en­tial so­cial me­dia net­work­ing plat­forms. A re­port by Digital Lux­ury Group mea­sured word-of-mouth per­for­mance across Wechat, Weibo, and Baidu (China’s most prom­i­nent search en­gine) at the be­gin­ning of this year’s Basel­world fair. Sur­pris­ingly, lux­ury mar­que Chopard came out tops, tak­ing nearly 60 per cent of all brand men­tions on Weibo, while Rolex and Omega topped Wechat and Baidu re­spec­tively. While these plat­forms might not be as pro­lific as In­sta­gram glob­ally, the iso­lated na­ture of China’s mar­ket (which does not use In­sta­gram nearly as much) re­quires spe­cial at­ten­tion from brands. And rightly so, as China’s 350 mil­lion mil­len­ni­als—a stag­ger­ing num­ber com­pared to 70 mil­lion in the Us—is ripe for the pick­ing.

While es­sen­tial, so­cial me­dia is not the only strat­egy that brands have em­ployed to woo mil­len­ni­als. Many have also en­gaged celebrity am­bas­sadors to court a tar­geted de­mo­graphic. In Omega’s case, it is the young Kaia Ger­ber, who will turn 17 in Septem­ber. She is not strictly a mil­len­nial her­self, but her ap­peal lends it­self to a young au­di­ence. (Her 3.6m fol­low­ers on In­sta­gram don’t hurt ei­ther.) Tu­dor has worked with the likes of Amer­i­can singer Lady Gaga, for­mer footballer David Beck­ham, and most re­cently, Tai­wanese singer Jay Chou, all of whom ap­peal to the mil­len­nial de­mo­graphic in dif­fer­ent ways. In the same vein, Pi­aget has Ryan Reynolds, Cartier has Jake Gyl­len­haal, and IWC has Bradley Cooper, and Tif­fany & Co. has Elle Fan­ning. Chopard’s afore­men­tioned suc­cess with the Chi­nese mar­ket also had much to do with its part­ner­ship with singer Roy Wang— an­nounced at the be­gin­ning of the Basel­world fair, co­in­cid­ing with the brand’s dom­i­nance on Chi­nese so­cial me­dia ac­counts. What celebrity faces can do is draw at­ten­tion to brands that have a dearth of younger con­sumers who might one day be­come true con­nois­seurs—af­ter all, ev­ery­one starts some­where.

And that start for many watch brands is churn­ing out en­try-level time­pieces to ap­peal to mil­len­ni­als. This strat­egy could also have been put into place to com­bat the soft mar­ket that the watch in­dus­try has been fac­ing in the last few years, but the ap­proach is likely two-pronged. In the last two years, high-end brands such as Pi­aget and Gi­rard-per­re­gaux have both in­tro­duced en­try-level col­lec­tions—pi­aget with

the Polo S, and Gi­rard-per­re­gaux with the Lau­re­ato. This year, Jaeger-lecoultre launched its re­vamped Po­laris col­lec­tion at an en­try-level, while Vacheron Con­stantin cre­ated the new Fiftysix col­lec­tion at a lower price bracket than its other of­fer­ings. As Gold­man Sachs re­ported, mil­len­ni­als are more price-con­scious than pre­vi­ous gen­er­a­tions, so they are more likely to bal­ance a watch’s per­ceived value against its price tag.

One can­not speak of price tags with­out men­tion­ing e-com­merce. Ac­cord­ing to the V12 data, 67 per cent of mil­len­ni­als pre­fer to shop on­line as op­posed to a phys­i­cal store. But the watch and jew­ellery in­dus­try has been slow on the up­take with e-com­merce. The con­sen­sus is that most con­sumers would not want to pay for a watch or piece of jew­ellery with­out first see­ing it in per­son. How­ever, some brands have taken the plunge, with lux­ury e-tailer Net-a-porter play­ing host to watches and jew­ellery from the likes of IWC, Jaeger-lecoultre, Pi­aget and Tif­fany & Co., while brother site Mr Porter car­ries a wider range, in­clud­ing Bell & Ross, Bre­itling, Mont­blanc, Ressence and Zenith. An­other on­line re­tailer, Far­fetch, which has ma­jor Chi­nese e-com­merce player Jd.com as an in­vestor, has also launched its watch and jew­ellery de­part­ment, with brands such as Bell & Ross, De Beers, Zenith, Gi­rard-per­re­gaux and Ulysse Nardin. While the jury is still out on who would pay those prices for a watch on­line, it is none­the­less true that the watches and jew­ellery pieces are all mov­ing quite briskly. Jean- Claude Biver, the leg­endary head of LVMH’S watch business, said at this year’s Basel­world fair that “[the watch in­dus­try] didn’t re­alise the speed at which mil­len­ni­als would take to buy­ing cars or watches on­line.” The truth is that there is no one win­ning strat­egy guar­an­teed to win the mil­len­nial dol­lar. The best ap­proach is likely one that both fits the iden­tity of the brand and com­mu­ni­cates suc­cess­fully to the mil­len­nial con­sumer. It’s a trial and er­ror game for now, but in a decade or so, the re­sults of var­i­ous strate­gies should be ev­i­dent—when mil­len­ni­als reach mid­dle age.

In­sta­gram is con­sid­ered an es­sen­tial com­mu­ni­ca­tions tool for watch and jew­ellery brands these days, with Patek Philippe be­ing the lat­est to cre­ate its ac­count this March

Omega’s Speedy Tues­day cam­paign on In­sta­gram saw its lat­est Speed­mas­ter Lim­ited Edi­tion 42mm “Ul­tra­man” sell out in ex­actly one hour, 53 min, and 17 sec

Many brands have cre­ated en­try-level pieces os­ten­si­bly tar­geted at mil­len­ni­als, in­clud­ing Gi­rard-per­re­gaux, which re­vamped its his­toric Lau­re­ato into a col­lec­tion span­ning 80 ref­er­ences

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