Late to the Party
Watchmakers are finally going online in a bid to jump-start sales. But with boutiques closing around the world because of Covid-19, what does this mean for collectors?
From augmented-reality filters that let you “try on” watches to virtual sales assistants offering up-to-date advice, today’s use of technology by watchmakers is striking for an industry that has famously clung to tradition. Even before the coronavirus outbreak, high-end watchmakers were struggling, particularly towards the end of last year after months of pro-democracy protests in Hong Kong, which is an important market for Swiss timekeepers. So when governments imposed Covid-19 lockdown measures just a few months later, the brakes were well and truly put on “Swiss Made” watchmakers everywhere.
For Giles English, co-founder of aviation-themed watchmaker Bremont, the numbers are impossible to ignore. “The industry has been badly hit,” he says, “but it will certainly recover.” Watch exports plummeted by more than 20 per cent in March compared to last year, according to a report released by the Federation of the Swiss Watch Industry (FHS). Another study by private investment group Bank Vontobel predicts that exports will decline by 25 per cent in 2020, exceeding figures from the legendary quartz crisis of 1975 (down 15.2 per cent) and the more recent 2009 financial crisis (down 22 per cent). But don’t worry, your pocket-sized investments are still safe. That same report predicts that exports will bounce back by about 15 per cent in 2021.
“The industry hasn’t been brought to a standstill,” says Tim Malachart, marketing director of Richard Mille. In March, the pandemic resulted in the forced closures of watchmaking factories for several weeks. Now that manufactures have resumed production, Malachart reveals business is as good as ever. “We’re experiencing the same number of new orders as we did pre-covid and none of our existing orders have been cancelled.” Richard Mille designs some of the world’s most complicated mechanical timepieces. Especially ambitious is the brand’s new RM 11-05 Automatic Flyback Chronograph GMT. An ultralight limited edition, which was launched just last month, its rectangular case hugs the wrist and comes with a 24-hour flyback chronograph, which is used as a stopwatch.
“Since the crisis began, I’ve actually seen an increase in the interest in watches,” agrees English, and this year’s online auctions provide further proof. Sotheby’s first two virtual watch sales totalled an impressive US$2.2 million, during which 95 per cent of lots were sold, with over half achieving prices above their estimates. A 2014
Patek Philippe Nautilus went under the hammer for a costly US$484,000, and a Rolex Paul Newman Daytona, circa 1968, was picked up for US$306,518. And with many collectors still unable to visit boutiques in person because of social distancing restrictions or store closures, brands are finally waking up to the benefits of online commerce.
Companies including Breitling and Jaeger-lecoultre are opting for the Youtube or Zoom equivalents of a news conference. Panerai and Omega have unveiled their own series on Instagram Live and in May, IWC Schaffhausen opened its first Virtual Boutique, a 360-degree digital reproduction of its flagship store in Singapore. H Moser & Cie launched an e-commerce platform two weeks into Switzerland’s lockdown. “In the last three months, 20 per cent of our revenue has been online,” says CEO Edouard Meylan. “We’ve sold watches that are priced over US$80,000. I’d never have expected that.”
This e-commerce revolution would have happened regardless of Covid-19, says Malachart. “The pandemic has forced all of us to move quicker than we might have done otherwise. Sure, some people still prefer to physically view timepieces at trade shows, but younger buyers almost always make their purchases online. They rarely go to stores or factories to see watches in the flesh.”
We know what you’re thinking: why has it taken so long for watchmakers to come around to e-commerce? In their defence, a number of brands added shopping carts to their websites years ago. Cartier, for example, has been on the internet since 2007, and Montblanc since 2011. But watchmaking is still largely reliant on store sales, with FHS reporting that only 5 per cent of new watches are bought online.
Why is this? Watchmakers have struggled to shake preconceptions that the internet is a discount emporium exploding with counterfeits and illegitimate dealers. And while it’s pretty easy to buy a watch on the web, one of the greatest illusions of horology is that it’s an exclusive club. It’s a world weighted with complicated terminology and, in some cases, snobbery. It can intimidate potential collectors. To combat this, English believes that an online concierge team is important to a brand’s e-commerce
We know what you’re thinking: why has it taken so long for watchmakers to come around to e-commerce?
success. Their expertise and experience saves collectors time and, quite frankly, stress.
Like most of the questions surrounding Covid-19, only time will tell how the pandemic will impact watchmakers and their clientele. Chances are prestige brands including Patek Philippe and Audemars Piguet will ride out the storm without much damage. “There will always be a love for well-made mechanical watches,” says English. “These pieces last a lifetime and anything that stands the test of time is something that people are willing to invest in.”
But there’s also no doubting that online sales will be pivotal to the industry’s recovery. We have to shed the assumption that a brick-and-mortar experience complete with champagne flutes and white-glove service is the only worthwhile way to buy our watches. When all is said and done, there’s plenty of time for that afterwards. “Watches are long-term financial and emotional investments,” says Meylan. “In times of crisis, those kinds of products act as symbols of hope for the future.” And who doesn’t need a little bit of hope every now and then?