VIR­TUAL RE­AL­ITY

In a tra­di­tion­ally cautious in­dus­try, sell­ing lux­ury watches on­line is a rapidly grow­ing trend that looks set to stay.

The Peak Selections: Timepieces - - The Digital Revolution - TEXT Y-JEAN MUN-DELSALLE

In a fast-changing world, con­sumers are no longer shop­ping like their pre­de­ces­sors. In the last 15 years, we have wit­nessed the enor­mous rise of e-com­merce, thanks to the growth of a younger, ul­tra-con­nected gen­er­a­tion that in­creas­ingly does ev­ery­thing via their mo­bile de­vices, whether they are buy­ing gro­ceries, ap­parel, elec­tri­cal goods and fur­ni­ture, or book­ing hol­i­days. The lux­ury mar­ket, with its pricier of­fer­ings, has taken longer to en­ter on­line re­tail as it has had to main­tain the sense of exclusivity re­flected in the value of its prod­ucts, but en­ter it has.

Man­age­ment con­sul­tancy Bain & Com­pany re­ports that the mar­ket for on­line lux­ury goods grew 13 per cent in 2016 alone. E-com­merce dou­bled its share of the lux­ury mar­ket be­tween 2012 and 2015, up to 7 per cent, and con­sul­tancy McKin­sey & Com­pany ex­pects this to rise to 18 per cent by 2025, reach­ing 70 bil­lion eu­ros (S$113 bil­lion). More specif­i­cally, on­line lux­ury watch sales in 2016 were es­ti­mated at just over 3 per cent of the watch mar­ket, ap­prox­i­mately 1.1 bil­lion eu­ros – dou­ble its share from three years ago.

The watch in­dus­try has been slow to the game, as ex­ten­sive in­vest­ment in own-brand bou­tiques world­wide and long­stand­ing re­la­tion­ships with ma­jor re­tail­ers mean that it is cautious about dis­rupt­ing tra­di­tional sales mod­els. Then, there is the dis­con­nect be­tween the grad­ual evo­lu­tion of high­end horol­ogy and the fast-paced cy­cles of con­sumer tech­nol­ogy. How­ever, savvy CEOs such as Tag Heuer’s Jean-Claude Biver are clearly aware that they may lose ac­cess to an en­tire gen­er­a­tion of con­sumers with­out an e-com­merce pres­ence in an in­creas­ingly om­nichan­nel re­tail en­vi­ron­ment.

Tag Heuer be­gan sell­ing on­line through key re­tail­ers in 2009, be­fore sub­se­quently open­ing its e-shop, to­day avail­able in the US, the UK and Australia. These chan­nels gen­er­ate slightly less than 10 per cent of the brand’s global rev­enue. Biver states: “We have a very strong fo­cus on on­line. It is by far the fastest-grow­ing chan­nel, and al­ready rep­re­sents very solid num­bers. Con­sumers shop on­line more and more, and it will only ac­cel­er­ate, as mil­len­ni­als and dig­i­tal na­tives are en­ter­ing the Swiss lux­ury watch mar­ket only now. By 2020, our goal is to do 10 per cent of our to­tal busi­ness on Tagheuer.com, and an­other 10 per cent on re­tail­ers’ web­sites.”

Other es­tab­lished brands that have taken the plunge rather than wait­ing on the side­lines in­clude Bell & Ross, Cartier, Chopard, Jaeger-LeCoultre, Mont­blanc, No­mos Glashutte, Pi­aget and Re­bel­lion, which sell through their own e-shops. Around three dozen Swiss com­pa­nies now have their own on­line re­tail out­lets, while only three years ago, that num­ber was much smaller.

Ma­ture and ge­o­graph­i­cally large, the US mar­ket has been the obvious e-com­merce test­ing ground for sev­eral brands. Bre­itling be­gan sell­ing on­line by of­fer­ing 48-hour de­liv­ery across the US. Two other brands with US-only on­line sales are Bulgari and Pan­erai, which re­tail a core se­lec­tion and keeps some mod­els for its bou­tiques only. Jaeger-LeCoultre started sell­ing its watches on­line in the US in 2012, sub­se­quently ex­pand­ing to

Europe, China and Ja­pan, thanks to ex­cel­lent re­sponse. On­line clients, ap­par­ently, came from ar­eas where the brand both did and did not have an ex­ist­ing re­tail network.

Cartier de­buted its e-shop in 2009 in Ja­pan, fol­lowed by the US a year later, sell­ing all watches ex­cept ex­cep­tional cre­ations and limited edi­tions. For the Sin­ga­pore mar­ket, it started on­line re­tail in Oc­to­ber 2016, and re­sponse has been pos­i­tive. Gregoire Blanche, who was un­til re­cently Cartier’s man­ag­ing di­rec­tor for South-east Asia and Ocea­nia, had said: “We will be in­creas­ing in­vest­ment in this area. Not only do we ex­pect a large con­ver­sion to dig­i­tal, but we be­lieve that it will bring new seg­ments of clients and greater con­ver­sion through­out all our net­works.”

NOT GO­ING IT ALONE

Just as in phys­i­cal re­tail, how­ever, some brands choose to sell on­line solely through multi-brand watch re­tail­ers rather than di­rectly through their own e-shop – at least for now. Gi­rard-Per­re­gaux, for in­stance, favours a long-term and ex­clu­sive re­la­tion­ship with its re­tail­ers, and is there­fore avail­able through web­sites like The Watch Gallery. Hublot is sold on the Web via re­tail­ers such as Jo­mashop and Time of Switzer­land, and has no plans to sell di­rectly on­line, to avoid can­ni­bal­is­ing its re­tail­ers.

In­ter­est­ingly, fash­ion e-com­merce sites have been no­tably vis­i­ble in mak­ing se­ri­ous watches avail­able to a larger au­di­ence, many of whom might not have con­sid­ered own­ing them be­fore. Owned by Richemont and Ital­ian fash­ion e-tailer Yoox, lux­ury fash­ion e-com­merce gi­ants Net-a-Porter and Mr Porter have been pop­u­lar multi-la­bel des­ti­na­tions for watch brands, big and small. And it’s not just Richemont-owned brands that have added their pieces to these e-tail­ers’ cat­a­logues; Mr Porter, for in­stance, cur­rently stocks Richemont brands like Mont­blanc and IWC, as well as non-Richemont names like Bre­mont, Ressence, Zenith, and Bell & Ross.

In Novem­ber 2016, IWC an­nounced Net-a-Porter and Mr Porter as its first on­line-only out­lets, be­com­ing the first lux­ury watch brand with a per­ma­nent pres­ence in the two e-stores, sell­ing a cu­rated se­lec­tion from each of its prod­uct fam­i­lies. Dur­ing the SIHH watch fair in Jan­uary 2017, cus­tomers could buy se­lected ref­er­ences of the new Da Vinci col­lec­tion on the IWC web­site and col­lect their pur­chases from an IWC bou­tique, or via Net-a-Porter de­liv­ery – be­fore reg­u­lar sales be­gan in April.

For Mont­blanc, Mr Porter, and not its own bou­tiques, was the launch pad for its Sum­mit smart­watch col­lec­tion in May 2017. The part­ner­ship was so suc­cess­ful that the brand has ex­panded its of­fer­ings on the menswear site to in­clude time­pieces from its Time­walker, Her­itage Spirit, Her­itage Chronome­trie and 1858 col­lec­tions. With a cur­rent an­nual pro­duc­tion of 300 time­pieces, small in­de­pen­dent brand Ressence has sold more than 30 pieces on Mr Porter since 2015. DIF­FER­ENT AP­PROACHES Just as the In­ter­net has changed the face of re­tail, it has also opened up a mul­ti­plic­ity of sales chan­nels on­line. Top in­flu­encers and so­cial me­dia have been a pow­er­ful part of the equa­tion. Founded in 2008 by Ben­jamin Cly­mer, US-based on­line watch mag­a­zine Hodin­kee has launched five limited-edi­tion, co-branded time­pieces that sold like hot­cakes, to­talling US$3.04 mil­lion (S$4.13 mil­lion) in rev­enue. For each, Hodin­kee had a hand in its de­sign. Its first such foray in 2015 saw all 10 pieces of the MB&F LM101 (US$52,000) sell out within five hours. Most re­cently,

20 Ressence Type 1H Limited Edi­tions (US$22,500) were pur­chased in 21 min­utes.

Other top on­line in­flu­encers have helped to drive sales in dif­fer­ent ways. In 2012, Robert-Jan Broer, founder of the Fratello Watches blog, cre­ated the hash­tag #SpeedyTues­day – a ref­er­ence to Omega’s iconic Speed­mas­ter model. This hash­tag had been used over 41,000 times on In­sta­gram, when Omega an­nounced a new lim­it­ededi­tion time­piece com­mem­o­rat­ing the fifth an­niver­sary of #SpeedyTues­day. In Jan­uary 2017, Omega had its first-ever taste of di­rect on­line sales with the Speed­mas­ter “Speedy Tues­day” Limited Edi­tion, in­spired by a 1978 model cre­ated for Nasa. It har­nessed so­cial me­dia to boost sales and di­rect cus­tomers to the Omega web­site, where or­ders could be placed for the watch. All 2,012 pieces were bought in just over four hours.

Omega pres­i­dent and CEO Ray­nald Aeschli­mann ex­plains the com­pany’s dig­i­tal re­tail strat­egy: “It will def­i­nitely be a part of our fu­ture, but we are not rush­ing into it be­cause we want to get it right. It will be in­tro­duced on a mar­ket-by-mar­ket ba­sis. I’m not sure about a large con­ver­sion of sales to dig­i­tal, at least in the short term, be­cause buy­ing a watch is still a very hand­son process. Peo­ple like to come into our bou­tiques and ex­pe­ri­ence how the watch looks and feels on the wrist.”

High-end time­piece buy­ers, it seems, are com­ing around to the no­tion of pur­chas­ing watches on­line – but slowly. Long-time Sin­ga­pore-based col­lec­tor Dr Melvyn Teil­lol-Foo prefers buy­ing time­pieces at phys­i­cal stores as he be­lieves that no pho­tos or videos can truly cap­ture how a watch looks and feels in real life. How­ever, he re­cently bought three watches on­line for the first time: the Zenith Cronometro Tipo CP-2 special edi­tion cus­tom-made for PuristSPro for its 15th an­niver­sary, as he has been a mem­ber of this on­line watch com­mu­nity for years; and two time­pieces by Mont­fort, a brand that he helped to fi­nance via the crowd­fund­ing plat­form Kick­starter. He de­scribes his ex­pe­ri­ence: “I liked the ease and po­ten­tial sav­ings. It re­quires a lot of trust in the designer and watch­maker that the prod­uct will be as good as they say. For very well-known, mid-priced or in­ex­pen­sive Kick­starter watches, the on­line route may be ad­e­quate, with min­i­mal risk. Above that, I need to be in a real store with real peo­ple, for real watches.”

Some play­ers be­lieve it is just a mat­ter of time be­fore peo­ple come around. Hodin­kee’s di­rec­tor of watch sales, Louis West­phalen, con­cludes: “I truly be­lieve that on­line watch re­tail is the fu­ture, and that its im­por­tance will grow ex­po­nen­tially in the short term. The In­ter­net is where my gen­er­a­tion has grown used to shop­ping. We value the con­ve­nience of the ex­pe­ri­ence, re­gard­less of price point. That said, to be suc­cess­ful, on­line re­tail re­quires new ca­pa­bil­i­ties, and a dif­fer­ent type of re­la­tion­ship with clients, en­thu­si­asts and col­lec­tors who live and breathe on In­sta­gram, ded­i­cated fo­rums and What­sapp. This is what the brands are slowly gear­ing up to, and it is such a dras­tic cul­tural shift that it ex­plains their pru­dence to­wards e-com­merce. The ques­tion is not whether some brands will ever sell on­line, but rather when and how.”

“E-com­merce will def­i­nitely be a part of our fu­ture, but we are not rush­ing into it be­cause we want to get it right.”

OMEGA CEO RAY­NALD AESCHLI­MANN

02

01

05 Fifty pieces of this special-edi­tion Cronometro Tipo CP-2 were cre­ated by Zenith to mark the 15th an­niver­sary of on­line watch com­mu­nity PuristSPro. Avail­able only via the watch’s web­site, all 50 pieces sold out within six hours. 05

06, 07 Cartier was among the first watch brands to make its wares avail­able on designer fash­ion web­site Net-aPorter, which car­ried pieces from its Drive de Cartier col­lec­tion and women’s Panthere de Cartier se­ries.

06

07

Newspapers in English

Newspapers from Singapore

© PressReader. All rights reserved.