There was once a time when many would have described the rarified world of watchmaking as hidden. However, it is fair to say, that after seeing unprecedented demand in 2021 and the first quarter of 2022, that is no longer the case.
Gone are the days when novelties would be introduced at a watch fair and then filtered out to selected sellers all around the world in an orderly and timely manner. These days, it’s a landscape where limited editions like the Tiffany-Blue Patek Philippe Nautilus 5711 sell for more than $6.5 million in a mere 14 minutes and 39 seconds. Where crypto bros invest their earnings into hard assets to accrue value as investments in a short amount of time. And where a second hand Rolex can be worth more than a new model, due to limited production capabilities and product scarcity.
But within this new world of watchmaking, there exists new opportunities for the luxury brands who encompass it. Luxury watch brands have the power to reshape their universe if they wish to do so, but how they do it is entirely dependent on whether they choose to listen to the new generations of consumers who are entering it, many of whom are more digitally native than old school.
“Over the course of a decade, luxury watches have become much more mainstream,” said Marc Montagne, author of Invest in Watches: The Art of Watch Collecting. Not only does Montagne work for a watchmaking brand (his current role is Head of Digital Marketing and E-Commerce at Vacheron Constantin), he is also the founder of Toolwatch and Watch Auction HQ, the first an app designed to measure the accuracy of mechanical watches and the second, the largest online database of watch auction results from all around the world. And to top it all off, he is the host of Repetition Minute, the leading French podcast on watchmaking.
“There are so many different profiles which has made it harder to pinpoint one or another, but what we can see in terms of behaviour is that the gap between collectors and watches has shortened,” he continued. “People are much closer to brands than they ever have been before, and their path of purchase is much more accelerated. Previously, it was almost mandatory to go to a physical boutique. But nowadays, even if you’re not an expert and you’re just getting started, there are so many different ways of acquiring watches.”
“Sometimes even just with a simple Instagram post, there are dealers that do not even own physical boutiques that simply post their inventory in an Instagram story, and before the end of the day, that watch is sold somewhere,” he added. “This is one of the biggest trends I see, the diversification of the ways of accessing watches.”
This diversification is one of the larger trends in watchmaking, as the path of purchasing a luxury watch has become more digitised. And with that shift, comes another shift that many watch brands are embracing such as taking a more direct approach towards interacting with their customers, through their distribution, analysis of their customer data as well as the need to crafting compelling content to ensure they keep their audiences engaged.
“Brands are physically meeting with their customers in a much more direct and regular way than they used to get in the past,” noted Montagne. “Their understanding and knowledge of their customers is much greater than it has ever been, which makes communicating with them much easier.”
And data also plays an important part in that understanding. Now more than ever, watchmakers can use the customer data they have available to gain further insights on how to reshape what the future of their brand will look like, and brands will need that customer feedback in the months to come as uncertainty over slowing economic growth, higher interest rates and the crash of crypto currencies persist.
“The more details you know about your client, the better you can anticipate their desires, said Alain Zimmermann, Managing Partner at DLG. “It might be in the way you consider your product offering, for example, what materials they like, the colour, the sizes you make available.”
“How you do that in this age is through a number of different ways, not just the regular high level data, but other considerations like qualitative research. At DLG, we take a very bespoke research approach to narrow down individual behaviours but also to flag highly relevant signals that can only be identified through one-on-one interviews with high net worth individuals,” he added. “These interviews help our clients better understand the behaviours, the emotions and the interests of sophisticated audiences. And this deeper level of knowledge enables a dialogue with the customer where you create a trust between them and yourself, which ultimately results in a lifelong relationship of value.”
Zimmermann, whose experience in the luxury industry spans more than 20 years, having previously held roles like CEO at Baume & Mercier, and Chief Marketing Officer at IWC, believes that by building up these personas, brands are able to craft the right message, to the right audiences, at the right frequency and on the right communication channels.
“If you multiply these data points, what you are able to propose and potentially adapt, will be much closer to what people are looking for, as long as you're within your brand DNA,” he said.
But just because you can buy a watch as a hard asset and investment piece, it doesn’t mean that all new luxury watch buyers are doing that. More often than not, most people who buy watches are interested and passionate about watchmaking and their first purchase is just one step in their journey towards becoming avid collectors. Which is why it is so important for brands to nurture this new generation of buyers.
“Oftentimes, the only way to get into watches is to learn from someone, from somewhere about watches,” said Montagne. “I’ve always believed that education is extremely important for our industry, because otherwise there’s no reason for you to get into it. No one needs a watch, obviously. But I want to help open up this hidden world to others, which is what I’m doing with the book and my podcast. I always try to present it in a super accessible format to pretty much anyone.”
“Watchmaking has gotten much more global than it was, even 10 years ago, it was almost hidden,” he continued. “But it's true that the industry is opening itself up. I think that previously brands were reluctant to share some elements due to the competition, but these days, their archives, elements of the heritage are treasures that they are more willing to open up about and think the industry is really realising this and opening it more and more, which is a good thing.”
A key example of this is how some watch brands offer reservation-only tours once a week, like Zenith, Jaeger-LeCoultre and Audemars Piguet. Another is the creation of content for their channels to give their audiences more insight and information about the brand and its manufacture. “This kind of communication did not exist 10 years ago,” said Montagne. “You could have never been allowed to go inside a manufacturer to visit. Whereas today, it’s much easier to do so.”
“It’s true that previously, it was a bit of a distant conversation,” agrees Zimmermann. “Now, it’s a constant dialogue, helped by new platforms like social media, but it’s also driven by the need to adapt to new audiences.”
“Those new audiences which are driven by younger generations, expect deeper access into a brand, such as product creation, learning who the people behind the product are, and more insight about a brand’s universe,” he added. “If you look at the way we used to do videos, it used to be very sophisticated corporate videos. Today, brands show shorter but more detailed videos demonstrating the savoir faire, and the behind the scenes. It's much more authentic, because that's exactly what this new audience is looking for. They want to have a deep understanding. They want to go into details. And obviously, luxury brands have a lot of details to share.”
Montagne, who has worked in the watchmaking industry for more than 10 years, decided to write his book after witnessing the meteoric interest in luxury watches over the past few years as a way not just to help its readers make better investments but also as a guide to building a better collection of watches, for a new generation of watch collectors within the community.
“The discussion around investment (in watches) was growing,” recalled Montagne. “You could tell it was becoming more and more visible…Everyone was talking about these new crazy ways of making money, whether it was with Bitcoin, with Hermès bags, vintage watches, or modern watches. There was this general trend of watches being investments being discussed, and I’ve always enjoyed sharing my knowledge and passion on the subject.”
As watch communities continue to grow, so too do the opportunities for brands to grow with their collectors. “Today, it's much easier to be more accessible,” said Montagne. “You can see it in the how Watches & Wonders as an event has evolved. This year, there are two days where it’s open to the public. And you have brands that watch enthusiasts are much more connected with than they would be in the past, like myself, I'm receiving messages almost every day on Instagram, LinkedIn, or other platforms from people who have question around our products.”
“Those means of communication that simply did not exist five years ago,” he added. “You would rarely reach out to like an executive as a vendor for a question of some sort, whereas now, anyone is just free to do it. And that's a great thing.”
“If a brand is willing to offer a certain level of personalisation, you have to open yourself up to a personal discussion,” noted Zimmermann. “Today, there’s a totally different way to interact. There aren’t the same barriers that we used to have in the past, stores are now experiential spaces for everyone to come and learn more about the world of watches and watchmaking.
“What brands need to ensure in the future is that their digital experience is as personalised as their physical ones,” he added. “Some brands have started doing this, and with great success, but what matters is that brands take a consistent and true omnichannel philosophy, that it becomes key in the future.”