Consultancy firm Deloitte occasionally compiles its ‘Swiss Watch Industry’ study. This year’s edition is a 30-page long report which offers a look inside the minds of the industry executives and their customers. Having read through their latest report my ‘TLDR’ version of it is that the executives have seemingly lost their way… in more ways than one. Note that this is not Deloitte’s conclusion, it is none but my own.
The Deloitte study “is based on an online survey and interviews conducted between mid-August and mid-September 2020 with 55 senior executives in the watch industry. The study is also based on an online survey of 5,800 consumers in China, France, Germany, Hong Kong, Italy, Japan, Singapore, Switzerland, the United Arab Emirates, the United Kingdom and the United States”.
I will not rehash the entire study here. However, I wish to point out a few key points here and that is that the executive feedback is depressingly boring and uninsightful. This statement probably costs me a few invites at Baselworld and such, but that’s okay because the fairs have been cancelled anyway.
Here are the KEY priorities identified by the watch brand executives:
- Develop Omnichannel Strategy
- Introduce New Products
- Reduce Costs
So far, nothing new, and these three are part of the industry’s mantra that has been repeated ad nauseam for the past decade now. Basically put out more of the same in different ways at a lower cost. These are also your typical key priorities when you are essentially run by finance professionals but I digress…
No, what is important is what sits at the very bottom of the priority list. Dead last on the priority list is Research and Development. Because who needs R&D anyway? Well, let me tell you – the Swiss Watch Industry needs it as much as you and I need air to breathe. With all the fresh air found in the Swiss Alps you would expect a bit more clarity of mind in the upper echelons of the Swiss watch industry. Meanwhile for example, the Japanese watch brands have been innovating and increasing quality at a rapid pace. Could this have ANYTHING to do with their stellar growth in key markets? Apparently not if you’re a Swiss watch executive.
That the average industry executive is tone deaf is further highlighted by the fact that they learned zero lessons from the onslaught caused by the relentless rise of the smart watch. In the study they now seem to accept to have ‘missed the boat’ when it comes to smart watches. Somehow completely missing the point that putting research & development as your lowest priority is a sure-fire way to repeat this when the next innovator comes along.
But there is a silver lining in their acknowledgement of having missed the boat for smart watches. Until recently the modus operandi for the Swiss Watch Industry was to believe that ‘there is no boat’. And where there was no boat, no boat could be missed of course. At least we have come to the point where the proverbial ostrich has decided that burying its head in the sand will not make its problems go away. Congratulations?
However, don’t worry too much, the lack of innovation will be picked up by an increase in – wait for it – marketing spending! Key priorities here being Social Media, Email newsletters, Warranty Clubs and – just what the world needs – more Brand Ambassadors & Influencers. It would almost be funny if only it were not so tragic.
In addition, the study basically also confirms the slow death of your average Authorized Dealer. Brands seemingly betting the house on online sales and .. mono-brand boutiques. Ignoring the incredibly obvious fact that an Authorized Dealer is also a Brand Ambassador. Better yet, the type of ambassador that generates revenue, rather than soak up costs under the guise of gift packages and fun trips to the sunny side of the planet. Every year the Swiss Watch industry bumps up its prices. At least now you will know where that extra money will be spent. Brand ambassador lunches and goodie bags for the next influencer. Hey, they have to eat too.
As one of the biggest cheerleaders of this fantastic watch industry, I sit here on the sidelines wondering: Si pas maintenant, alors quand ?
Note: The results of the 2020 study will likely surprise not a single watch enthusiast out there. However, it is an interesting read and I suggest that you read the nicely compiled study in its original format right here.