High-end mechanical watches are far from being high-tech. In fact, mechanical watch movements that are considered cutting-edge, most prominently the latest calibres from Rolex and Omega, still rely on the same principles that governed timepieces a hundred years ago.
A parallel can be drawn with automobiles, which are by and large powered by the internal combustion engine. Tremendous advances have been made, but the fundamentals of the car – burning petrol to create force that propels a piston – have remained unchanged. But motor transport is now undergoing a paradigm shift, with the gradual transition to electric and autonomous vehicles.
Fine watches, however, are sticking doggedly to tradition, because that is precisely the appeal of the product. Unlike automobiles, which serve as transportation, mechanical watches are accessories, works of art, or even stores of value, with functionality at the bottom of the list.
Old-school watchmakers have turned to technology on several fronts, including making tentative forays into smart watches and wearables, as well as developing mobile apps to raise brand awareness and loyalty.
But where technology will likely have a major impact is as a sales channel. Fashion labels got there first, both on their own and in collaboration with platforms like Yoox. And last September, Burberry became a first mover with “see now, buy now”, when it made its autumn collection available in stores and online as soon as the collection made its debut on the catwalk.
Key luxury watchmakers recently started using the Internet to sell, instead of just to show. The experimentation with online watch retail is happening somewhat belatedly compared to other businesses, a consequence of the luxury watch industry’s uncompromising desire to control the sales environment, plus the religious devotion to tradition and heritage.
Nonetheless, changes are happening, still tentatively but at an accelerating pace. Take for instance what’s happening at Richemont, owner of more than a dozen marques, including Cartier, IWC and Panerai. With the recent appointment of Georges Kern, the former boss of IWC who’s a vocal proponent of the Internet and social media, to lead the Swiss luxury group’s entire watch division, Richemont’s brands are going swiftly online.
The first to make a decisive move was IWC, which opened pre-orders for its new Da Vinci collection as soon as the watches were unveiled at the annual trade fair in Geneva. In fact, some entry-level Da Vinci watches were available on Net-A-Porter as soon as they made their debut, with certain models selling out in less than a month.
Richemont’s key rival, Bienne-based Swatch Group, has taken the notable step of offering a limited-edition Omega Speedmaster wristwatch exclusively via its website – a first for a brand of Omega’s size. Announced in early January, the smallish run of 2012 watches sold out in hours, thanks to the online clamour in the wake of its launch.
The success of both groups’ Internet endeavours means online sales are here to stay. Not just because the channel can help sell more watches, but because Internet retail also boosts margins.
Selling watches via a brand’s own website means the watchmaker keeps all of the profit margin, instead of having to share with an independent retailer or landlord, as the traditional distribution model would dictate.
And the irony is that Internet sales can also increase client visits to the brand’s own boutiques, as illustrated by the online-only Speedmaster that had to be ordered online but collected in person at an Omega store.
Yet watchmakers are still behind their peers in luxury fashion. While Burberry’s “see now, buy now” approach means consumers can go online and buy the entire new collection, the vast majority of new watches still take six months to a year to reach stores, on- or offline. It’ll take a while for the watch industry to tick along at a faster pace.
Read more of Su Jia Xian’s incisive commentary at his website, WatchesbySJX.com.