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Swiss watchmakers go digital to show off new products, revive sales

TechnologyApr 07, 2021 01:16PM ET
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2/2 © Reuters. FILE PHOTO: Stern Chairman of watchmaker Patek Philippe poses before an interview with Reuters in Plan-les-Ouates 2/2

By Silke Koltrowitz

ZURICH (Reuters) -Luxury Swiss watchmakers, usually not big fans of online retailing, are launching a new all-digital Watches & Wonders event on Wednesday to display their latest products, hoping to revive sales hit by the coronavirus crisis.

Makers of high-end watches still largely rely on physical stores for sales, but the success of online platforms for pre-owned watches, such as WatchBox or Richemont's Watchfinder, have shown it is possible to sell luxury timepieces online.

Pandemic-related factory and store closures hit Swiss watch sales last year and have forced brands to boost their often tiny online business and generally rethink digital activities.

Guillaume de Seynes, executive vice president at luxury goods group Hermes, told Reuters one of the reasons Hermes' watch business outperformed the industry last year was that its customers were already used to shopping on hermes.com.

Hermes, known for leather goods, silk scarves and perfumes, embraced e-commerce much earlier than pure-play watchmakers, launching its transactional website in the United States almost 20 years ago.

De Seynes said he expected a strong recovery in the group's watch sales this year, with current trends broadly in line with the 28% increase in the final quarter of 2020.

Rene Weber, analyst at Vontobel, estimated that only about 2% of Swiss watch sales in value terms were currently done online, with the share varying depending on the brand. Other analysts estimated the online share of sales at around 7% to 9%.

Some Swiss luxury watch brands - such as Patek Philippe and Rolex - have preferred to stick with traditional bricks and mortar stores to sell their products that can cost tens of thousands of dollars.

For Patek, selling online is still not an option, and a test run with retailers during the first lockdown confirmed that strategy, President Thierry Stern told Reuters.

"People don't want to buy a Patek online, the watches are expensive, you lose the beauty, the magic."

The family-owned luxury watchmaker sees a recovery this year after a 20% sales slump in 2020, but does not expect to return to 2019 sales figures yet. "That will maybe take a year or two, Stern said.

Justin Reis, chief executive of pre-owned platform WatchBox, said customers had become much more engaged with the brands during the pandemic as they became used to actively searching information online, via webinars or social media.

In reaction to this trend, Patek Philippe has made some investment in its digital capabilities, hiring staff and setting up a studio to deliver high-quality virtual product presentations.

Small independent brand H. Moser & Cie also invested in digital technology ahead of the Watches & Wonders fair and said it was pleased these costs were lower than for physical watch fairs.

LVMH's Bulgari said e-commerce had increased "dramatically" in a presentation on Wednesday. "We expanded our technologies and made ourselves more available to clients," Bulgari watch head Antoine Pin said.

Watches & Wonders' official platform https://www.watchesandwonders.com/en, which describes itself as "the biggest watch event ever to take place online", is giving media and retailers access to presentations held by the 38 participating brands.

"It would be good if consumers could also participate via the Watches & Wonders platform," Oris Co-Chief Executive Rolf Studer told Reuters, saying the brand had developed campaigns to connect more closely with customers on Instagram and launched a watch directly to its online community via Zoom.

Swiss watchmakers go digital to show off new products, revive sales
 

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