Until recently, most luxury watchmakers did not think about their purpose.
“A few years ago you woke up to sell watches,” Panerai president Jean-Marc Pontroué said at a media event in Los Angeles last month. “Now you think about your business in a different way.”
Mr. Pontroué alluded to a renewed sense of global interconnectedness underlined by the pandemic, but for many watchmakers, the events of 2020 crystallized a movement that had been building for more than a decade.
It started around 2009, when watchmakers, led by Chopard, began to question how they got their raw materials. Over the past five years, industry efforts to ensure responsible sourcing and sustainability, spurred on by broad social movements — including #MeToo and Black Lives Matter — have evolved into a massive rethinking of manufacturing and marketing.
From incorporating upcycled plastic into their timepieces to downplaying the aura of exclusivity that once permeated their message, luxury watchmakers are now doing everything possible to prepare for Gen Z buyers, who want inclusivity, sustainability, transparency and traceability. are non-negotiable.
Born between 1997 and 2012, members of that generation, along with millennials, are expected to account for 70 percent of the global personal luxury goods market by 2025, according to a November 2021 report from management consultancy Bain & Company. reformulating the meaning of luxury.
Ziad Ahmed, the 23-year-old chief executive and co-founder of JUV Consulting, a New York-based firm that advises companies on how to market Gen Z, said he hoped companies would commit to a make a really good product “that prioritizes people and planet every step of the way.”
In practice, Mr Ahmed explained, that means what he called a ‘thoughtful and sustainable’ supply chain, focused on local production and well-paid workers.
“How do we embrace the circular economy? How do we empower and empower diverse communities? How do we give back in a sustainable and targeted way?” said Mr. Ahmed. “I believe that 25 years from now there will still be room for goods that are made with great intention. But they cannot exist in a silo. A corporate culture of giving back is very important.”
This also applies to a culture that takes current events into account. Shortly after the Russian invasion of Ukraine, observers began calling on watchmakers to publicly denounce the war and stop exporting watches to Russia. In the days that followed, major groups including LVMH Moët Hennessy Louis Vuitton, Kering, Richemont and Swatch, as well as some independents, including Rolex, said they were taking action and many were closing stores in Russia, at least temporarily.
(Russia is not a major export market for Swiss watches and ranks 17th, just behind the Netherlands and Australia, on a February list of the Swiss watch industry’s top export markets, the most recent ranking available.)
The emphasis on thoughtful management and purposefulness over profit fits in seamlessly with other anti-consumerist movements seeping out around the world, particularly in China, where the concept of “laying flat” — or tangping, as it’s called in Mandarin — took root last spring, after a viral post gave voice to pressures placed on young people in Chinese society.
Rolf Studer, the co-chief executive of Oris, a Swiss watch brand known for its commitment to the environment, has seen the shift in consumer mindsets firsthand. “As a luxury brand, we are now able to gather people at cleanup events,” he said. “Ten years ago everyone would have said, ‘That’s crazy.’ People wanted a glass of champagne, now they go to the beach to collect garbage.”
And it’s not just idealistic twenty-somethings who demand change. A veteran of the luxury sector, Stephen Lussier, the outgoing executive vice president for brands and consumer markets at De Beers, noticed the shift in his own thinking in August 2019, when he read a newspaper article about the UK government introducing green number plates for electric vehicles.
“I said to myself, ‘That’s really cool, I’d love to have one.’ And a few pages later I thought to myself, ‘Why did I think that?’” Mr. Lussier recalled during a recent video call. “What do I need a green license plate for? It dawns on me: because I want other people the knowing.”
“What consumers want to express about themselves is changing,” he said. “That’s what drives the movement towards targeted brands; they want to associate with brands that share those values.”
Just ask Georges Kern, Breitling’s chief executive, to prove that purposeful strategy makes sense for profit. He said he believed that the reason why the brand was often named one of the best sellers — in a report published earlier this month, Morgan Stanley said Breitling’s sales grew 42 percent year-over-year in 2021 — was dealing with a transformation he initiated in 2017 to emphasize inclusiveness, sustainability and a more casual approach to selling (such as boutiques equipped with pool tables). They are the three pillars of what he called ‘neoluxe’.
“We did this before Covid and so we completely outperformed the market,” Mr Kern said during a recent video call.
As a private brand, Breitling does not disclose any income. However, Morgan Stanley estimated its 2021 sales at 680 million Swiss francs, about $732.4 million, putting the brand at number 11 on a list of the top 50 Swiss watchmaking industries – up from number 15 in 2017.
Mr Kern reflected on Breitling’s past image as a masculine brand with its own jet team, supported by ads featuring pop art illustrations of scantily clad women. In 2018, “when we stopped the jet teams, there was outrage,” he said. “Many retailers and journalists were extremely skeptical and thought it was a mistake. Today no one would even think of going back.”
What to do about the ecological footprint of the watch trade has proved more challenging. When the industry gathers in Geneva this week for the Watches and Wonders trade show, there will be press conferences to promote new products and parties to herald the return of in-person events, but now that so many people have grown accustomed to digital meetings, it is Many of the watch managers are ambivalent about the impact of the trips needed to transport retailers, journalists and brand representatives to Switzerland. (In 2019, in its former incarnation as the Salon International de la Haute Horlogerie, the event attracted a total of 23,000 visitors.)
“You’ll see everything being watered down,” said Chopard co-president Karl-Friedrich Scheufele. “Everyone is really looking forward to the event, because occasionally meeting people in person is irreplaceable. But of course we don’t need five watch fairs a year. Maybe we could use a Watches and Wonders every two years?”
Concerns about sustainability are also fueling the watch industry’s growing obsession with recycled materials and second-hand goods, which anathema to the concept of luxury just a few years ago.
“It’s my 25th year in the industry — when I joined it it would have been almost an insult to talk about recycling for luxury products,” Zenith CEO Julien Tornare said on a recent phone call. “Luxury had to be brand new, prestigious, shiny.”
For many younger buyers, however, modern luxury has little to do with such notions.
“My daughter is 18 years old and doing environmental studies in college,” said David Hurley, the New York-based executive vice president of the Watches of Switzerland Group USA, a multi-brand retailer with six showrooms in the United States and numerous Mayor Jewelers. locations. “I bought her an Oris Aquis with a recycled plastic dial and she loves what it represents: the brand is carbon neutral and they lead by example.”
The same can be said of watchmakers’ new approach to packaging, which has traditionally been made from solid, rare wood, stuffed with piles of cardboard and plastic. For example, in October 2020 Breitling introduced a foldable watch box that is made entirely from recycled PET, or polyethylene terephthalate, a plastic from bottles.
To communicate all the changes, watchmakers had to reinvent their graphics.
Mr. Pontroué of Panerai said that instead of insisting on the message “We are Swiss, we are limited”, his brand, like virtually all others, emphasizes diversity and inclusion in its advertising, including in a global campaign. which was introduced in December for its new Quaranta collection.
“We always used Italian male models,” he said. “Our message was Italian, masculine, muscular – that was very much our profile. Now we use Arab, black and Asian models.”
The content of such campaigns has also changed, from images and text that emphasize products and style to behind-the-scenes content that values authenticity and storytelling.
Christoph Grainger-Herr, the CEO of IWC Schaffhausen, cited the 2021 campaign for his Big Pilot’s collection of aviation-inspired timepieces as an example of a shift in his communications strategy.
“It’s much more about our product design and engineering process and the underlying story of the partnerships around those products,” he said in a recent video interview. “This is becoming increasingly important for the next generation of customers.”
Chopard’s Mr. Scheufele summed it up when he noted that although the brand nurtured craftsmanship and trained young craftsmen and watchmakers for years, “we never talked about it much because it just seemed normal to us,” he said. “Today I think it’s more about backstage, and less about the theatrical side of things.”
Across the board, watch executives agreed that the point of being a luxury brand in the 21st century is about so much more than the veneer of prestige and exclusivity. Patrick Pruniaux, the CEO of Girard-Perregaux and Ulysse Nardin, used a car analogy.
“I thought about our goal,” he said in a recent video interview. “It’s kind of like when you buy a new luxury car – who reads the manual? Nobody. And one day you think, ‘I’m going deeper’ because you want to understand something and you go into the manual and you realize that what you are only using the tip of the iceberg, a good luxury car is designed with many features that you don’t even know exist.
“Luxury is all about that depth,” added Mr Pruniaux. “Nowadays people are digging much deeper. It’s not about the function; it’s about understanding what’s behind it.”
