As major watch brands pull out of international watch fairs, local exhibitions are becoming more popular. Watch experts believe that localising sales is the way forward for luxury brands.
At the Stimulus 2020 webinar held on April 13 and 14, Abhay Gupta, Founder & CEO of Luxury Connect hosted a panel ‘Navigating through post-COVID-19 for Luxury Watches’ with Sarosh Mody, Director of Luxury Watch Works, Rahul Kapoor, Founder of Only Luxury Consultancy, Monaco and Mitrajit Bhattacharya, Founder of The Horologists & The Corner Room Project. The webinar was organised by The Global Luxury Group, Crosshairs Communications (PR Partner) and WIN (Women Inspiring Network – Content Partner). Below is an excerpt.
How will watch brands plan their business post-COVID? Sarosh Mody: As far as the traditional watch fairs are concerned, we’ve seen a lot of change over the last two years, especially in the brick-and-mortar system of international trade fairs. Many brands are now conducting their own fairs, regionally.
As you know, in the watch industry, the consolidation of the brands is through groups. For example, Louis Vuitton Moët Hennessy (LVMH Group) owns certain watch brands; the Swatch group owns certain brands. Slowly and steadily, when this trend started with Baselworld, we saw a few brands leaving and more regional engagement was proposed.
If you look at what LVMH did with its brands like Bvlgari, Hublot, Zenith, TAG Heuer, they did a show in the Middle East and Dubai in January, when things were still a little calmer, and they had a successful turnout for these events. I feel it’s going to be more like those traditional times.
I still remember that somewhere in the early 19th century, a watch owner himself would pack a suitcase full of watches and travel to the stockers of the world, and all his watches were sold by the time he ended his journey.
The digital media is very prominent and the idea is to create a connection with the buyer where they can see and feel the product for themselves. The distribution will either go through multi-brand retail chains, retailer boutiques or companies owned boutiques and I don’t see that changing in near-future. Especially after the crisis, in terms of establishing boutiques, as big brands are spending this time in training their employees and distributors online. Implementation of new technology protects a brand’s distribution from being disturbed.
Mitrajit Bhattacharya: Speaking of the road map ahead post COVID-19, I have broken it down into three parts. First is the short term or the immediate thing that the brands need to do and which they are doing; it is to ensure the safety of employees and customers.
So if you see, Rolex and other big companies have shut down their manufacturing units.
Next is proactive communication with all the stakeholders on safety protocols. So technically, just shutting down all the manufactures is not good enough. You also have to proactively communicate with a lot of stakeholders and that’s why you will see many CEOs hosting Instagram live sessions every evening.
The next thing is the reassurance of a long-term commitment. These are some of the short-term things that brands need to be doing.
Post the crisis, brands need to do an immediate review of their 2020 inventory, which is very, very important, and then to revise their 2021 collection, and these must be done parallelly. The third and most important point is that we need to enhance digital engagement right away. There is no tomorrow customer activation, e-commerce and digital marketing. Furthermore, they (brands) need to manage cash well. If you have good cash, you have an advantage and it will really change the fortunes of your company after this crisis.
How do you think the situation post COVID is going to be managed by these (luxury watch) brands? Specifically Indian brands. Do you think digitisation is going to be the way forward? Mitrajit Bhattacharya: I would like to draw your attention to numbers, which is actually quite interesting. I just picked up the Swiss Watch Exports of the last two years, and the last two months which is January and February (March figures aren’t out yet). If you look at February 2020, the market was at minus 8.7 per cent. And the USA at the same time was scoring almost 18 per cent plus. And Hong Kong was obviously minus 42 because it is one of the largest markets in the world. And if you talk about Jan-Feb 2020 then you are looking at plus 0.5 per cent, which is less than one but it’s plus. Even last year, all major markets other than Hong Kong reported double-digit growth. So, it’s not that the COVID crisis has come at a very weak moment for the luxury industry. The watch industry was doing fairly okay until a couple of months back. What I’m saying is that the watch industry has some bandwidth to handle the closure and replan business.
Rahul Kapoor: We have been holding a very smooth forum called the Independents of time where we invite very selective guests. The regionalisation of these particular exhibitions is doing well as these are scaling down and tailoring their approach according to local consumers.
In terms of digitalisation, the brand that has done the best after change of management is Laurent Ferrière. We have recently had Jay Z showcase in a six-seconds video.
Independent brands are upping their game on digital platform, but it’s a challenge, as they create very few watches and are very selective of their clients.