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In vintage we trust
Trend Forecaster

In vintage we trust

Wednesday, 11 January 2017
By Ilias Yiannopoulos
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Ilias Yiannopoulos

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6 min read

2016 was influenced by two major trends: a sharp decline in Swiss watch exports and an almost catholic appetency to go vintage. Intimately connected, they portray the two faces of the industry.

After two decades of expansion, the Swiss watch industry is facing a grim financial reality. Exports fell by 10% in 2016, the biggest drop since 2001, according to the Federation of the Swiss Watch Industry. The main causes are well-known and range from Swiss franc appreciation to terror attacks in Europe and the shift observed among prospective buyers that alienate them from the luxury mechanical watch. This is especially true of Chinese customers, once a driving force for Swiss watchmakers. “Wealthy Chinese no longer want luxury watches,” says Shaun Rein, the founder of China Market Research Group which consults with high-end brands. “The new luxury is going on safari in Botswana… It’s no longer about wearing a $15,000 watch.”

Additionally, as a means of keeping track of time, the mechanical watch has lost in significance. The aura of old-world luxury, which underpins the bulk of Swiss watch advertising, has an increasingly limited appeal in a tech-driven world where, for the first time since World War II, the younger generation are poorer than their parents. As a consequence, smart watches have become a credible alternative to classical pieces, yet apart from companies such as TAG Heuer, Breitling or Frédérique Constant, Swiss firms have been slow to respond to this shift. It should come as no surprise, then, that only 25% of watch executives consider smart watches to be a competitive threat, according to a 2016 Deloitte survey.

Consumers do not purchase luxury products because those products meet their functional needs; rather they do so because luxury products fulfill ego and self-esteem needs
Uché Okwonko
Emotional tactics

This is not the first time Swiss watchmakers have experienced a major crisis; the introduction of quartz in the early 1970s decimated the industry whose against-the-odds survival prompted a remarkable transformation. Firstly, the Swiss radically restructured their industry and introduced the Swatch which once and for all signaled Swiss dominance of the low-cost fashion market. Secondly, they aggressively marketed themselves as the epitome of concepts such as luxury, tradition, heritage and exclusivity, thanks to which they were able to identify this paradigm shift from an early stage, and find new selling points which focused on the symbolic and emotional aspects of the product. The notion of Swiss-made luxury was carefully managed and assiduously reinforced.

Rolex Cosmograph Daytona
Rolex Cosmograph Daytona

This new strategy built extensively on safeguarding the traditional ethos of the product, by emphasizing its exclusivity and at the same time building emotion. The whole idea of exclusivity was carefully stage-managed through tactics such as artificially induced scarcity combined with the resolve that a watch must be mechanical. The main objective was to radically transform the wristwatch into a luxury item, and as Uche Okonkwo states in his book, Luxury Fashion Branding, “consumers do not purchase luxury products because those products meet their functional needs; rather they do so because luxury products fulfill ego and self-esteem needs, reinforcing social status and projecting a self-image.” Emotion is key!

Insistence on emotional branding that appeals directly to a consumer’s aspirations, thus triggering a non-rational response, seems to work: people identify with the stories that come with the watch. However, this particular marketing tactic appears to have taken on a whole other meaning of late, and this happened because social and economic conditions have changed. Brands now seek to link the product more directly to the attendant stories. A story alone is no longer enough to lure the consumer who also expects a strong physical connection between the product and its heritage. Of course the DNA of each company has always been present, but it would appear that the retro vibe which everyone seems to be following, and which has been blown out all of proportion, makes the product much clearer and more relevant in the consumer’s eyes.

Zenith Heritage Café Racer
Zenith Heritage Café Racer

The unprecedented spread of social media and its impact on watches, especially vintage, has also sharpened companies’ response. Most of the time, vintage watches are anathema for Swiss firms. Granted, they serve their purpose of highlighting the company’s glorious past and innovations, and yes they do enhance brand image and therefore the price of new models. But these watches were produced in the past and only the dealer profits from their sale. Retro fashion is brands’ response for people who cannot live with a genuine vintage watch and its limitations.

TAG Heuer, Heuer Monza Chronographe
TAG Heuer, Heuer Monza Chronograph
Out-of-control forces

With the exception of Rolex, which still hasn’t succumbed to retromania, it seems the vintage bug has made a clean sweep of the industry. With the SIHH upon us and Baselworld just a few months away, we can safely expect a new crop of vintage-inspired watches. The countless examples to date have proved quite successful. The Tudor Heritage line, Omega with its Seamaster 300 M.C, TAG Heuer’s Monza and Autavia chronographs, various Panerais, Doxa and its re-edition of the Sub, Jaeger-LeCoultre’s tribute chronographs, Zenith with the Cairelli and its Heritage Pilot Cafe Racer, or Montblanc with its 1858 series. Harry Winston presented a brooch inspired by the erstwhile fashion for men to carry their watch in the breast pocket of their suit. Even yellow gold, seldom seen as an anachronistic choice, returned when in 2015 MB&F introduced a yellow gold version of the Legacy Machine 101; a year later Audemars Piguet launched Royal Oaks in that same precious metal. What next?

Montblanc 1858 Collection
Montblanc 1858 Collection

A tight financial environment, a more vibrant message aimed at the prospective buyer, and the social media boom are the three reasons Swiss watchmakers are embracing retromania. Their reckoning is that a more vintage-looking product will somehow lead them out of the crisis. Almost every retro-based wristwatch revolves around dates and legendary names that amplify tradition: stories that connect the past with the present. The use of bronze and yellow gold, both metals that add to the vintage feel, yellowed indices that imitate the discoloring caused by tritium, and traditional design codes across an entire line of watches are all widespread. Rhetoric refers to old-school manufacturing techniques and artisans, while press material is peppered with buzzwords such as military, aviation, legibility, tools and heritage.

This retrophilia, literally a love of the past, is the inevitable result of the precarious position that the Swiss industry has been led into by forces that cannot be controlled, and also by forces of its own making. Surely this vintage tsunami is being driven by the industry as it aims straight at the consumer’s heart. It is the less risky approach and so far it seems to be working. Vintage/retro watches tend not to feature complications and are not expensive per se, hence relatively accessible. Will this tactic help the Swiss watch industry recover or is it a short-sighted response? Time will tell.

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