Luxury Timepieces in the United Kingdom

PROSPECTS

Brexit and currency fluctuations affect sales

In 2019, the performance of luxury timepieces remains closely tied to the ongoing uncertainty caused by Brexit negotiations. Currency fluctuations have impacted sales of luxury timepieces as after the pound reached historical lows in 2017, there was strong growth in sales due to tourists enjoying favourable exchange rates and local consumers being more incentivised to buy in the domestic market, however there was a slowing down in 2018 as a result of the recovery of the pound.

Independent specialist retailers suffer in a changing retail landscape

In 2019, the share of specialist retailers is decreasing compared to other channels. The struggles of independent stores is a result of rising online sales as well as an increasing number of brands distributing through their own stores like that of Audemars Piguet.

Growth of smartwatches complement growth of luxury timepieces

The impact of smartwatches is felt less in the luxury watches segment and more in the mid-market. This middle segment is losing sales to smartwatches and fitness trackers as they offer similar functions at the same price points.

COMPETITIVE LANDSCAPE

Rolex continues to lead, followed by Patek Philippe

The Rolex Watch Co remained the leader in luxury timepieces in the UK in 2018, followed by Swiss watchmaker Patek Philippe. Both brands are clearly ahead of their closest challenger Audemars Piguet.

Authentic physical and digital engagement ensure success

While it may have been initially thought that watches would become outdated due to the omnipresence of smartphones and growing importance of wearables, millennials are embracing purchases that appeal to more traditional values and nostalgic ways of living. What is key for watch brands to ensure success among this group of consumers is to realise that millennials seek out authenticity and distinctiveness from the brands they engage with.

Luxury timepieces resale continues to boom

With Richemont acquiring Watchfinder & Co in 2018, a British online retailer of pre-owned and ex-stock luxury watches, the increasing appeal of second-hand luxury is evident. Across the luxury industry, resale businesses are growing, as can be seen with the boom of luxury fashion businesses like The RealReal and Vestiaire Collective.

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