Luxury Timepieces in the US

PROSPECTS

Luxury timepieces returns to growth amid interest among younger consumers

Despite continued difficulties for watches at mass price points due to competition from smartwatches, luxury timepieces returned to growth in recent years thanks in large part to interest from younger luxury consumers. While the Apple Watch and other smartwatches have helped to introduce younger consumers to wearing watches in general in recent years, as these consumers become older and wealthier, they are beginning to trade up to luxury timepieces, drawn especially to the design, tradition, and storied brand names of high-end mechanical watches.

Swiss brands find popularity in US market

Luxury timepieces’ growth throughout 2018 and 2019 was largely driven by luxury Swiss watchmakers, as exports of high-end Swiss watches to the US reached their highest levels in years across the period. With independent and group-owned brands such as Rolex and Richemont’s Cartier, respectively, having had a strong presence on the US market for decades, a growing economy coupled with high consumer confidence has drawn consumers to the aspirational Swiss brands.

Non-luxury timepieces present stiff competition

Though the heritage and recognisability of high-end brands is one of the key drivers of the returned allure of luxury timepieces, now more than ever, non-luxury brands are posing increasingly stiff competition for luxury timepieces. Having enjoyed rapid growth by helping to pioneer influencer marketing on Instagram after its founding in 2011, Daniel Wellington has been expanding both its direct store channels and wholesale partnerships in the market, with its accessibly-priced watches in classic styles, still promoted heavily by social media influencers and celebrities alike, continuing to grow in sales.

COMPETITIVE LANDSCAPE

Rolex invests in digital channels as it continues to lead

Far outpacing its rivals in terms of sales, Rolex continued to lead luxury timepieces in 2018. Having long enjoyed an iconic status in the US market, the brand benefits from wide distribution across its own retail stores and specialist watch and jewellery stores, as well as its offering of more unisex styles and watches offered at lower price points compared to some of its rivals, attracting a wider breadth of consumers to the brand.

E-commerce grows but brick-and-mortar remains dominant

E-commerce continued to be the fastest growing sales channel for luxury timepieces as brands and retailers alike expanded online product availability and invested in improving digital storefronts and product photos. Consumers are becoming increasingly comfortable purchasing high-valued items online, and as a result, luxury e-commerce players and select brands debuted new e-commerce capabilities throughout the year.

Brands begin to assert themselves in the second-hand market

As both cost-saving and environmental benefits continue to draw consumers to the secondary market to both buy and sell a myriad luxury products, luxury timepiece manufacturers are taking steps to protect their brands’ representations on the secondary market, while also continuing to drive primary market sales. In October 2019, Swatch-owned Omega introduced an authentication programme, in which its participating boutiques will authenticate Omega timepieces that are 30 years or older and issue a Certificate of Authenticity for CHF800.

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