Luxury Timepieces in the US

2020 IMPACT

Store closures and other restrictions reduce foot traffic to key retail channels

Both men’s and women’s luxury timepieces experienced their sharpest sales declines in recent history in 2020, as efforts to mitigate the spread of COVID-19 forced the closure of, or contributed to reduced foot traffic to, the category’s largest store-based retail channels throughout much of the year. With lockdowns lasting from mid-March until at least May or June in many states, the closure of jewellery and watch specialist retailers and monobrand luxury timepiece stores, classified as non-grocery specialist retailers, as well as department stores, classified as mixed retailers, prevented consumers from purchasing luxury timepieces in stores during this time, while increased hygiene and social distancing protocols in stores, as well as boarded-up storefronts during periods of civil unrest, led to a reduction in foot traffic to stores throughout the remainder of the year.

Lack of consumer need amid increased time spent at home weighs on sales

Further reducing demand for luxury timepieces was a lack of consumer need amid not only lockdowns and quarantines, but throughout the rest of the year as well as consumers spent significantly more time at home than in typical years. Without an opportunity to show off their luxury timepieces at work, out to dinner, or during large social events and gatherings, many consumers with discretionary income instead purchased good and services to help make their increased time spent at home more comfortable, such as food and alcohol delivery, furniture, home décor and home entertainment systems.

Travel restrictions led top players to court tourists in their home markets

In addition to store closures and changing consumer priorities, luxury timepieces brands, especially those such as 2019 leader Rolex with a limited presence on e-commerce, were especially challenged by domestic and international travel restrictions that prevented many of their key customers from purchasing luxury timepieces in the US. With international retail expenditure typically representing over 32% of luxury timepiece sales, this fell to just 21% of a much lower total in 2020 as wealthy foreign travellers, businesspeople, and students, all representing key drivers of luxury timepiece sales, were unable to shop in stores while visiting large cities and other luxury shopping destinations.

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