Watches in Switzerland

PROSPECTS

Conventional watches are challenged by emerging technology

Hybrid watches, included in consumer electronics according to Euromonitor International definitions, are emerging as an attempt by classical brands to tackle the consumer shift away from quartz/mechanical watches towards smartwatches. Hybrid models offer technological features such as e-mail notification or measuring the wearer’s heartbeats and number of steps while retaining their classical design and appearance.

Growing demand from international tourists boosts sales of watches

In 2019, value sales of watches grew more significantly while volume sales saw less of a decline compared to the previous year. This can be ascribed to the increasing number of international tourists, especially wealthy Chinese visitors.

Specialists dominate sales, with monobrand boutiques having strong appeal, but growing number are shopping online

Jewellery and watch specialist retailers continued to dominate value sales of watches in 2019 due to leading the distribution of premium and super-premium watches. For example, Rolex continues to be distributed exclusively through a select network of upmarket, traditional jewellery and watch specialist retailers, corresponding to its high-end image.

COMPETITIVE LANDSCAPE

Multilevel multibrand strategy keeps Swatch in lead while Rolex benefits from iconic status and tourist appeal

The Swatch Group Ltd continued to strengthen its leading position in watches in Switzerland in 2018 through its offer of many brands of high mechanical watches. Its diverse portfolio includes basic, mid and high watches brands such as Breguet, Omega, Swatch and Calvin Klein and allows the group to reach consumers of all income levels and take advantage of different market opportunities.

Basic and mid brands rethink strategies to compete with fast fashion retailers

Many brands continued to see their sales of basic and mid watches stagnate or decline in 2018. Brands such as Fossil, DKNY and Esprit continue to face competition from fast fashion retailers such as Zara and online retailers, including Zalando, which sell watches at relatively low prices which consumers can replace regularly as fashions change.

More manufacturers of conventional watches introduce hybrid watches

Competition in hybrid watches is intensifying as consumers enjoy the classical design while having the benefits of a smartwatch. Conventional watch producers such as Seiko and TAG Heuer have produced and sold hybrid watches for a few years, and this is encouraging other brands to follow suit.

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