Struggling Swiss Watchmakers Warm to Direct Online Salesby
Online resellers seen most important for first time since 2012
82% of watch executives say they’re pessimistic on prospects
The proportion of Swiss watchmaker executives saying they’re pessimistic about the industry’s prospects has doubled, prompting a shift online to try and find buyers, a Deloitte LLP report showed.
Half of the watch executives surveyed considered specialty e-commerce resellers as the most important sales channel in the next year, according to the Deloitte study released Tuesday. The share of respondents who are pessimistic about the about the industry rose to 82 percent from 41 percent a year earlier.
While Swiss watchmakers have traditionally been wary of e-commerce amid the risk of fakes being sold on the Internet, the industry is opening up to the idea as it seeks younger consumers. Last year, TAG Heuer entered an exclusive e-commerce partnership with JD.com, China’s largest online direct sales company. Cartier has also expanded its online presence. Swiss watch exports are poised to slide for a second consecutive year as weakness in Asia spreads to Europe.
“Swiss watchmakers used to say, ‘Our products are too high-end for e-commerce, will the consumers follow?’,” Karine Szegedi, head of fashion and luxury at Deloitte Switzerland, said in an interview. “But they’re realizing -- even the more expensive brands -- that online is a trend they can’t afford to miss.”
Watchmakers typically enter e-commerce by first relying on specialty online sites such as Tourneau, before developing their own e-boutiques, Szegedi said.
This year marks the first time negative prospects for watchmakers’ main export markets outweighed positive ones since 2012.
Amid the gloom, the U.S. and India were tied as the market with the most potential, mentioned by 22 percent of respondents each, the study showed.
Deloitte’s survey was conducted with more 50 watch executives between May and July.