High-end mechanical watch sales continue to grown, driven by
strong demand in Asia and from affluent Millennials. Millennials seek
simplicity, personalisation and transparency when buying a high-end mechanical
watch. Traditional luxury watch manufacturers need to focus on vintage-inspired
design and on developing their digital sales and marketing capabilities.
Luxury analog watches are making a comeback. Paving the way for the high-end mechanical watch resurrection are none other than the Millennials. However, luxury timepiece manufacturers need to be aware that the younger generation of watch buyers are not on the market for “old school luxury”. Instead, affluent Millennials seek simplicity, personalisation and transparency when choosing their luxury timepiece.
As a result, high-end mechanical watch manufacturers are focusing on new product launches and developing digital sales and marketing channels to grow. Vintage-inspired designs and online collaborations with influencers and bloggers are particularly important.
High-end mechanical watches are as relevant today as they were before. However, luxury watch marketers need to be aware of the generational shift towards modern luxury. This article explores the definition of modern luxury, with a particular focus on the meaning of the word for Millennial consumers, and how prestigious analog watch brands can leverage digital to appeal to a new and savvy generation of modern luxury consumers.
Millennials Still Favour High-End Mechanical Watches as a
Luxury Purchase
A recent survey from Deloitte found that Millennials remain highly attracted to high-end Swiss watch brands. The research shows that Millennials would indeed favour an analog luxury timepiece over a digital smartwatch if given CHF 5,000 (USD $5,135) to spend on a gift watch
A significant majority of Millennials surveyed in China, the UK and Italy would choose a luxury mechanical watch over the latest release of a smartwatch, every year, for the next ten years.
The respondents in the United States were a notable exception, however. An almost equal proportion of Millennials in the US would choose a smartwatch versus a mechanical watch.
Millennials in Asia Drive Global Luxury Watch Sales Growth
The latest data released by the Federation of the Swiss Watch Industry (FH) shows that global luxury watch sales continue to be driven mostly by younger consumers in Asia. Hong Kong (fueled by Mainland Chinese tourists) and China are driving respectively 35.7 per cent and 21.7 per cent of the yearly growth.
The United States, the second largest market for luxury Swiss watches after Hong Kong, also benefited from a strong 26.3 per cent growth but remains 6.6 per cent below the 2016 sales levels. The same goes for most of the other markets in the top 10 listing.
It’s important to note, however, that while we’re seeing growth nearly everywhere (with the exception of the UK and Italy), the sales of high-end watches haven’t reached the pre-crisis performances of 2016. Aside from Hong Kong and China, Singapore is the only other country that enjoys a modest 4.7 per cent two-year growth. And here again, it’s mostly the overseas Chinese tourists that are driving Singapore’s growth.
So while the luxury watch industry is optimistic for the
future, total sales haven’t fully recovered to their pre-crisis levels yet. The
impact of the anti-corruption campaign in China can arguably still be felt
through the industry.