Connected watches aren’t the answer to falling sales or hooking up with new customers, the CEO of Omega, the world’s second largest watch brand says.
Raynald Aeschlimann, chief executive of Omega, told The Australian Financial Review that the brand wanted to connect with Millennials to expand its customer base and bridge the gap to market leader Rolex – but that this didn’t mean it was looking to make a connected watch.
“Millennials doesn’t mean digital, it means young people and new ways of communicating. We’re well prepared to talk to Millennials because they have a good feel for luxury items, they’re the generation that will respond to a brand that is prepared to talk to them,” Mr Aeschlimann said.
“They were born with computers, they get their information from everywhere, they’re on Instagram. We need to use their ways of communication to connect. In terms of purchases it may not be today, but in the future, the next years, this is the generation that will be loyal to us.”
In Sydney with model and ambassador Cindy Crawford to open a new boutique – Omega’s largest worldwide – Mr Aeschlimann acknowledged the need to promote the category as a whole to this younger clientele.
“We have to motivate them to buy watches because if I compare it to 20, 30 or 40 years ago, our competition is not only watches but other things they’re spending their money on – travelling overseas, buying a new car, fashion, a new bag.”
His comments come against a background of two years of declining sales for Swiss watch brands, the worst drop in demand since the 1970s.
Rolex doesn’t release figures but is estimated to sell about a million watches a year, while Mr Aeschlimann said Omega sells “more than 650,000 watches” annually.
While Omega is the second largest traditional watch brand by value, Apple touts its Apple Watch as the second largest selling wrist device after Rolex. Apple reported record numbers in both units and revenue on January 31. Analyst Canalys estimated demand for the device grew by 12 per cent last year, with sales approaching 6 million units in the December quarter alone.
Despite such figures, Mr Aeschlimann said connected instruments did not interest Omega.
“We don’t build phones so why should we build a phone for the wrist?” he said. “The day we have an Omega phone we might have a connected watch.”
“It’s time to prove to consumers that what they’re buying has a high value in terms of technology and to explain why they’re paying such a high price. We’re in the luxury accessory world where tradition, history, authenticity – things we have in our DNA – are key. But you also want your watch to be on time. We listen to our customers: to them luxury means precision.”
As for supplanting Rolex at the top of the tree, Mr Aeschlimann said “we’re not in a Formula One [race], rather it’s about potential. If there is someone in front of you, there is space for you to grow even more. But it’s not just about market share. There’s also, if we do it right, what we can do for the Swiss watch industry.”
In that respect Mr Aeschlimann will be looking to repeat history. Omega is part of the Swatch Group. Swatch founder the late Nicolas Hayek snr was credited with saving the industry from its near fatal slump four decades back, refocusing on exclusivity in its traditional timepieces and introducing fresh product at the lower end in the form of Swatch watches.
This article by Bani McSpedden first appeared in The Australian Financial Review.
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