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Αποσυνδεδεμένος AntonisCh

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Is Time Running Out for the Swiss Watch Industry?
« στις: Μάρτιος 12, 2018, 20:54:39 μμ »
GENEVA -- You're 25 years old, basking in the glow of your first big job promotion and a hefty raise. Why not splurge on a big-ticket item?

Your father might have bought a fancy Swiss watch. But the thought doesn't occur to you -- for most of your life, you've used your cellphone to check the time. Instead, you book a getaway to Costa Rica, which you document extensively on Instagram.

Swiss watchmaking executive Jean-Claude Biver wants to change that thinking. From his perch at luxury conglomerate LVMH Moët Hennessy Louis Vuitton, the 68-year-old has seen younger generations drift away from his centuries-old industry. He is on a mission to get them interested in watches, before it's too late.

"It's the first time we have young people not buying watches," says Mr. Biver, who leads LVMH's watch division. "Time is everywhere. Why should these kids buy something for the wrists that tells them the same thing they get everywhere?"

Executives across Switzerland's watch industry have been wrestling with the same question. How can they convince young consumers that mechanical timepieces are relevant -- let alone worth the price of a car? At the same time, the tradition-bound manufacturers are fending off Apple Inc. and other tech companies that are disrupting the market with wrist gadgets that track your workouts and organize your social life.

The perils facing the Swiss industry have been laid bare by a sharp downturn starting in 2015. Chinese consumers, who drove a two-decade boom in the watch business, reined in their spending. That exposed watchmakers' growing disconnect with clientele in the West. Swiss watch exports globally fell 13% between 2014 and 2016. Last year, exports rose 2.7%, but still lagged well behind the luxury sector as a whole.

The decline has led watchmakers to lay off hundreds of workers and buy back thousands of expensive, unsold watches, prying off their jewels and melting down their metal components.

"It's not only a crisis," says Antonio Calce, chief executive of Girard Perregaux, a watchmaker based in La Chaux-de-Fonds, Switzerland. "We must rethink the existing business model."

Mr. Biver has helped LVMH's watch division power through the downturn. Watch sales at the conglomerate's two main brands, TAG Heuer and Hublot, hit record highs in each of the past three years. LVMH's watches and jewelry division, which includes TAG Heuer, Hublot and Bulgari, recorded sales of EUR3.8 billion ($4.7 billion) last year, up 10%. Sales in 2016, one of the industry's most difficult years in decades, rose 5%.

The executive acknowledges he is an unlikely candidate to reconnect the industry to young people. Today's youth culture sometimes mystifies him, he says. Aside from watches, Mr. Biver's passion is making his own cheese, produced from the milk of cows grazing on his farm in the Swiss Alps. Every year, he mails the cheese -- aged for months into fragrant hunks -- to friends and acquaintances around the world.

Mr. Biver credits a strategy that relentlessly targets younger consumers, even at the expense of traditions that have long endeared Swiss watches to older generations. Over the past few years, LVMH's brands have enlisted Jay-Z and various street artists to design watches, signed models in their early 20s as "brand ambassadors," bought ads in the virtual world of videogames and developed the Swiss industry's first smartwatch. He compares the approach to the Roman Catholic Church's 1960s-era reforms that allowed Mass to be recited in vernacular languages, not just Latin, ushering the church into the modern era.

"If you talk Latin to people who don't understand, don't be surprised that one day they won't come anymore," Mr. Biver says.

He relies on experts close to home: his 17-year-old son, Pierre, his 25-year-old stepdaughter, Carolina, and their friends.

On Pierre's recommendation, Mr. Biver chose Jay-Z as a brand ambassador in 2011 and began developing a watch with the rapper. Called the Shawn Carter by Hublot, after Jay-Z's real name, it came in two models: one in black for $17,900 and the other in yellow gold for $33,900. Both feature a transparent back displaying the watch's complicated inner workings. Hublot says the watches, with 350 made in all, sold out.

In 2014, Mr. Biver was dining at Nobu in London with Pierre and Carolina when his children noticed the model Cara Delevingne at a nearby table. Ms. Delevingne had walked the runways of fashion houses in the LVMH empire and starred in Burberry advertisements with Kate Moss, but the watch executive hadn't heard of her.

"You should take her!" the children said. "She is so cool, she is the future!"

"Huh?" Mr. Biver said.

He returned to his office in Switzerland's Jura Mountains and told his marketing director, Valérie Servageon, to "check Cara Delevingne."

"Who's she?" Ms. Servageon said.

Months later, Ms. Delevingne signed on as a brand ambassador for TAG Heuer. Since then, Mr. Biver has hired the street artists known as Alec Monopoly and Mr. Brainwash and renowned tattoo artist Maxime Buchi to design watches for TAG Heuer and Hublot. Other brand ambassadors include the 21-year-old model Bella Hadid and basketball stars Kobe Bryant and Dwyane Wade.

The Swiss industry faced a new threat in 2014 when Apple announced its smartwatch, which can display emails, monitor physical activity and serve as an electronic wallet. Mr. Biver feared the Apple watch, priced as low as $400, could compete for customers of TAG Heuer's least expensive models, which start at $1,000 and just tell the time.

But he also saw an opportunity: If TAG Heuer developed its own smartwatch, perhaps the brand could win a new, younger customer base for its mechanical watches.

The executive recruited computer programmers and electrical engineers to negotiate with global tech giants over the watch's software and hardware. The team chose Google's Android for the operating system and worked with Intel for the electronics.

Mr. Biver moved so fast that TAG Heuer's first smartwatch couldn't use the label "Swiss made." Because the smartwatch relied heavily on non-Swiss suppliers, it was disqualified from using the label.

TAG Heuer unveiled its $1,500 "connected watch," which had a step counter and could display emails and run other apps, in November 2015, just months after Apple's smartwatch went on sale.

For a second version of the watch, which came out in March 2017, Mr. Biver landed the "Swiss made" label by persuading Intel to move its production processes to a subcontractor in Switzerland. In total, TAG Heuer has sold roughly 100,000 smartwatches, Mr. Biver says -- encouraging the company that it can compete in the market.

The experiment, however, failed by one metric: It didn't spark new interest in TAG Heuer's mechanical timepieces. The company made an offer allowing customers to swap the smartwatch for a mechanical one for $1,500, but fewer than 10% of buyers have made the exchange, Mr. Biver says. The first version allowed buyers to make the swap after the two-year warranty expired, while the offer applied immediately to the second one.

"I must admit that I expected much more interest," Mr. Biver says.

Other watchmakers have started to try his strategies. Some have hired young celebrities as brand ambassadors. A few have started to develop smartwatches.

Swatch Group AG is designing a smartwatch that aims to safeguard the Swiss industry's legendary self-reliance. Unlike Mr. Biver, Swatch Chief Executive Nick Hayek doesn't want to depend on global supply chains controlled by big tech companies such as Google, Intel and Qualcomm for hardware and software.

"It doesn't make sense to reproduce something that your mobile phone can do," Mr. Hayek says.

Instead, Swatch is designing its own operating system and electronics for the watch. Relying on little-known Swatch subsidiaries that produce electronic components, the company is looking to design a smartwatch that can go a month or more without charging and wouldn't become obsolete until years after most gadgets. Swatch aims to release it by the end of the year.

Mr. Biver got his start in Swiss watchmaking when it faced a previous existential threat: the advent of the quartz watch, an electronic timekeeping technology far more accurate and cheaper to produce than any mechanical watch. In the 1970s, Japanese watchmakers such as Seiko flooded the global market with inexpensive quartz timepieces, destroying the lower and middle tiers of the Swiss industry.

Swiss manufacturers rebranded themselves to survive, limiting their production and marketing their timepieces as the works of craftsmen. Mr. Biver, who began his watchmaking career in sales and worked his way up, and his friend Jacques Piguet purchased Blancpain, a Swiss brand on its deathbed because of the quartz revolution. Mr. Biver directed its engineers to focus on designing highly complicated mechanical watches. He also raised prices and proudly declared the company would never make a quartz watch. Revenue soon began to grow. (Blancpain is now owned by Swatch Group.)

In the late 1990s, Chinese consumers began to turbocharge the recovery of the Swiss watch industry. Enjoying newfound freedom, China's rapidly growing ranks of wealthy consumers traveled the world, buying watches in Hong Kong, Europe, Los Angeles and New York.

Chinese demand helped the Swiss industry to ride out the 2008 financial crisis. Deep recessions in the West and Japan, however, hobbled buyers in the industry's traditional markets. A new cohort of younger consumers in the U.S. and Europe saw less value in spending thousands of dollars on a watch, retailers and analysts say. The mobile phone, meanwhile, was becoming ubiquitous.

(MORE TO FOLLOW) Dow Jones Newswires

March 12, 2018 11:30 ET (15:30 GMT)
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Αποσυνδεδεμένος sneakysneaky

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Απ: Is Time Running Out for the Swiss Watch Industry?
« Απάντηση #1 στις: Μάρτιος 12, 2018, 22:05:49 μμ »
Πάρα πολύ ενδιαφέρον άρθρο!  Βέβαια με εξαίρεση το apple watch, το οποίο λόγω μήλου συνδέεται με κοινωνικό στατους,  δεν καταλαβαίνω πώς τα smartwatch απειλούν την ελβετική ωρολογοποιία περισσότερο από τα ήδη υπάρχοντα φθηνά quartz.  Αν μη τι άλλο,  τα τελευταία είναι που μπαίνουν στην άκρη.  Απλώς επήλθε κορεσμός στην ασιατική αγορά.  Το άρθρο ξεκάθαρα λέει και πολλές φορές μάλιστα για το πώς η Ασία έδωσε ώθηση στις πωλήσεις τα τελευταία χρόνια.  Κι αποθρασύνθηκαν αυτοί, ανεβάζοντας τις τιμές...

Θεωρώ αστείο να λέει ότι το ρολόι που σχεδίασε ο jay z προσεγγίζει την νεολαία έναντι ενός smartwatch.  Ότι αυτός που είχε σκοπό να δώσει 400 Ευρώ για ένα έξυπνο ρολόι θα πει "άσε, θα κάνω υπομονή να δώσω 33 χιλιάρικα για το hublot"  :D.

Αποσυνδεδεμένος nostradamus

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Απ: Is Time Running Out for the Swiss Watch Industry?
« Απάντηση #2 στις: Μάρτιος 13, 2018, 12:08:05 μμ »
Πραγματικα πολυ ωραιο αρθρο.

Και εγω ομως δεν μπορω να "δω" τα πραγματα ετσι. Οσο η Κινα ηταν σε ανοδικη πορεια, "εκρυβαν" εκει το προβλημα των χαμηλων πωλησεων στον υπολοιπο κοσμο.

Ωστοσο συνεχιζω να πιστευω οτι το "ακριβο" Ελβετικο θα παραμενει ενα συμβολο οικονομικης ευμαριας και στατους οποτε καποια δεν μπορει να χαθει.

Καποιοι "λιγοι" γραφικοι θα συνεχιζουν να βλεπουν πολυ περισσοτερα στο μηχανικο ρολοι απο ενα απλο εξεσουαρ.

 

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