Swiss watchmakers go digital to show off new products, revive sales

Luxury Swiss watchmakers, usually not big fans of online retailing, are launching a new all-digital Watches & Wonders event on Wednesday to show off their latest products, hoping to revive sales hit by the coronavirus crisis.

Makers of high-end watches still largely rely on physical stores for sales, but the success of online platforms for pre-owned watches, such as WatchBox or Richemont's Watchfinder, have shown it is possible to sell luxury timepieces online.

Pandemic-related factory and store closures hit Swiss watch sales last year and have forced brands to boost their often tiny online business and generally rethink digital activities.

Guillaume de Seynes, executive vice president at luxury goods group Hermes, told Reuters one of the reasons Hermes' watch business outperformed the industry last year was that its customers were already used to shopping on hermes.com.

Hermes, known for leather goods, silk scarves and perfumes, embraced e-commerce much earlier than pure-play watchmakers, launching its transactional website in the United States almost 20 years ago.

De Seynes said he expected a strong recovery in the group's watch sales this year, with current trends broadly in line with the 28% increase in the final quarter of 2020.

Rene Weber, analyst at Vontobel, estimated that for the Swiss watch industry about 2% of sales in value terms were currently done online, but that the online share varied depending on the brand. Other analysts estimated the online share of sales at around 7% to 9%.

Most Swiss luxury watch brands - such as Patek Philippe and Rolex - have preferred to stick with traditional bricks and mortar stores to sell their products that can cost tens of thousands of dollars.

For Patek, selling online is still not an option, and a test run with retailers during the first lockdown confirmed that strategy, President Thierry Stern told Reuters.

"People don't want to buy a Patek online, the watches are expensive, you lose the beauty, the magic."

The family-owned luxury watchmaker sees a recovery this year after a 20% sales slump in 2020, but does not expect to return to 2019 sales figures yet. "That will maybe take a year or two, Stern said.

The brand has made some investment in its digital capabilities, hiring staff and setting up a studio to deliver high-quality virtual product presentations.

Small independent brand H. Moser & Cie also invested in digital technology ahead of the Watches & Wonders fair and said it was pleased these costs were lower than for physical watch fairs.

Watches & Wonders' official platform, which describes itself as "the biggest watch event ever to take place online", will give media and retailers access to presentations held by the 38 participating brands.

"It would be good if consumers could also participate via the Watches & Wonders platform," Oris Co-Chief Executive Rolf Studer told Reuters.

He said Oris had found other ways to connect more closely with its clients during the pandemic, citing a campaign relating the stories of local heroes on Instagram last year or a watch launch directly to its online community via Zoom.