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ARIEL’S ESSAYS: Watch collectors and enthusiast consumers kept the watch industry alive in 2020

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Ariel Adams.

People who consider wrist watch collecting a hobby or pastime are the unsung heroes of 2020 for the luxury timepiece industry. The collected activity and purchases by this group kept the industry going as much as possible amid the pandemic, but it is unclear if watch brands realize this, or how to leverage this fact for 2021 and beyond.

2020 began with uncertainty for the wrist watch industry even before the pandemic. Tradeshows were in flux, brands and retailers bitterly clashed, and the global marketing efforts of too many brands targeted to enthusiast consumers were so timid that typical observations from the watch lover community included statements like “is that brand still around?”

At the outset, 2020 did not see a highly functional watch industry. And then the COVID-19 pandemic began in earnest in March 2020, with the ominous foreboding that mainstream consumer spending and travel was about to entirely bottom-out. And that is exactly what happened. By most accounts the luxury watch industry in 2020 should have been doomed – but that is not what happened.

Instead, demand for luxury wrist watches remained impressively, if not stubbornly strong. How was this possible amid the context of a world were consumers were not celebrating, were not traveling, were not socializing, and where investor confidence was predictably low?

The answer is the enduring power of watches to please in their collection, study, and the personal experience of wearing them. In 2020 watches were being purchased as a form of “retail therapy,” as well as because a lot of people had untold amounts of free time to sit around and simply spend time on their hobby. That time was spent reading online articles about watches and connecting with like-minded enthusiasts via social media and private collector groups. What types of consumers populate these groups?

Yes, it is watch collectors and enthusiasts who were accustomed to watches bringing them pleasure. And “pleasure” has been in short order for many people in 2020. Thankfully, some hobbies like watch collecting can be enjoyed relatively remotely.

Timepieces are lovely, so why is it that mostly sophisticated enthusiasts were the ones to enjoy them in 2020? Mainstream consumers simply don’t have enough experience with high-end watches to understand more about their potential emotional value – aside from basic fashion or status-indicating purposes. Without social experiences allowing them to show-off, mainstream consumption of wrist watches more or less ended in 2020.

The remaining consumers of wrist watches in 2020 are two groups. These are the group of people who love watches, and the different but also important group of people who hope that luxury watches are a good form of alternative investment. For this latter group of individuals, buying watches was done in a hope that those purchases will increase in value, or will at least be good places to hold value.

While I have very strong opinions on how little watches-as-investments actually helps the watch industry in general, it is important to clarify that this mentality did represent a big part of watch sales activity in 2020.

Where do these investor-types learn about the watches to buy? Watch enthusiasts and pretty much only watch enthusiasts (or the retailers which hire them). So, whether watch collectors/enthusiasts were doing the purchases themselves, or influencing quasi-investors, they were responsible for the majority of wrist watch consumption in 2020.

Let’s step back for a moment and consider why watch collecting and enthusiasm proved so durable in 2020 despite the pandemic. A major reason for this is because even before 2020, the majority of wrist watch collector behavior was already online. In fact, the real-world part of being a watch collector in our modern times is only a small fraction of the time actually spend on the pursuit.

Most watch collector and enthusiast time before 2020 was already spent online. What 2020 did was simply push more of those individuals to purchase online. Little actually changed about being a modern timepiece enthusiast in 2020 to be honest.

What about the need to show off as part of the reason why people buy watches? Well… there is social media for that. Behavior patterns are simple but satisfying for internet-savvy watch consumers these days. Digital watch media makes them aware of products and brands.

The fact that a lot of watch collector hobbyists purchases watches during a depressing state of the world in order to make themselves feel better shouldn’t surprise anyone. What is surprising is how many watch brands entirely missed out on this sentiment by failing to invest in effective relationships with consumers.

Consumers purchase those watches, and then share them on social media. Those consumers able to purchase the most popular products get the most attention and likes. This is highly addictive behavior and helps explain why social media has in large-part been able to make up for the lack of in-person watch collector experiences. Thus, the practice of being a modern watch-interested consumer was already so digital – the pandemic barely phased its ability to thrive.

Purchase behavior for watches was certainly different in 2020, but buying volume stayed relatively high. Consumers did tend to spend less per purchase on average, but that is totally to be expected amid the context of a larger economic depression (even if the typical watch consumer is more economically insulated than the general public). Many retails corroborate this. Speaking to a number of watch retailers recently, I was surprised to hear them report that sales either remained stable or only decreased a little bit. This is despite showrooms being devoid of guests. How was this possible?

Retailers have been remotely communicating with existing or new consumers easily. In fact, most retailers I spoke with chose to retrain themselves to perfect their art of selling via the phone or via messaging applications (as opposed to in-person). With that said, these retailers also report that consumers who contacted them more or less already knew what they wanted to buy. This is plainly because those consumers where informed about watches via digital media prior to ever contacting sales person. This evidence further reinforces the fact that so much of the modern watch consumer experience is online.

The fact that a lot of watch collector hobbyists purchases watches during a depressing state of the world in order to make themselves feel better shouldn’t surprise anyone. What is surprising is how many watch brands entirely missed out on this sentiment by failing to invest in effective relationships with consumers.

The biggest problem the watch industry faces today isn’t a lack of interest in products. It is the fact that allowing social media to organically promote watches has allowed the deleterious outcome of the “network effect” to impact demand. The network effect more or less stipulates that the way internet media firms display and promote content, reinforces popular content and pushes down less popular content.

This might sound innocuous, but then you realize that out of hundreds of luxury watch brands out there, Instagram is more or less made up of images of watches from only five or six of those brands. This siloing effect of information about watches is the network effect in action. The implication is that a lot of watch companies have work to do if they are to effectively compete in today’s digital arenas where wrist watch product demand is both made and satisfied.

Watch brands tend to have a love/hate relationship with enthusiast consumers. It could prove challenging for many companies to focus their marketing efforts on watch enthusiasts and away from mainstream/fashion/or status-conscious demographics. For the most part, watch brands have a “tolerant” approach to enthusiast buyers. They appreciate the zeal and attention of collectors, but these precise consumers tend to be the most challenging to work with given their level of knowledge, product excellence expectations, and stinginess about allowing for ambitious corporate margins.

Watch consumers are hard to please, but when you do – they share that positive sentiment online which stimulates and reinforces the buying behavior of others.

Will 2021 see watch brands newly embrace the enthusiast consumer? Or will it see a renewed push to market a brand’s products to a more mainstream consumer once again? A lot of that depends on how quickly global marketplaces and travel opens up again, as well as how readily post-pandemic industries ramp up growth and innovation (which leads to the type of positive consumer sentiment that makes for a ripe luxury sales environment). Most watch brands I know of do not currently have effective marketing campaigns and strategies to continuously reach watch enthusiast consumers online. This implies that considerable investment and risk are associated with creating new marketing efforts to such a finicky audience.

Alternatively, ignoring the watch enthusiast consumer could rob a brand of potential sales performance in 2021. If mainstream consumption of luxury watches does not return for their company, and they ignore the obviously active watch enthusiast consumer, many brands could find themselves without enough buyers in the coming year. I appreciate the considerable challenge that strategizing for these outcomes presents, and my hope is that at least enough brands leverage the impressive activity and resilient buying behavior of watch enthusiast consumers in the year to come and beyond.

About the author: Ariel Adams is the founder and editor in chief of aBlogtoWatch.

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