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THE BIG INTERVIEW: Citizen’s Jeffrey Cohen unveils group’s plans for 2019

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The offices of Jeffrey Cohen, president of Citizen Watch America, got a great deal bigger and busier in 2018 as Bulova, Frederique Constant and Alpina all moved into his workplace at the Empire State Building. Integrating the acquired brands into a single group while maintaining their unique identities for consumers is a herculean task, but a project that could end up with four market leaders in each of their price segments in the United States. How is the project progressing? WatchPro’s Rob Corder sat down before Christmas with Citizen’s Mr Cohen to find out.

WatchPro: It has been a fascinating few years for Citizen Watch Company following the acquisitions of Bulova, Frederique Constant and Alpina. Can you tell me how the integration of these businesses has been going for you in the United States and how becoming a much larger and diverse group has affected your operation?

Jeffrey Cohen: During the summer of this year we moved our executive offices, our sales, marketing, product development and planning teams into one place here in the Empire State Building, which is very exciting. One of the objectives of the integration has been to spread best practices across all of our brands and we are really starting to see results from that. We have a best practice committee drawn from each of the brands that meet to discuss what is working well.

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Last month we put the final piece of the puzzle in place when we completed the full integration of all of the brands under Citizen Watch America. Our office is the first of the subsidiaries in the world to be managing the sales, marketing and distribution for Citizen, Bulova, Frederique Constant and Alpina all together.

In addition our warehouse facility in California has been shipping watches for all of the brands, and in the month of October we had a record month for the company as we were processing all orders for all of the brands.

Citizen and Bulova have now migrated to our new ERP (enterprise resource planning) system and we have plans in place early next year to bring Frederique Constant and Alpina onto the same system. In order to maximize output from our warehouse management system, we need all the brands to be on the same system. That management system plugs into the ERP system.

Having all of the brands on one system will not only help us improve efficiency in shipping, it will also help us on consolidated reporting, which is key, and also having the financing and crediting all in one place is very important to us.

It is important to say, though, that while we are consolidating our back end systems and sharing best practice, we will not integrate any further than that. We want to preserve each brands identity and integrity. We will keep sales, merchandising, marketing for all of our brands very separate. There are going to be certain firewalls in place to make sure of that.

So there is a lot happening in the front office and the back office so that now we can really focus on best practice and driving productivity so that we serve our retailers and end consumers better.

WatchPro: Can you give me an example or two of what you mean by best practice, and how that might improve things for your retail partners and end consumers?

Jeffrey Cohen: From an organizational point of view, it is really about looking at the data. One example is that we have just put in something called Zendesk, which is an operating platform for our call centre that measures all of our calls and makes sure that we get back to everybody in a timely fashion. It gives us a dashboard so that we can see how people came to us — which touchpoint — whether that is by phone, e-mail, social media. It helps us get back to people and give them the right response in the best possible time. That is something that we measure and make sure that we are delivering excellence to retailers and consumers.

Other best practice might be about dialing up all the efficiencies in the business in a lot of different ways such as how we communicate internally, how we maximize the impact of the investment we have made in things like the ERP system and the warehouse management system. Also, when we are looking at data, we have to make sure that data is right and consistent so that when we make decisions, it is based on what is real, not just coming from our gut instinct.

WatchPro: It sounds like the way Silicon Valley companies like Intel and Google have developed management and leadership based on key objectives for the company and then measuring everything that contributes towards achieving them.

Jeffrey Cohen: That is absolutely right. A lot of the benchmarking we are doing when it comes to best practice is not measuring ourselves against other companies in the watch industry. We have to do a much better job than the watch industry. We are benchmarking ourselves against power brands that have done this for many years. The watch industry is very far behind what we are doing. This is a very confident and assured decision I have made and, based on what I have seen in the watch industry over many years, we need to take a lead in showing how it should be done.

WatchPro: How are your retail partners reacting to the work you are doing with the new brands and the best practice operational changes you are describing? Is one of the challenges that you need your systems to extend outwards to your partners so that they can benefit from the efficiencies and improvements they deliver?

Jeffrey Cohen: We are really using data now to make all our decisions, whether that is market share data or information we are getting from systems like the Zendesk dashboard. We are really listening to our retailers in a whole different way and having a two-way conversation. We need to get away from the one-way conversation that has always been very big in the watch industry. We need to understand what is happening out there.

We are also sharing this information with our retailers so that they can make better decisions with our brands and come up with new ideas to drive their business. With store traffic being down and online being up, it is the job of a leading company like Citizen Watch America to bring ideas to retailers so that they can look for ways of differentiating themselves from everybody else.

WatchPro: And with your much broader product lines from the four brands under Citizen Watch America, your retailers have the potential to go into different markets. How are they responding to that?

Jeffrey Cohen: There are a lot of changes going on in the watch industry and our retailers have been very supportive and enthusiastic about what we have been doing with the integration. We can now offer a full complement of watch brands from accessible luxury Swiss to mid-priced accessible luxury from the top two bestselling Japanese brands in the market. We have a reputation as the leader in the mid-priced affordable luxury sector and we have always provided retailers with a level of comfort when working with us. They have a long history of working with us; they understand our capabilities; they understand that we stand behind them focusing on sell-through, not just sell-in. We want to help them become more productive and bring KPIs to their business.

They have seen Citizen grow to become the number one brand in the market from $50 to $1500 price point and, talking about market share, Bulova is now right behind Citizen in the number two spot, having been number four three years ago. Now we have a much bigger piece of the pie. The pie is not growing, as you know, but we are getting a much bigger piece of it.

These results are testament to the direction of the company and the leadership in the company. We are expecting — and we have told our retailers this — that we are expecting to see the same kind of results from Alpina and Frederique Constant in a few years’ time. We are very focused on succeeding with watches from $100 up to over $10,000.

We speak to our retailers about a theme called The Power of One: one organization delivering excellence and over-delivering on consumers’ and retailers’ expectations. That is what we are focused on.

WatchPro: You say that, besides the integration at the back end and the operational efficiencies that brings, your brands are free and encouraged to pursue different strategies. Can you tell me a bit about what we will see from all brands next year?

Jeffrey Cohen: 2019 is a very exciting year for us. For Citizen we will be celebrating the 30th anniversary of Promaster, so you can expect to see key product launches as well as a very large scale global marketing campaign. We don’t just think of Promaster as just another watch, they are instruments for professionals and part of the DNA of who we are as a company.

In the first quarter, Citizen will be launching new models from our Disney partnership including Mickey Mouse and Marvel franchises. Throughout the year we will be pulsing in new products to support the Disney franchises.

 

Citizen watches created in conjunction with the Disney-owned Marvel franchise.

 

As part of our alliance, you will see us activating at the red carpet premiere of the next Avengers movie and we are looking forward to presenting our watches at Comic Con so we are engaging with this incredible fan base.

We want to be very thoughtful with this alliance. We are not just taking a picture of Mickey Mouse or a Marvel character and slapping them on dials. We are doing our interpretation of how we want the watches to be from a merchandising, experience and product point of view both online and with our retail partners.

We just released out new TV commercial this week, which aired on GMA Day, and we had a spot talking about the Disney alliance. It will also run on Thanksgiving Day during the afternoon NFL game on FOX and will be featured as part of the brand’s media rotation during Fox NFL games for the rest of the year as well as part of holiday TV buys across multiple national networks and cable..

WatchPro: When you first told me about that alliance earlier this year, I don’t think I properly appreciated how big and broad it would become.

Jeffrey Cohen: We have the rights to use a new Disney song every year. We have more and more Citizen clocks going into Disney parks all over the world. The opportunities are endless. We cannot discuss everything we are doing at this point, but it is a 12 year long agreement.

Going back to what we were discussing regarding best practice, I cannot think of any company we can learn more from than Disney. Our management team is working with theirs and we are aligning ourselves with best practice. We are working together on how we serve the consumer, how we build excitement for our products. Nobody does it better than Disney.

We are becoming part of the entertainment business, and that is where the market is going. People are seeing our watches everywhere, which can be so much more effective than just running adverts in newspapers or magazines. We want to be where people are excited and having a good time.

 

Citizen clocks are appearing throughout Disney resorts in the United States.

 

WatchPro: You said earlier you are benchmarking yourself against the best companies in the world, not just the watch world. Working with Disney must be right up there in terms of an opportunity to share ideas.

Jeffrey Cohen: That is the idea. Brands can go out and put a character on a watch, but that is only a small part of it with this alliance. This is about taking our company to the next level. As they grow, we will also grow. You will see some amazing things coming from us together. We want it to take us into the realms of becoming one of the great power brands in the world.

WatchPro: What’s the focus for your other brands besides Citizen?

Jeffrey Cohen: With Bulova we are continuing to develop and push our partnership with Universal Music. That is a relatively new agreement. Universal Music is the world’s biggest music company by market share (according to MIDIA research), plus Bulova has the Grammy’s and Latin Grammy’s. We are pushing the association between music and Bulova across social media and digital platforms in a very big way. That cuts across all of the demographics. We just finished with the Latin Grammy’s and it was a huge success across social media.

 

Nile Rogers is a brand ambassador for Bulova, which is building on its long standing association with the music business.

 

For Alpina we just signed an agreement with the National Parks Foundation to be a sponsor of the Rivers & Trails 50th Anniversary. You cannot believe how many people go to the parks, and 50% of visitors are from outside the United States.

Frederique Constant has some really nice product coming out for Basel. We have our alliance with Gwyneth Paltrow continuing. The product for Basel is great, but I cannot tell you any more about it at this point.

 

Gwyneth Paltrow continues as a charity brand ambassador for Frederique Constant into 2019.

WatchPro: In the United States you could stop people on the street and most of them would know Citizen and Bulova, but I assume nine out of 10 people would not even know Alpina and Frederique Constant are watch brands. Is that fair?

Jeffrey Cohen: Yes, but we see these brands as babies and they are going to grow up under us. We are going to put a lot of money into marketing and infrastructure so that within a few years they will come on strong.

We see a lot of white space in the market that has been vacated by other brands so there is a big opportunity to grow market share with those two brands. Alpina will grab share in the $500 to $1500 space, while Frederique Constant will grow in the $1000 to $5000 sector. We think our competition has created space and there is a need for these watches, especially in the ladies’ space.

 

Alpina has a partnership with Americas National Parks.

WatchPro: How is retail changing in the United States, and consumer behavior is changing, and how is Citizen Watch America adapting and getting ahead of these issues?

Jeffrey Cohen: We have prepared ourselves for the changes in consumer behavior by launching state-of-the-art websites for both Citizen and Bulova, so that when consumers are researching, prior to purchase, they will find everything they need on our digital flagships, which is what we call our websites. We want to provide all of the information they need to make an informed purchase including multiple product images and customer reviews. We don’t just do this on our site, we broadcast onto our retailers’ sites. We have product videos, interactive setting instructions; everything is almost like self-service on our digital flagships.

For customers that want to go to a brick and mortar store, we make sure that the sales people they meet are better trained by us than by any other brand. We have online training applications as well as in-store training.

Today’s consumer expects delivery in one to two days. We handle that with our ecommerce fulfilment operation at our warehouse. That is working for some of our major accounts. And we are currently testing a solution with our independents that lets them use the back end from our ecommerce platform to fulfil orders for them as well.

Due to our strong brand share position in the US market, we have been able to benefit from reducing footprints from lesser watch brands at retail. Retailers are looking for productivity per square foot, and right now all of our brands are producing.

In fact, we have been able to expand our footprint in certain retailers while other less productive brands have been pushed out. This means we are getting a much bigger piece of the pie.

WatchPro: How do your retailers react to you selling to consumers from Citizen.com and Bulova.com? This is competition they did not face even three years ago.

Jeffrey Cohen: We have a large network of retailers and our first priority is to support them, but there are certain people that want to buy from the brand. Our digital flagships were created to provide information and give consumers everything they need to know during the purchase process.

WatchPro: Citizen and Bulova have huge numbers of doors with your large accounts such as Sears, Kay, Kohl’s, JC Penny, etc., and these partners have massive online scale and sophisticated ecommerce plays of their own that must shift a whole lot of your watches. But my fear would be more for the smaller independents with one or two stores and underdeveloped websites. These are the guys that are more fearful of your digital flagships.

Jeffrey Cohen: That is why we are beta testing something now with the independents that aims to come up with a way that allows them to use our platform as well. We can do the shipping for them and everything. These are the guys that are a little bit for challenged with the transition to digital and we are trying to give them a one-stop answer to delivering online. As far as the big national accounts are concerned, we give them all of the same assets that we have on our digital flagships that can be used on their sites.

The world shifts, and we are going to shift with it as a leader, not a follower. We are going to do things that are not traditional to our industry, but it will always be done in a way that makes sure our retailers are successful.

WatchPro: Baselworld has been one of the hottest topics for the watch industry over this summer with Swatch Group and others pulling out of the show and a debate opening up about the best way to communicate with retailers, the press and consumers. What is your view?

Jeffrey Cohen: Marketing and communication has really gone digital, and we have embraced that change. Two years ago we hired a chief digital officer, and we have been growing the digital team ever since. We have expanded the use of digital tools for things like cloud-based training. Our customer service portal, Zendesk, and our newly launched My Citizen App are examples of how we are advancing.

As far as Baselworld is concerned, it is still the leading global platform for the watch and jewelry industries, and we are working on our booth installations for the 2019 show, which will be fabulous. We do not have any plans to change in the future.

Like other brands, we were surprised to hear about companies deciding not to exhibit and we wait to see how this year’s fair goes. Even though we see our customers at JCK and market week, they do not get the same experience as at Baselworld. We believe Baselworld plays a big role, and bringing people to a thoroughly branded environment, which we create at the show, is very important.

WatchPro: Has there been any discussion on whether your stand might move position in 2019? You have one of the biggest displays on the first floor of the show, but the ground floor of Hall 1 is the A1 location.

Jeffrey Cohen: I think everything is status quo. We have a phenomenal space and we are very happy with it. I do not see much change. People come and find us so the location is not an issue.

WatchPro: What do see is the key role of Baselworld in the future? Is it a buying opportunity for retailers, a PR opportunity speaking to the world’s media? A date in the diary by which you have to get your collections ready?

Jeffrey Cohen: It is all of it, but the key is that it is about expressing our brand values. It always has been and will always continue to be.

WatchPro: It appears that some brands are looking at the colossal investment they make annually at Baselworld and wondering whether that can be split up and spent at more events around the world that bring them closer to their customers.

Jeffrey Cohen: I cannot speak for other brands. Basel is a significant investment, but our brands are global brands and Basel is the one true global show so for now we will continue to exhibit there.

Tags : Citizen Watch Americajeffrey cohenThe Big Interview
Rob Corder

The author Rob Corder

1 Comment

  1. Excellent interview. I’m proud to be a Brand Ambassador for Citizen Watch Company, Bulova Division. They’re a great company dedicated to excellence in all aspects. I am excited to be involved in the future of this company and “The Power of One”.

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