Smartwatches overtook traditional watch sales in the holiday quarter of 2018, but the industry’s hope that Apple Watch customers today will be Swiss watch wearers in the future may be coming true, according to research by retail analyst The NPD Group.
The strong showing for smartwatches in Q4 demonstrates their rising power at the traditional gift-giving sub-$500 price point, but over the whole of 2018 and into the first quarter of 2019, traditional watches remain on top by sales value.
Traditional watches captured nearly two-thirds of industry dollars in Q1 2019. While smartwatch sales surpassed that of traditional watches during the 2018 holiday quarter, traditional watches have otherwise represented the majority of the market’s annual sales, according to the March 2019 NPD Watch Total Market Report.
“Traditional, stand-alone watches are asserting their relevance in a changing market,” said Reginald Brack, watches and luxury industry analyst, The NPD Group. “While smartwatches deliver seemingly endless capabilities, and continue to be an important source of growth for the overall watch market, they aren’t replacing the value many consumers still place on traditional timepieces.”
Consumers spent more than $9 billion on watches in the 12 months ending March 2019, nearly $5 billion of which was on traditional, standalone watches.
While traditional watches are facing some growth challenges, there are segments delivering significant dollar gains to the industry. Sales of mechanical and 40mm watches both grew double-digits over the past year.
Rolex might have been frustrating customers looking for its steel sports watches, but attempts by authorized dealers to steer sales towards the more available precious metal models appears to be paying off as NPD reports that watches incorporating precious metals grew double-digits in the last 12 months, due in part to challenges with sourcing many popular stainless steel models.
“Consumers are focused on more manageable sized, precious metal watches, and the human-powered mechanical options are outperforming their battery-powered brethren,” said Brack. “The consumer is becoming better educated about the work, craftsmanship and detail involved in creating and manufacturing a living, breathing mechanical movement, resulting in an exciting opportunity for manufacturers,” he adds.