Audemars Piguet CEO François-Henry Bennahmias had a restless mind during lock down and says he dreamed up a concept that will change the face of the watch industry when it is revealed.
In an interview with WatchBox director Brian Govberg, he muses about retailers without walls, dancing close (but not too close) to customers and how the pre-owned watch business will dwarf the market for new watches.
Mr Bennahmias is a glass half full kind of guy. Confronted with a world where all of its stores were closed, manufacturing ground to a standstill and the opening of AP’s cherished museum was delayed, he was using the time to plot the next decade of life in the luxury watch business.
In a WatchBox Studios interview with Brian Govberg, director at pre-owned watch specialist WatchBox, he suggests that the current crisis will fuel creativity for both watchmaking and the watch industry, and hints that Audemars Piguet is about to make a game changing announcement.
“We are going to see more creativity and innovation than ever before. We will need it,” Mr Bennahmias says. “If we are talking about AP, we have been working very seriously on what will come next. The good news is that, during confinement, our entire R&D department kept working. I saw in the last few weeks two major inventions that could change the world of watchmaking, and they are coming out of Audemars Piguet.”
It is notable that the interview was with Brian rather than his father Danny Govberg, co-founder of WatchBox and CEO of Govberg Jewelers, a multibrand authorised dealer in Philadelphia.
Mr Bennahmias might have made the choice of interrogator because of Brian’s youth because he says he listens and learns more from the young.
“I have been working at Audemars Piguet for 26 years now. That is a long time. The way I look at the picture now is that I want to listen more and more to the younger generation because we are going to see so many changes to the world we are living in. We are at the crossroad of so many innovations that will impact our lifestyles, our health, our behaviour and the way we communicate with each other that, if we are unwilling to learn, then we are going to be in trouble,” he warns.
“There is only one way to do this the right way, and that is to listen to our kids,” Mr Bennahmias continues. “We have to see what is happening in their world. The rules are not the same anymore and we are going to see a lot of things that we are not used to. We have to be willing to accept that things will never be the same again.”
As the country inches back towards normality, and global supply of watches resumes, the watch industry is grappling with how much of the change that has been imposed upon it during the pandemic will be desirable or unavoidable in the future.
Does walk up business matter in a world where appointments are proving so effective?
Should retailers invest in luxurious stores in the most expensive locations when customers seem to like being reached digitally or physically in their homes?
The only thing Mr Bennahmias is certain about is that change is inevitable.
“What was true before Covid will not be true afterwards. We have to adjust and change our behavior towards these clients,” he urges.
Back to his theme of listening to youngsters for clues, Mr Bennahmias reveals he set his company a challenge to learn from their children.
“Everybody was stuck in their homes and for the first two weekends I was shooting videos for all of AP’s 2,000 employees. On the third weekend I asked all employees to speak to their kids, whether they are 3-years-old or 25, and to ask them how they see life after Covid-19. I got drawings, e-mails, videos, letters; a lot of answers. Every single one of them spoke about love, but not the love of two people connected on Facebook. No, it was about wanting to hug their grandmother or grandfather. I want to be able to kiss my girlfriend. As humans, they all spoke about love as the first thing they need every single day,” Mr Bennahmias describes.
“The second thing was that they told their parents they have been affecting our planet for decades and decades. At some point parents are going to die, but we are staying here so you have to change the way you behave, wasting energy and not treating the planet correctly. That must change,” his story continues.
The process appears to have led Mr Bennahmias to a eureka moment.
“Three days after this conversation with AP employees, I got the idea of how we are going to change and adjust to these issues. I cannot go into details, but I can guarantee you this goes far beyond the watch industry, it affects the fashion industry, hotels, cars, jewellery, everything. We cannot deal with clients in the same way we have treated them for the past 30 years,” he teases.
Audemars Piguet does not typically sell its watches online or allow its authorized dealers to transact. The company made an exception during lock down and is reported to have sold and delivered 40 of the new [Re]master watch to customers world-wide.
Mr Govberg asks whether we might see an immediate change in policy that will open up Audemars Piguet to ecommerce. Mr Bennahmias dodges the direct question, but goes further into detail of how the company will engage with customers in the future.
He appears to have an aversion to words like shop, store, boutique or showroom — these seem to be throwback terms from the past.
When the company opens a flagship, he calls them AP Houses.
Then he announced a few years ago that all AP watches would soon need to be sold from under an AP roof (no mention of the store below).
Now, he is going even further and talking about there being no need for walls in the future of retail.
“I don’t need four walls to sell you a watch tomorrow,” he boasts.
“When we talk about luxury, we want to be touched in the part of your brain where emotions are triggered. Emotions could be for a watch, a piece of art, shoes, a handbag; anything. Emotions are between people. The computer will not give you an emotion,” he adds.
His musing is edging towards describing the growing trend towards clienteling, a technique used by retail sales associates to establish long-term relationships with key customers based on data about their preferences, behaviors and purchases. Know what a customer would like to buy and when they are likely to buy is far more powerful than standing behind counters waiting for random strangers to come into a store. It is also immeasurably more personal than most ecommerce systems manage.
Audemars Piguet is already working out how this will affect the future of retail and customer relationship management. “We are looking at what we can do tomorrow to trigger emotional responses a lot better. It is not a matter of being on top of our clients all the time, day and night. Luxury is like dancing. If you get too close, you step on each other’s feet. We have to relearn the notion of interacting with clients,” he describes.
Listening to young people is one way to bring fresh thinking to Audemars Piguet, looking for talent from outside the male, pale and stale Swiss watch industry is another. “Maybe the future is not looking to hire people that have been working in our industry for the past 10-20 years, but to look completely outside towards the world of hospitality. The next people we hire might come from the hotel or restaurant industry; we will see,” Mr Bennahmias hints.
AP’s CEO, along with other fresh thinkers including Georges Kern at Breitling, Julien Tornare at Zenith and Ulysse Nardin’s Patrick Pruniaux, are ready to challenge the glacially slow evolution of the Swiss watch industry and have all shown a radicalism when it comes to product design.
Last year’s introduction of the CODE 11.59 was one of the ballsier moves by Audemars Piguet, and it was not universally applauded, to put it mildly.
Diehard fans of the Royal Oak reacted furiously and at times witheringly as AP eschewed the angles and masculinity for which its sports watches are known in favor of curves and and a silk-like feel.
“When we launched that line, we got trashed on the very first day,” Mr Bennahmias recalls. But the people that went after us were a very small community. That is a part of today’s game. If you release a song, a book, a movie, a fashion show, you will hear from lovers and haters and you have to learn to deal with that.”
Had Instagram been around in the 1970s when Gérald Genta was in his watch designing pomp, he might have been trolled out of town for creations like the Patek Philippe Nautilus or AP’s Royal Oak.
That said, it was clear that sales of the CODE 11.59 were sluggish last year. “We ended the year with sales pretty much where we expected them to be,” is all Mr Bennahmias will concede on the matter.
Reaction to this year’s bolder coloured CODEs has been more positive, a sign that the collection is bedding-in. “We won’t really know within three months or six months, we will know in 5-10 years whether it is a success and becomes a new pillar for Audemars Piguet,” he concedes.
As a director of WatchBox, Mr Govberg could not end the interview without asking about the pre-owned watch market.
Audemars Piguet was one of the first major Swiss brands to talk about creating a certified pre-owned watch program so that customers could buy and sell back watches throughout their lifetime.
That was a few years’ ago, and little has been heard of the AP initiative since while the secondary market has exploded with innovative players.
Audemars Piguet is taking a far smaller slice of that action than its CEO appeared to want when he first spoke about CPO, but remains convinced it is a huge and growing opportunity.
“I was the first to talk about the pre-owned business, which I believe could be ten times bigger than the primary market. This [pre-owned] business is going to be so big because you have so many players in that space and there are going to be a lot more. The brands also will do it on their own, so we will see what happens. We should not close the door on any possibility because everybody is still learning how to play in that space,” Mr Bennahmias concludes.