- Representatives of the Swiss watch industry see great potential in digitization: two-thirds also want to maintain customer relationships digitally
- 100% of respondents want to record the "life cycle" of watches using technology such as blockchain but not only
- Two-thirds see little or no value in currently being present in the metaverse as it is
- Two-thirds of respondents see great potential in digital trade with used watches, the so-called pre-owned market
Zurich, 27 April 2023 – Digital technologies have helped the Swiss watch industry through the Corona pandemic. But what does it look like now that retail stores are open again? How is the industry using digital channels? Where does it see potential for its own business? A survey by the auditing and consulting firm EY shows: The representatives of the Swiss watch industry have clear ideas about how they want to use the new possibilities offered by digitization discovered mostly during the pandemic, but they also hold different positions on individual application possibilities.
Two-thirds of the companies surveyed state that close and individualized customer contact should be maintained not only in sales stores, but also via all existing digital channels. Two-thirds also see great potential in the digital trade with used watches, the so-called pre-owned market. And 100% of the Swiss watch industry representatives surveyed believe that the accurate tracking and recording of the "lifecycle" of watches will have "great" or "medium" value for the watch industry. Blockchain could be one of these technologies, however connecting data set is often a solid alternative.
For the survey on digital trends in the Swiss watch industry, EY interviewed well-known watch groups, individual brands of groups, independent watch brands and watch retailers.
Customer contact: Individual and digital at the same time
Customer contact, which has traditionally been individualized in the watch industry, is still considered to be very valuable, but should be conducted on all of today's common channels - including digital. This is reflected in the question about the relevance of special and personalized one-to-one contact with customers via digital channels. 67% of those surveyed highly value a direct and individualized customer relationship. Although only 20% of respondents state that they have all the capacity to serve customers individually on all digital channels, 60% are of the opinion that they have at least some capacities. At the same time, 73% of respondents intend to build further up this capacity within a year. “There is no replacement to a face-to-face experience, however. Customer relationship digitalization has strengthened this connection with a personalized and uninterrupted communication flow”, says Jean-Marc Chevrot, Partner and Technology Consulting Head of Romandie at EY in Switzerland. “The “maison” should invest in aggregating the customer data into a centralized interaction between their sales channels and their customers, supported by effective client management applications such as a CRM solution and immersive solution like virtual try-on, Chevrot adds.
The representatives of the Swiss watch industry surveyed were ambivalent about online catalogs, shopping assistants, high-quality (3D) visualizations and virtual try-on of wristwatches. 33% and 27% respectively rate the expansion of their digital customer experience as strongly to moderately relevant. At the same time, 33% and 7% believe that these options have "little" or "no" value to their business. The group surveyed was split on the offer of being able to put together a personalized watch using an online configurator, technically feasible, but a manufacturing challenge. A small majority appreciates the online offer for customers. “Although digital technology cannot replace the physical experience, it can be used as an extension to elevate the customer experience”, says Chevrot and adds: “The customer experience is led by the product and not the channel.”
Current skepticism towards Metaverse and NFTs
Retailers, watch brands and large watch companies are comparatively critical of the metaverse: A majority see little or no value in currently having a presence in the Metaverse. These assessments are also in line with the currently available opportunities and capacities to engage in the metaverse: 47% each state that they only "partly" or "not yet" have the necessary capacities. "The survey shows that, from the watch industry's point of view, the Metaverse is not yet sufficiently established to be of great relevance. Most respondents see the potential of this virtual world in the long-term future," says Julian Segantini, Technology Strategy Lead at EY in Switzerland.
This is also reflected in the responses to the question of by when they would like to build capacity for a metaverse presence: 67% say that such capacity should be built within a period of more than 5 years. 27% would like to be ready within one to three years, and only 6% would like to build capacity for the Metaverse within a year. Similar skepticism can be seen on the topic of NFTs. The sale of one-off digital products as NFTs is seen by only 13% as "valuable" for their own business. 20% assess the value of NFTs as "medium". However, most of the respondents see only "little" or "no value" in NFTs.
Digital purchase models and watch services
There is broad agreement with regard to purchase and financing models that are to be made possible via digital channels: 43% of respondents each believe that these have a "high", or "medium" value for the business. “Digital purchasing expands the accessible market both geographically and in terms of consumer trends”, says Segantini. With a view on specific brands and their customers, Elsa Jaubert-Albarèdes, Technology Strategy at EY in Switzerland, says: “Even though some brands do not have target customers that need credit or payment facility, watchmakers keep in mind that this is a lever to extend their market shares. The challenge is to sustain brand equity and identity.”
The representatives of the Swiss watch industry also agree that the services after the purchase of a watch can be optimized and expanded with digitalization. 87% of the respondents believe that the optimization of these services will have a "high" or "medium" value for the business. Digitization should not only make the service process more efficient and faster - for example, by opening a service order via website. Transparency can also be increased by enabling customers to follow the status of work on their watch online.
Trade in used watches (“pre-owned”) via digital platforms and channels
In the digitalization of the trade in used watches, the so-called “pre-owned” market, which has been growing for years, 66% of respondents see a "high" or "medium" commercial value. "The positive development of this market has mainly to do with young customers who belong to the Millennial and Gen Z, for the new generation propriety is considered differently and there are no more barriers into the fact of buying something that used to belong to someone else before, it is even the contrary", says Jaubert-Albarèdes. These young buyers already account for almost a third of consumers in the luxury goods segment.
Agreement within the Swiss watch industry is even greater when it comes to digitally recording the "life cycle" and history of watches: 100% of respondents believe that accurately tracking and recording this life cycle will have "great" or "medium" value for the watch industry. «Track the lifecycle of a watch is fundamental for all brands, all the more when we know that some of them have no information of the watch after it left the manufacture.”, says Jaubert-Albarèdes. The lifecycle traction will help prevent counterfeit and grey market. It gives precious data on the sell-out and on customers and it offers the ability to certify the authenticity of a watch for customer that bought pre-owned.
The results of the survey show that today watchmakers are at a good level of standards in terms of digital trends adoption. However, the challenge they almost all face is to gather data and make the most of it to really provide an integrated experience to their customers, a true omnichannel experience.
