FHH Watchmaking Trends Report 2018

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FHH Watchmaking Trends Report 2018 FHH WATCHMAKING TRENDS REPORT 2018 Influencer Louis Ferla Influencer François-Xavier Overstake CEO ofPiaget Chabi Nouri Influencer Kristian Haagen CEO ofBvlgari Jean-Christophe Babin Interviews Figures Introduction Contents Carson Chan CEO ofVacheron Constantin ______24 24 27 16 21 11 6 3 5

3. E-commerce 2. Second-hand 1. Customer service Forecasts A creative force Useful &desirable Slim &precise Movements Vintage-mania Affordable icons Classic rules Design The reign ofcolour Making itpersonal The steel deal External Parts ______— 2 20 22 28 25 10 19 14 12 18 13 15 17 9 8 7

de laHauteHorlogerie About Fondation Impressum/Disclaimer Conclusion SIHH Best Picks Baselworld Philippe Dufour Watchmaking consultant andtrainer Gianfranco Ritschel Designer Emmanuel Gueit Designer Eric Giroud Master watchmaker ______

34 32 33 35 31 CONTENTS FHH WATCHMAKING TRENDS REPORT 2018 the world their latest products. part –wherethey canexhibit, explain andshow their “fashionweeks” events –trade forthemost Watch brands, like HauteCouture houses, have never failstoreinvent year itself, afteryear. Fine technical know-how atwork that inanindustry questions, given thevast amounts ofcreativity and twists canwe lookforward to? arelegitimate These novel shapes, mechanicalinnovations ordesign what willthenew trendsinwatches be? What yearEach begins with thesame interrogation: INTRODUCTION

— 3 INTRODUCTION FHH WATCHMAKING TRENDS REPORT 2018 has yet “inthemetal” presentations replaced much digitalistransforming sales, nothing part ineither-orboth -isamust. However make anameoninternationalmarkets, taking brand withglobal distribution, orlookingto and jewellery show, 1917. since inBasel For any weeks laterby Baselworld, theworld watch held its28 la HauteHorlogerie (SIHH)inGeneva, which rolling, inJanuary, isSalonInternationalde arerevealed.months tocome Startingtheball trends set todominatewatches for thetwelve It’s gatherings, industry here,atthese that the INTRODUCTION th editionin2018, followed afew — 4

by the trendsspotted atSIHHandBaselworld. highlights of2018 inwatchmaking, asillustrated tothis,complement we have mappedoutthe year's launchesinanonlinepublication . Asa they have anin-depth compiled review ofthe dates inthewatchmaking calendar. 2015, Since with many years' experience two ofthese key The authorsofthisreportareinsideobservers ismovingthe industry ahead. tounderstand whenseeking howessential temperature two ofthese events istherefore mechanicalmarvels.of these Taking the INTRODUCTION FHH WATCHMAKING TRENDS REPORT 2018 FIGURES

CHF bn

10 15 20 Companies 0 5 Swiss watchexports2017 Workforce andcompaniesintheSwisswatchindustry Source: Federationof the SwissWatchIndustryFH 1 0 1 2 0 2 5 5 5 0 00 0 00 0 0

0 0 4.9 0 Source: 2016censusofstaandcompaniesinSwisswatchmakingmicrotechnologyindustries Electronic wristwatches 2012 15.3 20.2 1950 Companies 4.6 1955 2013 16.0 20.6 1960

4.4

Workforce 1965 2014 16.6 21.0

Mechanical wristwatches 1970 4.0 2015 16.3 1975 20.2 1980 3.6 2016 14.7 1985 18.3

3.5 1990 Total 2017 15.3 18.8 1995

2000

2012 21.4 2005 + Movements) (Electronic +Mechanical Total exportvalue 2013 21.8 +1.9% 2010 2014 22.3 +1.9%

2015 2015 21.5 -3.2% 0 20 000 40 000 60 000 80 000 100 000 — 5 2016 19.4 -9.9% variation 2017 19.9 +2.7% Workforce

Market in € bn Online salesofpersonalluxurygoods TOP 10-Swisswatchexportspercountryin2017 20 10 2000 15 2500 1000 0 1500 5 Source: Federationof the SwissWatchIndustryFH 500 0 2003 Source: FederationoftheSwissWatchIndustryFH 2004 +3% Hong Kong 2525 +6% 2005 +31% USA 2050 -4.4% 2006 +29%

2007 +18% China 1537 +18.8

+12% 2008 UK 1290 +7% 2009 +21% Japan 1229 -2.6% 2010 +29% Italy 2011 +29% 1181 0%

+33% 2012 Singapore 1099 +8.5% 2013 +27% Germany 1078 -2.2% 2014 +22% France 2015 +40% 982 -0.4% variation

+13% vs. 2016 % change 2016 UAE 891 -3.5% 0 1% 2% 3% 4% 5% 6% 7% 8%

Share of online retail FIGURES FHH WATCHMAKING TRENDS REPORT 2018 customers.” and mature millennials between activity to balance “We look

INTERVIEW — 6 Jean-Christophe Babin CEO of Bvlgari to customers? itsappealincrease for your brand to gest opportunity What’s thebig- ON FINEWATCHES Lvcea Tubogas. Octo Finissimo and Diva Finissima, by theSerpenti, already epitomised Italian design, with contemporary Horlogerie expertise fusion ofSwiss Haute watchmaking’s unique express Bvlgari That we further ramic andtitanium. materials suchasce- to contemporary high-jewellery status dials that confirm our ful gem-set pieces and spectrum from beauti- lections, whichcover a also evident inourcol- traditional print. It’s spans socialmediaand communication which shows throughout our mature customers. This and more established, between millennials look to balance activity Generally speaking,we efforts on? (and design) your marketing are you focusing customer groups Which expanding ON AUDIENCES

of itsfield. Bvlgari at thetop ground andkeep as well asbreak new strengths andheritage, Bvlgari watchmaking’s that willcarryforward rule-breaking talent We lookfor creative, do you lookfor? and whatqualities new watchmakers How doyou find WATCHMAKERS GENERATION OF ON THEFUTURE

INTERVIEW JEAN-CHRISTOPHE BABIN JEAN-CHRISTOPHE INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 now widely available. straps,and interchangeable optionsare thebrightercolour important. Reflectingthistrend for customisation more become watchmaking, opportunities theboard ofelement across materials, thedefining becomes As classicism,includingin EXTERNAL PARTS

— 7 EXTERNAL PARTS EXTERNAL FHH WATCHMAKING TRENDS REPORT 2018 in thesportwatch category. while titaniumcontinues to make inroads watches, returns inthehigh-endsegment value. Platinum, once reserved for gem-set generations goldcontinues to holdstatus appeals strongly to millennials,whilefor other Luxury andsteel form aproposition that back infashion. become more subdued,traditional metals are are now partofthelandscape. Just asdesigns carbon, alongsidebronze for itsvintage patina, No longeramarkoforiginality, ceramic and have madeperformance theirraison d'être. down amongallbutahandfulofbrands that once theindustry's new grail −hasdied The race to develop high-tech materials − deal The steel EXTERNAL PARTS ceramic andtitanium.” materialssuchas to contemporary ourhigh-jewellerythat confirm status anddials pieces from beautiful gem-set “Our cover collections aspectrum Parallax Tourbillon Grönefeld — 8

Three BridgesSkeleton Neo Tourbillon with Girard-Perregaux JEAN-CHRISTOPHE BABIN, CEO BVLGARI

Marine Torpilleur Military Ulysse Nardin

Vacheron Constantin

Fiftysix Day-Date EXTERNAL PARTS / THE STEEL DEAL STEEL THE / PARTS EXTERNAL FHH WATCHMAKING TRENDS REPORT 2018 Cartier Cartier Santos buttons, at the riskofbreaking afingernail. required aspecialtool orfiddlingwith shortlived, mainlybecauseswapping straps more interchangeable straps. The ideawas came inpackages that includedtwo or In thelate 1990s,fashion watches frequently personal Making it EXTERNAL PARTS Possession Piaget Carré H Hermès

of theretailer.” than thelanguage more of theconsumer will speak thelanguage “I hopewatch brands Formula 1Lady Formula TAG Heuer — 9 are delivered withmore thanone strap. consequence, several ofthisyear’s new models bracelet, addorremove links to fit. Asa straps inafew simplemoves or, for ametal systems that enablethewearer to change a numberofbrands have developed ingenious put anew spinontheirtimepiece. Accordingly, practical andaffordable way for customers to interchangeable straps stand outasthemost As demandfor customisation optionsgrows,

KRISTIAN HAAGEN EXTERNAL PARTS / MAKING IT PERSONAL IT MAKING / PARTS EXTERNAL EXTERNAL PARTS The reign

of colour EXTERNAL PARTS / THE REIGN OF COLOUR

Colour is all the rage this year, as cases, dials Bovet 1822 Roger Dubuis H. Moser & Cie Van Cleef & Arpels and straps come alive with vibrant shades – Château de Môtiers 40 Excalibur Aventador S Endeavour Tourbillon Lady Arpels Concept Planétarium particularly for women who want a watch with a more assertive, standout aesthetic. Those who were tired of the predictable combination of a white or black dial inside “The newly launched

FHH WATCHMAKING TRENDS REPORT 2018 REPORT TRENDS FHH WATCHMAKING an inevitably gold or steel case are now spoiled for choice. Blue has become almost Les Aérostiers collection standard fare, while green is gaining currency alongside some distinctly funky shades. mirrors our values and

As well as becoming a canvas for colour, illustrates our ability to dials remain a showcase for watchmaking’s companion crafts, the métiers d’art, although tell a story and push the these are more of a rarity this year – even limits of our expertise.” among brands that are renowned for their LOUIS FERLA, CEO VACHERON CONSTANTIN expertise in these decorative arts.

— 10 — FHH WATCHMAKING TRENDS REPORT 2018

INTERVIEW Kristian Haagen the elegant facelift andabrilliant new bracelet design. it could get any better, butCartierpulleditoffwith to betherelaunch oftheCartierSantos . Ididn’t think that took my breath away design-wise, itwould have Richemont group. Butifwe’re talkingaboutawatch less from what is something oftheunderdog inthe in Val produced movement from theRichemont facilities to callitanin-housecalibre, asit’s more agroup- new movement. It’s maybe aslight exaggeration these past years, andin2018 especiallywiththeir I really like thepath &Mercier Baume hasbeentaking at SIHH2018? tookyourWhich timepiece breath away ON WATCH DESIGN Fleurier, butit’s anothergreat move nonethe -

with hisnow “illegal”movie for theSwiss Icon watch. Meylan from H.Moser &Ciehitthenailonhead and A-list ambassadors ifyour product sucks. Edouard merely money talking.Don’t wrap itallupinchampagne say apaidinfluencer isa “fan ofthebrand” whenitis Don’t say you are aManufacture ifyou’re not.Don’t benefit immenselyfrom being way more transparent. industry still hasn’t recovered. Ithink brands would er more thanthelanguageofretailer. The watch I hopebrands willspeakthelanguageofconsum- think they willdothisyear? to bringinnew customers? Whatdoyou Do you thinkbrands aredoingenough ON NEWAUDIENCES — 11

merely moneymerely talking.” of thebrand” whenitis is a“fan influencer “Don’t say apaid the sameendcustomers. charges. Notallbrands are Richard Millenorhave an upturn,you alsoneedto lower your after-sales service their12- to 15-year-old watch. Soifyou want to theFour SeasonsintheMaldives for amonth, or should buyasmartwatch andtake theentire family WHAT?!” Itmakes customers wonder whether they any watch brand, leaving consumers withabig“Say charges are getting crazy highfrom pretty much movement, butinsalesandafter-sales too. Service expect quality at every level. Notjust thewatch and I want everybody to dowell, butfirst and foremost I Well, Imost certainly hopeexports willdobetter soon. of thisupturn andwhy? Also, whatdoyou driver thinkisthebiggest togrow willcontinue industry itsexports? After aroughtwo years, doyou thinkthe ON THEINDUSTRY INTERVIEW KRISTIAN HAAGEN KRISTIAN INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 Watch exports tookasharpdownturn between 2015 and2017. Asthe majority ofbrands experienced a contraction insales,contraction product strategies have veered away from breakout designs infavour of triedandtrue DESIGN models.

— 12 DESIGN FHH WATCHMAKING TRENDS REPORT 2018 the upsurge ininterest inmechanicalwatches The anything-goes aesthetic that accompanied designs that emphasiseelegance orsport-chic. general trend for 2018 isto keep itsimple, with Carrying onfrom theprevious two years, the rules Classic DESIGN A. Lange&Söhne to Walter Lange” 1815 “Homage

Manero Flyback Carl FBucherer references.” andkeyare buyingicons fragile context, clients “In whatisstill a Galet MinuteRepeater Laurent Ferrier School Piece — 13 Luminor Due3Days Automatic 38mm FRANÇOIS-XAVIER OVERSTAKE Panerai

brands are outto conquer. the millennialmindset, thedemographic This shiftinperspective exactly alignswith because itreflects hisorherdeepest affinities. extension ofitswearer’s personality, chosen a markofstatus, thewatch isbecoming an precedence. From asymbol ofbelongingand As for dials,clarity andreadability take to shave millimetres from extra-thin watches. by styles that skimthewrist, asbrands rival shape. This classical revival isalsoevidenced round watches; round beingthedominant around the40to 42mm diameter markfor reduction incasesizes whichhave settled is now athingofthepast –asshown by a DESIGN / CLASSIC RULES CLASSIC / DESIGN FHH WATCHMAKING TRENDS REPORT 2018 than ever.” watches aremoreaffordable of many prestigious brands that “It’s price clear fromtheentry CARSON CHAN icons Affordable DESIGN level segment –aprice point that hasbeenall jewellery models,they form partoftheentry- a chronograph. Compared withhigh-mechand a usefulcomplication suchasadate display or only models,sometimes withtheadditionof spanned several decades,hence most are time- to secure theirmarkets. These icons have these modelscome to thefore asbrands look become references intheirown right, and Certain watches, even entire collections, have J12 Untitled Chanel — 14 Happy Sport Happy Sport Manufacture Chopard a piece ofworld history. anniversary iscelebrated asthoughitwere paid to theseiconic styles –andwhy each production linesbusy, hence theattention to maintain volume salesinorder to keep of themarket. These samebrands alsoneed have every interest inoccupying thisend an important construct, meaningbrands Perceived value for money hasbecome too often overlooked inrecent years. Royal OakOffshore Audemars Piguet Chronograph Selfwinding

Carerra Heuer-02

TAG Heuer DESIGN / AFFORDABLE ICONS AFFORDABLE / DESIGN FHH WATCHMAKING TRENDS REPORT 2018 Tank Cintrée Cartier Cartier over thepast three years. anything vintage hasreached epicproportions Little wonder, then,that thepopularity of to theenduringvalues oftimemeasurement. Watch designreflects theimportance afforded mania Vintage- DESIGN Chronograph Limited 1858 Monopusher Edition 100 Montblanc Polaris Memovox Jaeger-LeCoultre Jaeger-LeCoultre creative designs.” and with contemporary over 260years oftradition “Our combines Maison Tipo CP-2Flyback Pilot Cronometro Zenith — 15 feature from thepast. from thebackcatalogue, oradistinguishing launch ofanew collection inspired by amodel a modernmovement. Afurtheroptionisthe thus retaining itsessence, whileintroducing make subtlechanges to aflagship model, with acomplete designoverhaul, orinstead Brands canchooseto reinterpret olderstyles that itnow takes multipleforms. digital –age. The phenomenonhasgrown such strategy ofreviving agolden–meaningpre- Almost every brand iscaught upinthesame

LOUIS FERLA, CEO VACHERON CONSTANTIN DESIGN / VINTAGE-MANIA / DESIGN FHH WATCHMAKING TRENDS REPORT 2018 channels.” communication allour across experience a unique and create global approach that we take a “It’s important

INTERVIEW — 16 Chabi Nouri CEO of Piaget to customers? itsappealincrease for your brand to gest opportunity What’s thebig- ON FINEWATCHES tations every time. go beyond theirexpec have to make sure we more engaged,andwe Today’s customers are to thered carpet. channels, from events our communication experience across all and create aunique take aglobalapproach It’s important that we - we create. and inthecontent at ourevents, online for ourclients instores, providing experiences marketing, we focus on product lines.Asfor through ourdifferent reach awideaudience to whichwe already true to itsDNA,thanks Piaget willalways stay efforts on? (and design) your marketing are you focusing customer groups Which expanding ON AUDIENCES

ultra-thin calibres. particularly in amounts ofexpertise, concentrates vast La-Côte-aux-Fées in Manufacture Our movement schemes. schools andapprentice also lookto recruit from are theskillsthat we jewellery-making. These petencies inwatch- and skills andtechnical com- provide extraordinary with usfor years and valued. Somehave been watchmakers are highly Our artisansand do you lookfor? and whatqualities new watchmakers How doyou find WATCHMAKERS GENERATION OF ON THEFUTURE

INTERVIEW CHABI NOURI CHABI INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 calendars andmultipletimezones. graphs fortimingshortintervals, indicationsthroughuseful chrono- movements andgive preference to precision andreliability oftheir in mind,brands are attentive tothe form aparallel universe. With this terpoint tosmartwatches, which watch’s- asacoun purpose primary –andspecificallycomplication the Function takes over precedence MOVEMENTS

— 17 MOVEMENTS MOVEMENTS FHH WATCHMAKING TRENDS REPORT 2018 automatic movement intheworld. in 2018 withanew record for thethinnest are toppled onaregular basis–including and adjustment. Asfor thinness, records which doesaway withthe needfor lubrication the popularity ofmaterials suchassilicon, tests andcertifications. Italso explains This explains theplethora ofalternative Suisse desChronomètres (COSC). than thoseimposedby theContrôle Officiel expected to comply withstricter standards Regarding precision, amovement isnow innovate andstand outfrom the competition. and thinness are thetwo ways brands can by simplemovements -whoseprecision climate, theyear’s collections are dominated A consequence ofthecurrent business precise Slim & MOVEMENTS

too.” in sales andafter-sales and themovement, but level. Not just the watch “I expect qualityatevery Royal OakTourbillon Audemars Piguet Extra-Thin — 18 KRISTIAN HAAGEN

Traditionnelle Tourbillon Vacheron Constantin Altiplano Ultimate910P Piaget Octo FinissimoTourbillon Automatic

Bulgari MOVEMENTS / SLIIM & PRECISE & SLIIM / MOVEMENTS FHH WATCHMAKING TRENDS REPORT 2018 Portofino Hand-WoundPortofino Moon PhaseEdition “150 Years” IWC lectual, distinct from financial considerations. whose appealisessentially emotionalandintel- tors inmind.They form aseparate category watches are madewithanaudience ofcollec With regard to functions, grand complication desirable Useful & MOVEMENTS Automatic Unitime Navitimer 8B35 Breitling Tambour EssentialGrey Louis Vuitton

- time.” their expectations every to make surewe beyond go andwemore engaged, have “Today’s customers are Kalpa Chronor Parmigiani — 19 CHABI NOURI,CEO PIAGET this year, itscharmintact. spinning mechanismreturns withavengeance dar whoseelite reputation isunblemished.This as theminute repeater ortheperpetual calen- brushed asideinfavour ofcomplications such erably more mainstream –to thepoint ofbeing turers, thetourbillon regulator becameconsid lon. Once thepreserve ofahandful ofmanufac however, oneexception to therule:tourbil- endars andmultipletimezone displays. Thereis, and moonphases,followed by annualcal- serve apractical purpose, ledby chronographs the emphasishasshifted to complications that Since watchmaking’s return to tangiblevalues, -

- MOVEMENTS / USEFUL & DESIRABLE & USEFUL / MOVEMENTS FHH WATCHMAKING TRENDS REPORT 2018 for artistry andskill. similarly uncompromising intheirdemand of industrial andserialproduction, bothare while theirapproach is far removed from that been compared to cinema’s New Wave. And measure, thishuboftalent has rightfully creativity andtechnical expertise inequal This istruernow thanever. Demonstrating short ofexpectations. and thenew watches they present rarely fall us to products that break withconvention, of akinetic art.Assuch,they have accustomed instruments that keep timebuttheexpression particular concept ofwatches notjust as part ofHaute Horlogerie. They bringtheir and artisanwatchmakers now form anintegral There canbenodenying that independent force A creative MOVEMENTS Linesport Chronographe Linesport issue.” alessprominent becomes is highly desirable, price creativity: whenawatch lieswith “The solution Monopoussoir Rattrapante F.P. Journe — 20

FRANÇOIS-XAVIER OVERSTAKE MoonMachine 2 MB&F Double Balancier Greubel Forsey Pablo MacDonough RM 53-01Tourbillon

Richard Mille MOVEMENTS / A CREATIVE FORCE CREATIVE A / MOVEMENTS FHH WATCHMAKING TRENDS REPORT 2018

INTERVIEW François-Xavier Overstake Bulgari Octo Finissimo. That, andthesuperbsandblasted casesofthe of theclassic three-hander inthehigh-end Contemporain caught my eye. It’s anice redesign of fresh air. At Baselworld, theAkriviaChronomètre reinterpretation oftheneo-retro trend, it’s abreath esting. Ithasakindofsteampunk influence. As a ter. The Montblanc 1858Geosphere isalsointer perfect onthewrist; it’s simplebutstill hascharac version oftheCarré Hby. Ifindthis Hermès watch From apure designpoint ofview, I’d pickthenew away atSIHH2018? tookyourWhich timepiece breath ON WATCH DESIGN segment.

- weakness and,for loyal clients, aloss ofbrand equity. price segment asthisisoften perceived asasignof products. It’s abigmistake to adapttheoffer to alower I would stay at my usualprice point by offering bold segment, Iwouldn’t focus onnew clients at thisstage. again. IfIwere astandalone company withahighprice to theseclients andmake themwant to wear awatch adapt communication anddistribution to clearlyspeak creative, daringpieces at reasonable prices, andIwould a large group, Iwould focus my entry-level brand onvery desirable, price becomes aless prominent issue. IfIwere The solutionlieswithcreativity: whenawatch ishighly becomes perceptible whenyou handlethewatches. consequence ofcost controlling, whichI’m afraid to say I currently seeisthat thefair prices are very often the ativity, fun,personalisation andfair prices. The problem on offer andwhat thesenew clients want, whichiscre- communication Ifeel there isstill agapbetween what’s to renew theircustomer base, yet despite efforts in That’s acomplex question. Brands know that they need think they willdothisyear? to bringinnew customers? Whatdoyou Do you thinkbrands aredoingenough ON NEWAUDIENCES — 21

of weakness.” often perceived asasign segmentasthisisprice theoffer toaloweradapt “It’s a bigmistake to horological substance oftheirwatches at stable prices. I’d say brands needto bethinkingaboutimproving the creativity isthekey. Since it’s impossible to lower prices, improvement inyour market share andturnover. Again, cautious, inwhichcaseyou can’t expect asignificant One ofthecurrent problems isthat somebrands are too you need to generate desirability withaboldattitude. if you don’t have that type ofwatch inyour catalogue, We’re insomething ofa“winnertakes all”situation. So at what’s goingonwiththeNautilusandDaytona. and more driven by themost famous watches. Look key references. The market issteadily becoming more ile, withtheresult that clients are buyingmore icons and rebuild dealers’ stocks. The overall context remains frag- may begrowing, butthisismainlydriven by theneedto I don’t thinkwe canspeakofanupturnjust yet. Exports of thisupturn andwhy? Also, whatdoyou driver thinkisthebiggest togrow willcontinue industry itsexports? After aroughtwo years, doyou thinkthe ON THEINDUSTRY INTERVIEW FRANÇOIS-XAVIER OVERSTAKE FRANÇOIS-XAVIER INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 Customer tomorrow’s watch industry. as well asoneof themajorchallengesfacing time-consuming andcostly investment – competent after-sales service support isa become swamped. However, setting up all-important departments could quickly this total eachyear, it’s easy to seehow these some sixmillionnew watches are addedto of total watches incirculation. Knowing that returned for servicingisequivalent to 10% Statistically speaking,thenumberofwatches Service FORECAST 1

— 22 FORECAST 1 / CUSTOMER SERVICE CUSTOMER / 1 FORECAST FHH WATCHMAKING TRENDS REPORT 2018 customer service departments. which could putunmanageablepressure on It’s anincrease by design, notby chance, but has grown by anaverage ofsixmillionayear. number ofmechanicalwatches incirculation for servicing.Also, over thepast decadethe worldwide are sent backto themanufacturer that inany oneyear, 10%ofthewatches worn tored infrom thedesignstage. Statistics show for regular servicingmust therefore befac rally losetheirproperties over time. The need elements suchaslubricants andgaskets natu- shocks that canaffect themechanism, certain become worn anddeteriorate. Asidefrom the A watch isacomplex object whoseparts pressure Under CUSTOMER SERVICE - of new product sales. become brands’ biggest profit centre, ahead that, inthelongterm, customer service could cial andstrategic asset. Someexperts believe ing to consider customer service asacommer face ofdiscontent, thewatch industry isstart context ofslower growth andthevery public high prices. Butthesituation isevolving. Ina obtaining acost estimate, longwait timesand to lackofinformation onwarranties, difficulty range from problems locating customer service media to vent theirdissatisfaction. Grievances complaints onlineascustomers take to social portance, notto mention theeaseofvoicing brands’ agenda;acurious fact given itsim- After-sales service often remains low on factor A strategic — 23 - - watchmakers inAsiaalone. countries. The shortfall isestimated at 6,000 of after-sales service watchmakers inseveral wide. Despite this,brands report ashortage works withadozen partner-schools world- gram (WOSTEP) was set upto thiseffect and of third challengeistraining. The Watchmakers logs. This requires amajorlogistics effort. The across thedifferent markets, to prevent back office butis now more likely tobespread Customer service usedto belocated at head planning, managingandshippingspare parts. as production. The second difficulty involves to handletwice asmuchservice andrepair watches ayear, itmust therefore beequipped Assuming thesamebrand makes 100,000 to dealwith200,000 service requests ayear. that hastwo millionwatches incirculation has cle isthenumberofproduct returns. Abrand to set upandcomplex to run.The first obsta- A customer service department isexpensive shortage Staff Switzerland Training andEducational Pro-

- FORECAST 1 / CUSTOMER SERVICE CUSTOMER / 1 FORECAST FHH WATCHMAKING TRENDS REPORT 2018 into ourteams.” study courses vocational fromgraduates we new enrol year“Each

INTERVIEW 24 — — 24 Louis Ferla CEO of Vacheron Constantin to customers? itsappealincrease for your brand to gest opportunity What’s thebig- ON FINEWATCHES of ourexpertise. and pushthelimits ability to tell astory and illustrates our It mirrors ourvalues Vacheron Constantin. of Haute Horlogerieat is aperfect example tion, andinthisrespect d’art andacomplica- employs themétiers Aérostiers” collection newly launched“Les creative designs.The with contemporary and 260 years oftradition Maison combines over standpoint. Indeed,our nical andanartistic tion, bothfrom atech- ing andflawless execu - on creativity, storytell- tions through itsfocus appeals to theemo- Vacheron Constantin Watchmaking. aficionados ofFine universal values for statement. These are elegance andunder technical excellence, who are lookingfor for connoisseurs Constantin isaMaison its DNA,Vacheron In keeping with efforts on? (and design) your marketing are you focusing customer groups Which expanding ON AUDIENCES

- unique craftsmanship. and safeguarding ofour value thetransmission Beyond training, we ness andmethodicalness. centration, meticulous ability, visualacuity, con- qualities suchasmanual professional andpersonal we evaluate anumberof Throughout theirtraining, our different collections. master watchmakers on tunity to train withour give themtheoppor Vacheron Constantin, and to integrate theminto This isthebest way courses into ourteams. from vocational study we enrol new graduates generations. Eachyear knowledge on to younger its efforts to pass its Constantin must continue and expertise, Vacheron high standard ofquality to meet theMaison’s apprenticeships. Inorder ticularly inthecreation of for years, andmore par training ofwatchmakers has beeninvolved inthe Vacheron Constantin do you lookfor? and whatqualities new watchmakers How doyou find WATCHMAKERS GENERATION OF ON THEFUTURE -

INTERVIEW LOUIS FERLA LOUIS INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 Today’s second-hand watch market isworth an estimated US$5 billioninrevenue andincreases in value by 5%ayear. Itowes itssuccess to the internet, butalsonew consumption Second- habits. Once leftto specialised online platforms andthird-party dealers, agrowing numberof Hand brands are signallingan interest inregaining control over this market. FORECAST 2

— 25 FORECAST 2 / SECOND-HAND / 2 FORECAST FHH WATCHMAKING TRENDS REPORT 2018 10 to 20timesmore thanthemarket for new. hand watch market could ultimately beworth Henry Bennahmiasdeclared that thesecond- SIHH 2018, Audemars Piguet CEO François- watches. Inaninterview to Reuters during and possibly even exceed themarket for new of pre-owned watches are forecast to equal by theinternet, withinthenext 5years sales Boosted by increased professionalism and and continues to grow by around 5%ayear. has outperformed themarket for new watches, consultancy Kepler Cheuvreux. Since 2013 it to beworth US$5 billionayear by financial including thosesoldat auction –isestimated global market for second-hand watches – Virtually non-existent intheearly1990s, the market An expanding SECOND-HAND

and insomecases very recent, items. catalogues feature ahighnumber ofrecent, were vintage orrare watches whereas today’s or seven years ago, thevast majority oflots seen atransformation oftheirown: until six larising watch-themed auctions, whichhave meanwhile, have beeninstrumental inpopu into aplayground for millennials.Collectors, over ownership have turnedtheseplatforms consumption habitsthat favour experience luxury goodsisnolongertaboo–and new Changing mentalities –buyingpre-owned access to prestige timepieces. com, andgiven anew, less wealthy clientele giants suchasChrono24.com orTheRealReal. net. This now globalbusiness hasproduced grown exponentially onthebackofinter limited to ahandfulofspecialist dealers, has pieces. What started outasanichemarket, from collectors andenthusiasts seekingrare quartz revival, initiallyinresponse to demand alongside mechanicalwatchmaking’s post- The pre-owned watch business developed playground A millennial’s 26 — — 26 - time maintain prices. their pre-owned watches andat thesame is oneway brands cancontrol thequality of interest. First-hand involvement inthismarket haveH. Moser&CieandMB&F also expressed in theUnited States. Smallbrands suchas Richard Millehassaiditwilltest thewaters second-hand watch market asofthisyear. announced itsintention to embrace the think again.At SIHH2018, Audemars Piguet sales ofnew watches hasprompted themto pre-owned watches coupled withdeclining the initiative instead. However, risingsalesof second-hand market, letting new players take Traditionally, brands have passed uponthe for brands opportunity A new

FORECAST 2 / SECOND-HAND / 2 FORECAST FHH WATCHMAKING TRENDS REPORT 2018

INTERVIEW Carson Chan Ressence E-Crown, andtheIWC Pallweber. more thanone, theA.Lange&SöhneTriple Split,the & SöhneHomageto Walter Lange If Icanonlychooseone, thenithasto bethe A.Lange at SIHH2018? tookyourWhich timepiece breath away ON WATCH DESIGN . AndifIcanchoose

same €10,000 might only have gotyou onewatch. €10,000 whereas just five orseven years ago, that ever. These days you canstart anentire collection with prestigious brands. Watches are more affordable than The most obvious signistheentry point ofmany were more geared toward anelite group ofcustomers. to extend theiraudience, whereas adecadeagobrands the challenges theindustry is facing. They’re all working done, althoughinallfairness most brands are aware of It’s aphilosophicalquestion; ofcourse more canbe Are brands doingenoughto bringinnew customers? they willdothisyear? bring innew customers? Whatdoyou think Do you thinkbrands aredoingenoughto ON NEWAUDIENCES 27 — — 27

with €10,000.” start collection an entire daysThese you can than ever.affordable “Watches more are Knowledge isthekey to theindustry’s future. associates butalsoknowledge amongst collectors. to grow, by whichIdon’t just meanthefrontline sales chanical watch isabsolutely essential for theindustry understanding ofthefundamental intricacy oftheme- toward thesamerealm ascollecting art.Agoodsolid believe that mechanicalwatch collecting isheading craftsmanship that are relevant to theirtastes. Itruly intermediate level by introducing complications and they are alsotakingcare ofcustomers at themore to attract more new customers at entry level. Ofcourse larging theiraudience andlowering prices inaneffort My answer to thefirst question is: yes. Brands are en- of thisupturn andwhy? Also, whatdoyou driver thinkisthebiggest togrow willcontinue industry itsexports? After aroughtwo years, doyou thinkthe ON THEINDUSTRY

INTERVIEW CARSON CHAN CARSON INTERVIEW FHH WATCHMAKING TRENDS REPORT 2018 E-commerce reputation online? importance ofmanagingtheirimage and avoid thepitfalls oftheweb, notleast the timid) inroads into e-commerce. Will they watchmakers are continuing to make (still brands andonlineplatforms show that sales willbemadeonline. Closertiesbetween forecasts that by 2025 aquarter ofluxury exception. ConsultancyBain & firm Company country andevery sector, andluxury isno Digital isafast-growing channelinevery FORECAST 3

— 28 FORECAST 3 / E-COMMERCE / 3 FORECAST FHH WATCHMAKING TRENDS REPORT 2018 E-COMMERCE of themarket by 2025. for personal luxury goodswill account for 25% estimatesBain that onlinesales fastest-growing category, ahead ofapparel. strong inEurope andAsia.Accessories are the this figure, althoughgrowth was particularly year. The United States madeupalmost half billion in2017, climbing24% ontheprevious of personal luxury goodsreached US$28 According to &Company, Bain onlinesales The luxury sector mirrors thistrend. follows suit Luxury is expected to doubleby 2020. of total retail spendingworldwide, afigure that trillion in2016, up24% on2015. This is8.7% worldwide B2Ce-commerce saleshitUS$1.915 market retail company eMarketer reports that sector inthepast few years. New York-based Online retailing hasexploded across every growth Exponential — 29

it alone(less effective). (detrimental to image) orinsisting ongoing i.e. beingassociated withclose-out sites be to avoid thepitfalls ofanonlinepresence, and-mortar stores. Afurtherchallengewill virtual andphysical, e-commerce andbrick- step willbeto findtheright balance between the most important saleschannel.The next watch executives consider e-boutiquesto be A 2017 study by Deloitte revealed that 67% of The way ahead China or Britishe-tailerMrPorter. e-commerce portalssuchasJD.commajor in now beingreplaced by partnerships with Pop-ups warning against online sellers are forcing watch brands to adapttheirbehaviour. – luxury’s maingrowth engine–is,however, 2% ofrevenue. The riseofthedigitalnative lagging: onlinesalescurrently represent atiny Despite progress made, thewatch sector isstill behind thetimes Watchmakers FORECAST 3 / E-COMMERCE / 3 FORECAST FHH WATCHMAKING TRENDS REPORT 2018 construction requires immensemental agility. The emotionalspark,however, the ultimate level inevitably draws himto complex pieces whosemechanical nor thewatchmaker’s seasonedeye. Hisquest to take FineWatchmaking to comes from theassembly, adjusting, finishing anddecoration ofeachpart as alivinglegend.Inhismind,nothingcanreplace thecraftsman’s hand Philippe Dufour isabrilliant independent watchmaker, revered inJapan that transform atimepiece into awork ofgreatness. insight intoSIHH Philippe Dufour’s SEE THEVIDEO BEST PICKS

— 30 BEST PICKS / PHILIPPE DUFOUR PHILIPPE / PICKS BEST FHH WATCHMAKING TRENDS REPORT 2018 or aningeniousmechanism. Nordoeshereserve hisenthusiasm for watchmaking’s to theicons ofthe past, beauty isaform ofintelligence that knows noboundaries. From vintage inspiration to contemporary designs,from horological electronics highest echelons;there are innumerable opportunitiesto stop andadmire. Opportunities aboundto marvel at theshapeofacase, artfulgem-setting For designerEricGiroud, eachnew crop ofwatches bringsrichpickings. Eric Giroud’s many reasons to becheerfulatSIHH SEE THEVIDEO BEST PICKS

— 31 BEST PICKS / ERIC GIROUD ERIC / PICKS BEST FHH WATCHMAKING TRENDS REPORT 2018 Piguet’s Royal OakOffshore –EmmanuelGueitbrowsed thebooths Baselworldat shape linesandcurves into emotions;products that infuse metal withsoulwhile in search ofacreative touch. Hiswanderings ledhimto brands whoseproducts As adesignerhimself–includingicons suchastheRolex Cellini andAudemars Designer EmmanuelGueitgives delivering flawless technique. Because for himthere canbenodoubt: his take onBaselworld design ispartofourfuture. SEE THEVIDEO BEST PICKS

32 — — 32 BEST PICKS / EMMANUEL GUEIT EMMANUEL / PICKS BEST FHH WATCHMAKING TRENDS REPORT 2018 Baselworld reveals itstechnicaltips shows aparticular affinity withthebackstage of the profession: that peculiar place to Gianfranco Ritschel, consultant to Gianfranco Ritschel, He takes usbehindthecurtain at Baselworld to learnmore about thehorological where watchmakers conjure upmechanisms fulloffinds,tricks andinnovations. As acomplete watchmaker, Gianfranco Ritschel,now aconsultant andtrainer, complications that never cease to amaze. SEE THEVIDEO BEST PICKS

— 33 BEST PICKS / GIANFRANCO RITSCHEL GIANFRANCO / PICKS BEST FHH WATCHMAKING TRENDS REPORT 2018 as thebaby gives boomgeneration way to with thebuyingpublic.Particularlycontact aware acutely companies oftheneedtomake watchThis chainofinformationhasmade must -bedoneonline. training orraising funds, everything can-even or distribution, whether it’s knowledge-sharing, quickly! Whether it’s marketing communication, changes...to these given too time.Buttimegoes borders. Watchmakers believed they adapt could 24/7 tosatisfy thaterases acultureofimmediacy On theother thereistheInternet, operating for productdevelopment, andvalue tradition. that thinkinlongcycles,companies particularly where thetwo meet. Ontheonehandarewatch their business. Nor isthereany clear logic asto forcing brands how toreconsider they about go newDigital hasproduced thatare paradigms The watch isinthethroesofchange. industry CONCLUSION — 34 innovation. Values thatwithstand thetest of year, areaculmination ofexpertise, creativity and hearts andmindswithproductsthat, year after Fine Watchmaking toappeal toour continues transformations, oneelement remainsunchanged: motivations.and purchase Andyet amidst these watch productionandtheeconomy, timepieces As thisreportshows, we dissociate cannolonger productresponsiveness.unprecedented and itsmarkets thanever before.And showing isprobablyindustry more attuned toitscustomers two isthatthe ofthese factors The consequence ifthey uncertainty economic aretostay thecourse. show themselves quickly capableofadapting to notcertainly invulnerable. Watch must companies isimmunetocrises.luxury Resilient,yes, but Also, clingtothebeliefthat brands cannolonger inthesame orconsume waythings astheirelders. millennials, whodon’t necessarily want thesame

time. CONCLUSION FHH WATCHMAKING TRENDS REPORT 2018 IMPRESSUM Van Cleef&Arpels, Zenith Speake-Marin, Tag Heuer, Ulysse Nardin, Urwerk, Vacheron Constantin, Fleurier, Piaget, Ressence, Richard Mille, Roger Dubuis,Romain Gauthier, RJ, Laurent Ferrier, Louis Vuitton, MB&F, Montblanc, Officine Panerai, Parmigiani Hautlence, Hermès,H.Moser&Cie, HYT, IWC, Jaeger-LeCoultre, Kari Voutilainen, De Bethune, DeWitt, F.P. Journe, Girard-Perregaux, Greubel Forsey, Grönefeld, Chanel, Chopard, Christophe Claret, Chronométrie Ferdinand Berthoud, A. Lange&Söhne, Audemars Piguet, ArminStrom, Bovet, Bulgari,Cartier, THE 42 PARTNER BRANDS creators, they actively toitsactivities. contribute brands. namesinthewatch Leading andindependent industry andexperiences,connections theFHHissupportedby 42partner publicandprofessionals.general competencies, Acreator ofcontent, events large-scale intendedforbothIt organises andencounters the professions. Ittrains, horological andcertifies knowledge. assesses on thelatest news, andskillswithinthewatchmaking history of Fine Watchmaking aroundtheworld. Itprovides information the objective oftheFHHistopromote thereputation andspread Audemars Piguet, Girard-Perregaux andtheRichemontGroup, A not-for-profitset foundation upunderprivate law in2005 by Horlogerie Fondation delaHaute 35 — — 35 FHH Academy FHH Forum FHH Trends FHH Journal SIHH FHH Photography: Getty images,Istock Graphic DesignandProduction: CANA atelier graphique Translation: Sandra Petch Christophe Roulet, EmmanuelSchneider Editorial Staff: Alex Ballmer, Fabrice Eschmann,William McNish(ReUp), Managing Editor: Fabio Teta written permission from Fondation delaHaute Horlogerie. electronic, recording, information retrieval system, orotherwise, withoutprior No partofthispublication may bereproduced inany form orby any means, All rights reserved for allcountries. © Fondation delaHaute Horlogerie, 2018 T. +41 22705 8300, [email protected] Rue André-De-Garrini 4, 1217Meyrin (GE), Switzerland FHH WATCHMAKING TRENDS REPORT 2018 ______

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