It’s no secret that the Swiss watch industry, and for that matter, the watch industry worldwide, is in the middle of a slow but irreversible climate change. The advent of the smartwatch and the presence of a new generation of consumers who value experiences over objects are both factors. As well, the probably permanent alteration in the Chinese market, where both mandated austerity and market saturation have produced a noticeable drop in consumption, is a factor that will continue to make its influence felt in the international business climate for luxury goods in general, and for fine watchmaking in particular.
One of the brighter spots in terms of growth has been the performance of LVMH’s watch division, which includes Hublot, TAG Heuer, and Zenith. The division, according to the Wall Street Journal has had “record highs” in the past three years. In a very in-depth interview, LVMH watch boss Jean-Claude Biver discusses why he remains concerned about long term prospects for the luxury watch industry, the challenges he faces in understanding what appeals to millennial consumer, and some of his own challenges in developing strategies to bring new, younger consumers into fine watchmaking.
“Mr. Biver credits a strategy that relentlessly targets younger consumers, even at the expense of traditions that have long endeared Swiss watches to older generations. Over the past few years, LVMH’s brands have enlisted Jay-Z and various street artists to design watches, signed models in their early 20s as “brand ambassadors,” bought ads in the virtual world of videogames and developed the Swiss industry’s first smartwatch. He compares the approach to the Roman Catholic Church’s 1960s-era reforms that allowed Mass to be celebrated in vernacular languages, not just Latin, ushering the church into the modern era.
‘If you talk Latin to people who don’t understand, don’t be surprised that one day they won’t come anymore,’ Mr. Biver says.”