Luxury Watch vs Smartwatch - What does Audience Insight tell us in 2020?

- Audience Data from non-traditional markets suggests that Smartwatches could well be a gateway to Luxury Watch purchases, rather than a replacement for them

- Younger audiences in the West especially see barriers to learning about the world of Luxury watches via their preferred channels, which are the areas where Smartwatch brands like Apple demonstrate success

- The online spaces and communities which can help new consumer audiences learn more about Luxury Watches are key to success going forward and we recommend that brands invest here

Last week saw the return of a common media trope - that the Smartwatch is a direct competitor to Luxury Watch brands and is therefore the cause of challenges faced by the watch industry, this time loosely substantiated by reports that the Apple Watch outsold the entire Swiss watch industry in 2019. Whilst Apple’s rise to dominance of the smartwatch sector is impressive, this media narrative is an oversimplification of the real challenges.

In 2016 EntSight published a Luxury Watch & Jewellery report which studied the rising trend in Smartwatch ownership and stated that ‘whilst they are likely to be a long term success, Smartwatches are unlikely to be a replacement for the treasured and lifetime purchase of a Luxury Watch’ - a point we feel is still true today.

Here in 2020 we’ve access to more audience data on Luxury Watch and Smartwatch consumers than we did in 2016 and we believe that this a good time to review the state of play at the start of a new decade.

West to East

To understand the how Smartwatches might have potentially impacted sales we first looked at existing owners using data sourced from GlobalWebIndex - and specifically whether these global audience groups still planned to purchase a Luxury Watch.

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Audience data shown in the graph above from 2019 suggests that in all markets but North America Smartwatch owners over index when it comes to wanting to purchase Luxury Watches - and do so significantly in Asia Pacific, Latin America and MENA. This strong over index in non-traditional markets suggests that Smartwatches are potentially a gateway to Luxury Watches rather than being a replacement for them - something the watch industry should consider turning into an advantage.

Europe and North America are starting to look more problematic here but our view is that modern digital audiences are not well served by watch brands - especially as far as younger audiences are concerned.

Bridging The Information Gap

Whilst the focus on exclusivity in the world of luxury watches lends it a clear sense of value this also means that for newcomers it can be hard to access and understand, a factor which we believe has adversely impacted interest from younger audiences in Europe and North America in recent years.

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Analysis of the online sources which prospective European Luxury Watch buyers use to research shows that for those under 45 sources of information are the online spaces where Luxury Watch brands are still not actively informing and inspiring.

These include Messaging Services (such as WeChat, WhatsApp and Facebook Messenger - as well as onsite chatbots) as well as Video Sites and Video Blogs - the very spaces where the consumer technology brands who have kickstarted the Smartwatch revolution are very strong. Apple, for example provides very fast and responsive online chat support in addition to active in-store support.

One ray of light here is that websites such as The Watch Pages are successfully bridging this information gap by providing users the ability to quickly and effectively explore their extensive database of watches as well as the means to ask experts questions about prospective purchases.

In summary - whilst audience data doesn’t support the view that the Apple Watch is directly impacting Luxury Watch purchases globally, we do believe that brands can increase revenues by offering guidance via the digital channels where their vital future audiences are spending their time.

If you're interested in learning more about the Audience Intelligence solutions we offer here at EntSight then take a look at our website to find out more or drop us a message.

Edward Bass

Edward Bass

EntSight Founder & Director