Luxury Watch Houses Rally Around Watches and Wonders

Watches and Wonders, which kicks off its Geneva event today, has emerged from a tumultuous period as the watchmaking industry’s dominant, global showcase — with a hefty turnout of leading watch labels and high hopes pinned on the event.

“This is the unexpected outcome of a pandemic,” said Emmanuel Perrin, president of the Fondation de la Haute Horlogerie, organizer of the show, in an interview with WWD via Zoom.

Before the coronavirus put everything on hold, people were wondering if physical trade shows were worth it. The rise of digital channels, offering direct links to end consumers at a time when brands are rethinking distribution channels, had cast uncertainty as to their relevance. So, too, did the time and cost of setting up trade fair booths — a key issue at the Baselworld fair, where elaborate set-ups in the sprawling exhibit hall rose rise stories high.

Exhibitors from that fair began to drop out, with some labels opting for the more exclusive atmosphere of Watches and Wonders, then known as SIHH, while others broke off — from both fairs — preferring to use the money to hold their own, intimate events with clients or invest in bulking up digital channels.

“Yet another SIHH — at the time, Watches and Wonders now — do we really need it? Do physical salons make sense?” Perrin recalled hearing.

“You always forget what you have as long as you have it and it’s been going on for so long,” he observed.

“OK, well 12 months of pandemic later you realize how important and how key it is for the industry to rally around a show, as the voice of the economic sector, of the innovation, of the invention, of the novelties, of keeping our business — when I say business, our economic sector — alive and ticking and relevant as well to the world,” said the executive.

He drew a parallel with the urge that many are feeling to return to the office.

“People are begging to be able to come back to work and commute an hour in traffic jams to get back to work, to get some kind of a professional social life back — and I think a similar thing is happening with the show,” he suggested.

Watches and Wonders has been dominated by labels belonging to Compagnie Financière Richemont, including Cartier, Jaeger-LeCoultre and Vacheron Constantin. This year it is being joined by a roster of sector heavyweights, most of whom had held the Baselworld fair together in its final year. These are Rolex, Chanel, Patek Philippe, Chopard and Tudor, along with labels belonging to LVMH Moët Hennessy Louis Vuitton: Bulgari, Tag Heuer, Hublot and Zenith, and, for the first time, Louis Vuitton.

The show comes at a challenging time for the sector. Swiss watch exports were down 21.8 percent last year to 17 billion Swiss francs, or $18.16 billion, hit especially hard by the drop-off in global travel, and marking a similar decline as that of the 2009 financial crisis, according to statistics of the Federation of the Swiss Watch Industry.

“The fact that we are all together makes this fair very important and very visible, so that’s why it’s very important to continue to be a part of it,” said Arnaud Carrez, marketing and communications director of Cartier International.

“The watch ecosystem is very diverse, very rich and brands like Cartier contribute a lot to it, and I think that’s tangible proof of our commitment to preserve, develop this ecosystem,” added Carrez.

The Geneva leg of the show, which takes place through a digital platform, runs from Wednesday to April 13, with 38 exhibiting labels, followed by a physical event in Shanghai that will run April 14 to 18, with 18 brands.

“I see it as the first real global digital platform ever made for watches,” said Edouard Meylan, chief executive officer of independent label H. Moser.

“We want to be part of these kind of things — it’s innovation and I think in the future we will learn a lot from this,” he added.

Last year was rather chaotic, the executive observed, with labels heading off on their own directions.

“In this industry, it’s an ecosystem and we need each other,” asserted Meylan.

For labels that are less dominant in the industry, and seeking to deepen their legitimacy in the realm, the event offers access to industry experts and specialist journalists covering the sector.

“An event in Geneva allows for a multiplication of contacts with the press, and over a week, also allows time to really focus on the watchmaking realm, so I think it continues to be useful — obviously this year is a bit unusual because people can’t travel, but we remain attached to this type of event,” said Hermès executive vice president Guillaume de Seynes.

“We’re all competing, like in any other industry, but for one time of the year, let’s get together and show what it’s all about — I think it’s super important to think about the common good of the industry versus each of our interests,” said Julien Tornare, CEO of Zenith, noting the challenges facing the industry, like the rise of connected watches and the importance of capturing the interest of younger generations — famously known to favor experience over acquiring stuff.

“I always believed that the future is a mix of a major platform where you can come and see everyone at once if you need to and then of course, each one of us will organize different events, different shows, different announcements of the year,” he added.

The pandemic prompted huge progress in showing products through digital means — high-end houses were quick to outfit studios in their offices for more effective on-screen presentations — but, still, the industry is impatient to return to in-person gatherings. Watch labels heading to Shanghai are grabbing the chance to hold a physical gathering — in a key market that has swelled in importance. Exports of Swiss watches to Mainland China grew over 50 percent in the second half of last year, propelling the market to the leading position of markets, with a 14 percent share, according to the Swiss watch federation.

“Watches and Wonders has quite a full offer when it comes to the digital side, with a good number of participants — and this is followed by the physical element in one of the most promising markets. This makes for a very strong edition — I think it’s going to be very interesting in China,” said Patrick Pruniaux, CEO of Ulysse Nardin.

The Shanghai event, which was first held last September at the West Bund Art Center, has added around 10 labels for the April edition and offers the industry the chance to increase the sector’s visibility, noted Perrin, stressing the importance of in-person exchanges.

“I don’t think we can go on with only a digital platform that is not anchored by a physical event,” he said.

“Of course the anchor of that physical event is Geneva — it’s the mother ship of Watches and Wonders, no question about it — and we can’t wait for 2022 for that to happen,” he added.

Platforms like Mr. Porter, Net-a-porter and the Luxury Pavilion on Alibaba’s Tmall will relay information from the show, adding to its impact, noted Perrin.

“Today, when you see our ability to resonate across the world — the reach should be this year more than 100 million people with the online component — you start to think ‘yeah, what were we thinking to start to say we don’t need this any more?’” Perrin said.

Last year’s all-digital Geneva show was pulled together in a very short period — just a few weeks — but this time, organizers had more time to shore up the online platform, having decided by November last year that the April event would take place through digital channels. There is a higher level of personalization and interactivity on the platform this year, in addition to much more content, including panels, CEO interviews and keynote speeches.

The idea was to reinforce the quality of the show, even as it absorbed a larger number of participants.

The pandemic situation has reinforced the need for interaction with consumers — through all channels, observed Perrin.

The executive, who previously headed Cartier’s operations in North America, recalled around a decade ago the increasingly widespread viewpoint that stores had no future.

“All you could read in the press is ‘brick and mortar is dead,’” he noted. Now, in a pandemic, with months of store closures, the debate has shifted.

“Not only is it not dead, but it’s also an asset — in this new digital ecosystem, you still want interaction, sometimes remotely, sometimes face-to-face, you still want to try on pieces, to compare pieces, to physically touch them, to physically try them on,” he said.

“Yes, you can decide to do it at home, to do it in a store, that’s what we need to keep proposing to our clients — it’s not only mono-channel anymore, it’s through an ecosystem,” noted the executive.

A universe of possible choices is open to clients, he added, listing options like online chats or Zoom meetings before collecting a product in a store, for convenience, allowing for an exchange with a trusted sales associate.

“Or to have a simple discussion between two people passionate about fine watchmaking,” he added.

Reflecting on the mechanical watchmaking industry’s longevity, despite challenges over the years — the quartz crisis in the ’70s was particularly acute while, more recently, the Apple Watch has proved to be a formidable competitor to the sector — the executive pointed to creativity and innovation, recently recognized by UNESCO.

UNESCO in December added the craft of mechanical watchmaking and art mechanics to its list of intangible cultural heritage of humanity, noting the tradition has been passed on through the generations in Switzerland and France.

“I think a reason why it has been going for so long, and is still strongly alive and kicking — despite, yes, the quartz movement will be more precise than a mechanical [one] — its creativity, its capacity to invent, innovate, the variety of its know-how and savoir-faire, an exercise that is really imposed in a very small space,” he said, lifting his arm to point to his wrist.

“A perpetual calendar will jump from the 28th to the 29th of February once every four years and it’s all done and mastered by a set of mechanical wheels that are powered by a spring—how do you do that?” he said.

“It’s why, as well, we switched the name to ‘Watches and Wonders’ — it’s these kinds of wonders that generate the story, the explanation, the inventiveness of what goes into a watch,” he said. The digital age, with video, three dimensional images and virtual reality offer a chance for people around the world to learn about the art of mechanical watchmaking, brushing away some of the secrecy around watchmaking, he suggested.

“I think we have to tell the story, and we have many, many stories to tell. I think it’s a much more innovative and inventive industry than actually we have let the world know,” said Perrin.