Robert, your column about the Hublot smartwatch got my mind spinning. Thought I’d shoot out a blog post based on where my mind was wandering after reading it. Since this general territory was just covered, I’m coming at the topic from a different angle . . .
One of my favorite words is “Luddite.” It describes a person who is opposed to, or afraid of, new technologies or ways of doing things. The reason I like the term: it describes a historical phenomenon that duplicates itself endlessly.
The Luddites were real people. Back in the 1800s, textile machinery emerged as a way to quickly, inexpensively produce fabrics. As with any technology that makes things faster or cheaper, it benefited consumers but displaced workers who were skilled in doing the labor that technology made less valuable. So the Luddites scorched the earth. They went about destroying textile machines as a form of protest.
But the march of progress cannot be stopped. Most people will embrace technologies that give them what they want faster and cheaper. History tells us high-end workmanship is often sacrificed on the altar of convenience, but that is a tradeoff most consumers happily make.
Most technologies succumb to their own obsolescence eventually. The compact disc was made obsolete by music streaming services, and VCRs were made obsolete by Netflix. The floppy disk was made obsolete by the solid-state hard drive, which is now being made obsolete by cloud computing. Mobile phones made many, many things obsolete: digital cameras, GPS devices, pay phones and many more.
If you’re wondering if the analog watch will ever become obsolete, as a technology, it already has. It was made obsolete decades ago. We all know this. Despite constant use of words like “innovation” and “technology” to describe a new slightly lighter metal alloy, or a way to make a tourbillon one percent more accurate, this is all just pushing string.
Expensive watches are first and foremost luxury items. They are worth what they are worth not because they tell time, but because they tell you something else, specifically about the wearer. Or they tell the wearer something he wants to believe about himself (it is almost always a “him”).
Luxury watches are gorgeous little baubles, intricate machines whose production labor far exceeds what is required. And that is exactly the point. Immaculate hand-finishing would be far less desirable if it merely improved product performance.
Analog watches have long had this ace up their sleeve. They possess cultural capital. To be a watch aficionado says something about you just as being a whiskey aficionado, or wine aficionado, or ink pen aficionado says something about you.
This is not to reduce all of high horology to its status signaling effects, of course. But it is to suggest that a large percentage of the market would not even consider spending $15,000 on a wristwatch were it not for the prestige it confers upon the owner. This is precisely why Rolex outsells Grand Seiko.
Smart watches are threatening to put luxury watches into an ever-shrinking corner not because they are better at keeping time (though they are). They threaten luxury watches because they convey positive things about the wearer that a $500 analog watch cannot. In other words, they democratize access to the social capital that many (though not all) luxury watch consumers are truly paying for.
I do not believe the luxury watch market will go away. I believe it will endure. But I believe it will go the way of the hand-tailored suit, or the custom-made shoe.
Those who truly appreciate the product based on its intrinsic merits and value will continue to do so. Those who wanted the product more for its social value, and feel they can capture that social value more inexpensively elsewhere, will migrate their dollars accordingly.
Over time, the luxury watch market will still produce beautiful, intricate, expensive watches. They will just do so to a much smaller cohort of far more engaged consumers. Progress marches on.
“Despite constant use of words like “innovation” and “technology” to describe a new slightly lighter metal alloy,…”
Ceratanium indeed, closely followed by Armor Gold, (in these cases both slightly harder), the newly coined words just keep a-coming. How many types of gold exist now in Watchland?
One question I keep coming back to… how many luxury brands can be sustained by “those who truly appreciate the product based on its intrinsic merits and value”? It seems to me that enthusiasts alone won’t be able to keep the lights on at many luxury watchmakers.
Casio sells many watch models at many price points–i wonder which make them the most money? But Casio has been a Computer Company for many years, so their position as a manufacturer of dedicated (vs. smart) watches may be unique.
You suggest that the only traditional watches that may retain a piece of the market are “luxury watches,” because they convey “status.”
Then ‘splain this to me Lucy: Casio watches. I’m having a hard time referencing numbers, but I believe they have been on a constant upswing. But, they are not “luxury” watches. And, it would seem they are not suffering any losses.
I’m on record here as saying this but I would wager that, like many other markets that have a disruption, that we splinter into a high/low model. On the high end, you have luxury brands and on the low you have the Casios, etc. And the middle class of watch manufacturers get squeezed.
You’ve seen this a lot in apparel already (Dior/H&M; whither Gap?), furniture (the Ikeaization of everything), airfare (biz-class or Southwest), even sports (going to a game is a premium event, everyone else watches it on TV)
Agree on the bifurcation model. There used to be three general levels to any good: discount (only care about cost), luxury (only care about quality), and the wide value (bang for buck) middle. Eventually both manufacturers and consumers have trouble with balancing, so ultimately choose to chase either lowest price or best quality. There is no race to the middle. Of course the middle currently is the iWatch anyway.
This is all exacerbated by online shopping, where discerning quality via digital image deprives one of many tangible signs of quality.
Racer88: status isn’t a monolithic entity. Neiman Marcus can go bankrupt (and it did) while Zara expands because they serve different needs, different consumers. The luxury department store category isn’t big enough for Nordstrom, Saks, Bloomies, etc to all thrive anymore. That doesn’t mean Kohl’s is going out of business. Same thing with Casio in watches