Traditional Watch – Last Hurrah?

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Watch case

The traditional watch is going the way of vinyl records. In the same way that only hipsters and wealthy audiophiles spin actual records, hipsters and wealthy horophiles are going to be the main market for traditional watches. Right now, this isn’t a big issue for manufacturers. But it should be. Here are are three trends that show which way the winds of change are blowing . . .

Vintage Mania

Audemars Piguet lineup - traditional watches?

Earlier this year, Audemars Piguet stuffed their Code 11.59 movement into a $53k reproduction of a 1941 timepiece, the [Re]master01 Selfwinding Chronograph. It sold out.

No surprise there. For decades, AP’s profitability has rested on the bedrock of the Royal Oak – a watch born in 1972. The Code 11.59’s relative commercial failure led AP to go back for their future.

In the last two years, traditional watches with a vintage vibe have come to dominate the market. In our most recent New Watch Alert, seven out of the eleven traditional watches are updates on models from the manufacturers’ back catalogues.

TAG Heuer Carrera Chronograph - one of those traditional watches

There isn’t a single major watchmaker that hasn’t released at least one watch relying entirely on horological nostalgia to move the metal. All the mass market manufacturers have gone retro. Seiko, Hamilton, Longines, Timex, Swatch, G-SHOCK, TAG Heuer, Oris – you name the brand and I’ll bet dollars to donuts they sell a “reimagining” of a discontinued watch. Many offer an entire collection of “heritage” pieces.

Rolex Skydweller

We’re at the point where new new watches (e.g., the Code 11.59) don’t sell as well as new old watches.

Rolex’s entire business model – their success – is based on this approach. The Swiss behemoth hasn’t introduced a genuinely new Professional model since the Skydweller of 2012 – the brand’s first new watch since the Yachtmaster of 1992. If you’re waiting for the next all-new Rolex Pro watch, keep waiting.

Classic swatch - traditional watch

This “nostalgia kick” isn’t a temporary fad. With the advent of the smartwatch, more and more consumers see traditional watches as a thing of the past. A quaint anachronism.

A view that’s going to decimate the traditional watch industry, as hundreds of millions of consumers who can’t read an analogue watch enter the marketplace. No wonder YEMA and Hamilton brought back their horrific digital watches.

Gimmicks Go Wild!

 

Richard Mille RM-27-04 Tourbillon watch face

Makers of stupidly expensive watches (e.g., Richard Mille) don’t need to worry about nostalgia; they’re in the braggadociousness business. High horology is now for buyers who wear a smartwatch during the daily grind and/or working out, then swap it for a horological status signaler for important meetings and social events. 

Remy Cools Tourbillon Souscription - New watch alert

But even supposedly smartwatch-immune high horology is undergoing a radical transformation. Where over-the-top understatement was the statement (e.g., the Patek Philippe Nautilus), gimmicks now rule the day. Like . . . every watch that has a tourbillon. Or the million dollar tennis racquet racket known as the Richard Mille RM-27-04

Jacob & Co. Scarface Opera

The trend is down to the fact that the smartphone and smartwatch have relieved the watch of its practical and thus aesthetic obligation to tell the time in a coherent fashion. A watch is now jewelry.

And that means it can be anything. And for it to be really something, it needs a gimmick.

You might consider the Jacob & Co. Scarface Opera absurd, and you’re right. But these days, gimmicks are catnip for those who can afford $360k to say hello to their little friend (and take him home).

Timex Peanuts gimmick

Gimmicks are just as popular at the bottom of the traditional watch market, where the words “cool watch” are equally prized. What better gimmick than a tie-in with an intellectual property that tugs at the buyers’ emotions?

Timex slaps a picture of Snoopy’s cross-species fraternization on a bland Chinese-made automatic, adds a yellow second hand and charges customers $279 for the privilege of feeling warm fuzzies about a $15 watch.

Raymond Weil Jimi Hendrix Limited Edition caseback

The same gimmicky emotional appeal is in play for the ever-increasing number of watches worn as a cult signifier and/or a badge of honor. There’s an ongoing flood of timepieces tied to famous figures, social causes and environmentalism (e.g., Raymond Weil Hendrix, Timex T80 Rainbow and Oris Carysfort Reef).

Just as the smartwatch leaves high horology free to boldly go where Col. Tom Parker has gone before, it allows wearers of cuddly, fan-oriented and socially aware timepieces to put their heart on their sleeve without people thinking they’re time oblivious (i.e., they can’t hold down a job).

Less is More – The Last Hurrah

Collection of traditional watches (with one exception)

Once upon a time, consumers convinced themselves that they “needed” a new watch because, underneath that desire, they needed a watch. So why not buy a good one, more than one and maybe even more than one good one? You don’t have just one pair of shoes, do you?

Thanks to the do-it-all (and then some) smartwatch, the traditional watch is now an undisguised luxury. A fashion statement. That’s not a bad thing per se. But it changes the nature of a watch purchase.

Vacheron Constantin product shot

If you buy a pair of nice shoes, they’re still shoes. These days, if you buy a nice traditional watch, again, you’re buying a piece of jewelry. One you’re not going to wear on an all-day, every day basis. (By “you” I mostly mean the generation behind you.)

Traditional watch sales are trending upwards at the moment – both in terms of volume and average prices. Makes sense – buyers with Corona-conserved cash are indulging their desire for horological flexing. But I reckon that after this splurge, traditional watch buyers will be buying fewer watches. Stripped of practical pretense, occasional watches become a more occasional purchase.

These three trends indicate that something wicked this ways cometh. Specifically, a new kind of watch that frees the old kind of watch to reinvent itself. Good luck with that.

15 COMMENTS

  1. I dunno… I’m not feeling worried about traditional watches going away. Yes, “smart watches” are very popular, though they most definitely do NOT appeal to me. And, from what I’m seeing in watch groups and forums, they don’t appeal to “watch guys.” Many of us have no desire to have an expensive wrist-borne umbilical cord (with planned short-term obsolescence) to our phones. We just don’t.

    Perhaps it’s my recently renewed interest in watches that is creating a bias, but I see a vibrant watch industry. If I was to make any observation at this point, it would seem the low end and high end of watches will thrive, while the mid-priced models may have a hard time (pun).

  2. Hmm, need a mechanical step counter and pulse rate monitor. That would be kinda awesome if they didn’t steam punk it.

    • Mechanical pedometers were still in use not so long ago. Tying that in with an automatic watch doesn’t seem impossible, although seated wrist motion would register as steps. I’m doubting the feasibility of a portable mechanical pulsimeter.

      • Yeah, I was thinking about a pneumatic pickup, acoustic, or perhaps a spring drive-like electromechanical pulse reader? Clear a much harder than necessary way to do things, but would be cool if it worked.

  3. The vintage ploy generally works with me, unless they half-ass it with a vintage style in a modern 30% larger size. Gimmicks can be even more polarizing.
    Today I went to a Walmart watch section that I’d last been to about three months ago. I think the floor space and selection had shrunk by about a third in that time.
    The throngs littering low-end watch reviews on Amazon, people that replace their two figure watch every few years, will not be repopulated. I have no idea what the trajectory will be with frivolous watch purchases directly attributable to social media and influencers.

  4. As a millennial, I must say that the traditional watch is definitely not dead. More and more people I know, and through the grapevine, have their apple watch (usually a gift) and only use it for fitness purposes. Everyone hates the constant notifications and switches to a traditional watch for daily use. I the industry is not dead, but quartz watches definitely are.

  5. That no date Sistem51 is pretty sweet, I just ordered it from m̶y̶ ̶A̶D̶ Amazon.

    Ever since cheap quartz mechanical watches have gone in cycles. Mechanical watches are now solely a hobby and status marker, with cyclicality reflecting that fact. But they will not go away.

    We are currently on an unsustainable upcycle. SInce 2016 the US has had increasing asset bubbles driven by $1 trillion+ deficits and unsustainable monetary policy, including quantitative easing every time the stock market made people feel sad. Not just watches. Look at the craziness going on at bringatrailer.com. Look at stock market valuations that ensure historically low returns for decades. Look at art.

    Deficit spending and unsustainable monetary policy have gotten even worse with COVID-19. Aside from being a massive fraud on American taxpayers, the “Paycheck Protection Program” has paid for a lot of new Rolexes for those well situated enough to take advantage of the fraud. In the short term there will probably be even more selling out of future generations in the name of “stimulus”, which will mean even more watch demand. But it will not last.

    Long term if you are selling three-handed watches for more than $1,000 and your name is not Rolex, Omega, Patek, or AP I would not want to be you.

    The Swiss are going to face a reckoning. Their people not smart enough to go into money laundering, denying re-insurance claims, and remembering where the gold the Nazis stole is hidden are going to end up on the dole collecting universal basic income. Which will still prove to be more purposeful than polishing anglage.

  6. Damn, how old are you? 30 year old here and at least 50% of people I know 25-35 wear a non-smart watch. We’re talking major metropolitan area, diverse crowd. Maybe you’re super out of touch or maybe you wish that watches were dying (seems like by half your posts) but we like real watches just fine and we buy them.

    • I’m 61. And you are the last of your kind. OK, maybe one more generation. Click here and tell me I’m just a hater. When in fact I love traditional watches more than you can possibly imagine.

    • Wait, half the people that you know wear a non-smart watch, or half the people you know (that wear a watch at all) do?
      My observations are that smart watches are massively more popular with the 50+ market, and given that the major advantages of the things are health related, it makes perfect sense. A much slimmer number of the under-30 market care about the quality of their sleep or their standing pulse or whatever.

      I doubt there is any data on this, but I suspect that smart watches are the wrist equivalents of the old PT Cruisers or Honda Elements: designed and marketed for edgy young active people, latched onto by people a full generation older that found it suited their needs better. In the long run, smart watches may suffer from becoming too associated with being grandpa’s medication reminder. Velcro sneakers seem to have met that fate.

      • Smart watches pose a historically unique challenge in the competition for wrist space. Unlike quartz they offer real functionality that a mechanical watch cannot offer, not just a lower cost and unneeded accuracy improvement. It will be interesting to see who values that functionality.

        From a status perspective they show someone is a team player that wants to be informed, but showing the appearance that one does not need to be constantly updated on texts and messages will also denote its own status. Data privacy and hacking concerns will push people to limit the amount of connected electronic crap they have to worry about keeping updated.

        To me the real threat to the Swiss watch industry is the SO30B400 featured in this article, Which Amazon just sold me for $117.

        Everyone thinks the low end of watches is under threat, and the future is the $1,000 – $5,000 or even $7,000 range. I do think “dumb” quartz watches face an existential threat, except for something like the G-Shock that has built its own following.

        However, I think low end mechanical watches are the future, and everything over $1,000 that is not a real prestige brand or really technically interesting is screwed.

        A cheap Sistem51, or mechanical Seiko, Hamilton, or Tissot says I appreciate mechanical watches, and don’t need to get alerted of every ping someone sends me. Rolex says what a Rolex says, with Omega doing it a bit more subtly. A Baume & Mercier (and I should probably be including more Richemont brands here), or Tudor, or non-chronograph TAG Heuer or (this one hurts me to say but I want to be unbiased here) non-chronograph Longines says I can’t afford a Rolex. Not the kind of status message that people are going to want to spend well over $1,000 to convey.

        Good news for Swiss robots, bad news for Swiss “luxury” brands and Swiss watch assemblers.

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