Will ‘smart watches’ and ‘wearables’ kill the Swiss watch industry?

9 09 2014

The last two years I have been asked many times if I believe that the so-called ‘smart watches‘ and ‘wearables‘ will conquer the valuable ‘wrist real estate‘ from the Swiss watch brands on all of our wrists.

My answer is always and unconditionally: NO!

Sony Smart Watch on Alon Ben Joseph's wrist.

Ace Jewelers was the first Dutch jeweller to sell smart watches. Here is the Sony Smart Watch on my wrist.

I hear you saying: “This Alon is not objective! Not only is he a jeweller and salesman of watches, but also an enormous WatchFreak!” I am indeed guilty of selling watches and privately a huge watch fanatic, but I do believe that I am objective and able to give an answer to this question as I have always ‘lived’ in this industry (the watch industry) and also grown up with electronics.

As a little kid I (born in 1979) I grew up with the resurrection of the Swiss watch industry after it was hit hard in the 1970s. So hard, that it almost whipped out the complete Swiss watch industry (due to the Quartz Crisis). Hence, my first watch at an age of four (in 1983) was a Swatch (couldn’t even read time yet) and have worn the first Casio G-shocks out there. The feeling is creeping up that the complete watch industry (not only the Swiss, but also the Japanese, Chinese and German for that matter) is on the brink of another ‘Quartz Crisis’! (Read more about this crisis: Wikipedia, Haute Horlogerie Assocation and Calibre 11 Blog.)

Swatch watch 30th anniversary Limited Edition.

I still collect Swatch watches today. This is 30th anniversary limited edtion launched in 2013.

Do I think that this is true? No, I do not think we will have a huge ‘live-threatening crisis’ for the (luxury) watch industry on our hands, but I do think that the luxury industry (watches, fashion, cars, etc) are lagging, frozen in their old ways and will get hit… Hit hard. So, it might be a bold statement, but I do dare to say that the luxury industry and the watch industry in particular are on the brink of a huge revolution, after having a great, smooth and exponential growing evolution (for at least three decades)… We all know that (smooth) evolutionary periods are abruptly interrupted by (unexpected and) game-changing revolutions.

Why do I still sound so positive, if that is my opinion/view? Well, I believe that as society, consumer behavior and norms & value change, and they are changing faster than ever before, we will see that we will utilize our ‘wrist real estate’ better… We have two wrists 🙂 So, it doesn’t mean that consumers will throw away their mechanical watches and automatically swap it to a digital smart watch/device. I also expect that eco-friendly smart watches will not only be powered by, for example solar power, but maybe also by (kinetic) mechanical automatic movements… Hybrid watches… Remember the Japanese Seiko Kinetic movements or  the Swiss AutoQuartz movements made by ETA (and used by Omega, Tissot and Swatch for example)?
But, on the other hand, I do believe that the marketing and communication needs to change by the premium brands that manufacture ‘old school’ mechanical watches. As the newest generation that know how to use smart phones and tablet computers before they even know how to crawl or feed themselves, will not even want to wear anything (besides some 3D printed jewelry maybe) on their wrists, arms or any body part for that matter… The sole reason that the Swiss (high-end) watch industry recovered after the Quartz Crisis, is because watches become an even bigger status symbol that it was before the Quartz Crisis in the 1970s and that it gave the owner a romantic sense of feeling and nostalgia. I do not think this will fade with the growing usage of smart devices markets.

I have been walking around with the idea to write an article about this subject for quite some while now. As the editor-in-chief of my favorite (and the best trade magazine in the watch industry) Europa Star, Mr. Pierre M. Maillard, always writes such cutting edge and precise views about the watch industry, he triggered me not only to write my own two cents, but also share his article: Mechanical Intelligence” by P.M. Maillard for September 2014 edition of the English Europa Star Magazine. Although Maillard hardly refers to other articles in his own, he starts of with another article in this one:

An interesting article that appeared recently in The Economist (“The high-tech world of old-world watches”) offered a different take on the implications of the approaching tidal wave of smart watches. The premise of the article is that there is a great deal more innovation in the art of mechanical watchmaking than in supposedly “smart” watches.
According to The Economist, smart watches are no more than a new way of presenting and adapting existing functions and applications in “a mash-up of phone, activity-tracker and music-player.”
And despite the fact that almost two million were sold last year, Endeavour Partners in the USA found that one-third of buyers tire of them rapidly, and simply stop wearing them within six months.
The Economist takes the contrary view that true innovation is to be found in good old-fashioned mechanical watchmaking, stimulated by the “vast profits still made in and around Switzerland’s ‘watch valley’,” and by the “unexpected uses of untraditional materials, that may in time transform the industry.” quoting Maillard in the latest edition in Europa Star Magazine. He indicated that he is skeptical if “the new Messiah Apple” will succeed to kill off the Swiss watch industry single-highhandedly, as he continues:

Although some watchmakers dismiss out of hand any risk of being swallowed up by the technology monster, and others already fear for their lives, the true outcome will probably lie somewhere between the two.

Maillard warns the Swiss watch industry that “it must avoid seeking refuge in denial, as it did during the famous quartz crisis, which came close to sinking the entire industry. Arrogance is a poor counsellor. Nevertheless, the idea that everyone and everything should be constantly connected (because in addition to smart watches we should expect to see smart refrigerators, smart cars, smart baby’s bottles, etc.) will eventually be undone by its own ubiquity.” And, he finishes his great article with a positive note: “Not everyone wants to be permanently plugged in, and the number who do is probably diminishing. One of the virtues of traditional watchmaking is the mechanical poetry that connects us not to the internet but to the cosmos, to the mysteries of time and beauty. And therein perhaps lies its greatest strength.
UP by Jawbone

UP by Jawbone bracelet.

You might wonder what I do with my two wrists. Well, I often (but not always) wear two wrist watches, one on each wrist. It has nothing to do with telling time or having access to two different time zones simultaneously, but do so exclusively due to my obsessive love for the art of watchmaking. Yes, I do own pocket watches and no, I never wear them. And, yes, I do love technology and innovation too. It took me a while to decide if I do want to be a (volunteer) victim of the all new all connected world and I decided that I do and I decided to test a UP by Jawbone bracelet. I just ordered my first one on Amazon yesterday. But, I am also one of these consumers that Maillard refers to: I do not always want to be online. I think we all have this contradiction in us: we often are ‘stuck in this rat race’ of being on top of things all the time (read: super connected and online), where-as (for example in the weekend or during holidays) we embrace and cherish our (complete) downtime (read: unconnected and offline).

To conclude this article/post/my ‘two cents’: I do not think that smart watches like the iWatch by Apple and/or wearables like the UP by Jawbone will kill the premium watch industry. But, I do think that if the watch industry does not at least acknowledge and even better, embrace the new technologies and listen very carefully to the wishes of the (new generation of) consumers, many brands in this industry will perish. And, the gaps in the market will be filled by the Apples, Samsungs and the ‘many Kickstarter projects that we can expect’ of this world. A new generation has already grown up with touch screens, uses smart phones and tablet computers, and these kids will not automatically surrender their wrist to a ‘weird thing on your wrist with a strap that can only tell time’  (that maybe is possible indicated the date and if you are lucky has a chronograph)… They need a totally different method and argument of convincing to buy a watch that needs to be wound by hand, wrist movement, or even worst, can’t be charged by themselves as it has an old school battery inside….

Potential design iWatch by Apple.

When I wrote this article the iWatch was not launched yet, and this picture shows an impression of how it could look like.

So, for now I am going to unpack my new Jawbone UP bracelet, that I am going to wear on ‘the other wrist’, as my left wrist will always be reserved for old school nostalgic mechanical wristwatches. 🙂

PLEASE DO SHARE YOUR TWO CENTS ON THIS SUBJECT HERE BELOW.



Alon speaking during Global Ecommerce Summit 2014

13 05 2014

Launched six years ago, the Global E-Commerce Summit is the leading international event that focuses on the most important trends and developments in global e-commerce, cross-border trading and omni-channel retail. After editions in Amsterdam and Monaco, the event settled on Barcelona, which has now been the home of the summit and the awards ceremony for the last four years.

Three days with inspiring key notes, market insights, business strategies, useful business cases, networking possibilities (like the Global E-commerce Party) and of course the fourth edition of the European E-commerce Award ceremony.

In 2014 the theme will be: The Next E-Commerce Revolution: No Borders, No Channels.

Alon Ben Joseph speaking at Global Ecommerce Summit 2014

In 1998 Alon joined the family company as a marketing manager and created the first website for the company. In 2008, as Co-CEO of the company, Alon launched the first international eBoutique in the Netherlands to be authorized to retail high-end Swiss watch brands and premium diamond jewelry. Together with this launch, the company was transformed from a classic local retailer in to an international cross-channel retailer. Many innovations followed, like: the first augemented reality tool for diamond rings in the world, first etailer in the world that has been authorized by IWC Schaffhausen to sell online and the first Dutch jeweller to launch a stand-alone mCommerce site for luxury accessories, watches and diamonds.

On June 16th, 2014 Alon Ben Joseph will speaking during the Pre-conference e-Payments track of the Global Ecommerce Summit about “Challenges of a high-end jeweller with online payments.

See more of Alon’s former and future speaking engagements on this dedicated page.



Internationale eFulfillment van omnichannel juweliers

20 06 2013

Luxemerken zijn nog steeds passief met eCommerce, maar de statische houding kan deze merken duur te komen te staan. Veel mensen vragen zich af of er daadwerkelijk horloges en sieraden online gekocht worden en dus verkocht worden door etailers. Maar wat veel mensen niet weten is dat Amazon bijna net zo veel horloges en sieraden verkopen als de grootste pure player Bluenile.com die jaarlijks ruim 400 miljoen dollar omzetten.

Ondanks dat luxemerken nog steeds passief zijn met hun eCommerce strategie, zijn sinds het begin van deze eeuw horloges en juwelen met bedragen van ruim 5.000 altijd online te koop geweest. En, deze markt groeit heel rap. Tot 2008, het jaar dat AceJewelers.com live ging als eBoutique, verboden de luxemerken hun officiële dealers online te verkopen. Dit geldt nog steeds voor alle dealers van de luxemerken buiten de EU. De uitzondering is geldig voor officiële dealers van deze luxemerken in de EU, dankzij een uitspraak van de Europese Commissie onder leiding van Neelie Kroes.

 

Heritage 1881 Hong Kong Shopping Mall

 

To eCommerce, Or Not To eCommerce
De reden dat luxemerken, zoals Chanel, Fendi en Rolex, zo fel gekant zijn tegen ecommerce is omdat ze vinden dat de exclusiviteit van hun merken aangetast wordt en dat het namaak in de hand werkt. De creatieve directeur van Chanel, Karl Lagerfeld, heeft in 2009 aangegeven: “The Internet does not convey the unique feel and sophistication of luxury materials, refined tailoring and extraordinary attention to detail found in luxury fashion. Shopping for high fashion required a ‘multi-sensory environment’.”
Maar visies en opinies veranderen rap en zelfs Lagerfeld is overstag. Tijdens LeWeb 2011 [VIDEO] heeft Lagerfeld aangekondigd zijn eigen merk Karl Lagerfeld online verkocht ging worden via pure player Net-a-porter.com. De laatste twee jaar zijn veel merken overstag gegaan en keuren goed dat officiële (brick and mortar) retailers hun merken online mogen verkopen. Uiteraard zijn de merken ook gestart met het zelf verkopen via hun eigen websites. Tegenwoordig is het mogelijk een: Cartier juweel, Louis Vuitton tas, TAG Heuer horloge en Gucci outfit online te bestellen bij de merken zelf. Wel is frappant dat buiten de EU de luxemerken de retailers geen goedkeuring geven om online te mogen verkopen en het zelf wel doen.

 

Karl Lagerfeld sold online at net-a-porter.com

 

eFullfilment
Het is niet meer de vraag of luxemerken online moeten verkopen. En, het is ook niet meer de vraag of consumenten online luxe goederen willen aanschaffen. Nu is de vraag geworden: wat is de meest efficiënte manier om online luxe goederen te verkopen? Veel merken hebben geen of slechts gemiddeld tien jaar ervaring met retail (via eigen mon-brand winkels) en hebben amper ervaring met eCommerce. Richemont, moedermaatschappij van onder andere: Cartier, Montblanc, IWC, Panerai en nog veertien luxemerken, heeft eerder genoemde pure player Net-a-porter.com gekocht. Waarschijnlijk vanwege de know how van deze eBoutique, die als eerste premium modemerken online verkocht. Dus veel merken en retailers zou nog zoekende naar de beste modus. Er is in de luxe branche nog steeds sprake van een kanaalconflict, die in sommige branches wel al is uitgevochten en/of uitgekristalliseerd is. Daarbij worstelen luxemerken met geografische distributiemodellen, waar eCommerce liever natuurlijk geen rekening mee houdt. Dan komen er nog belangrijke zaken bij zoals: vreemde valuta, nationale BTW tarieven, importheffingen, vervoerders die geen hoge waardes aannemen, verzekeringen, retouren, persoonlijke contact centra, after sales service en omnichannel integratie. Kortom, het hele traject vanaf het moment dat de consument op de koopknop heeft gedrukt in een eBoutique tot aan de aflevering. Dit kan men samenvatten als eFulfilment.

 

Screen shot AceJewelers.com

 

Omnichannel juweliers
De Ace Luxury Group is zo een retailer die zich getransformeerd heeft van een ‘old school’ retailer met uitsluitend brick-and-mortar winkels naar een ‘new school’ omnichannel retailer die naast de fysieke winkels ook webshops opereert. Plus daarnaast een apart platform voor mCommerce opereert, actief is op social media en tot slot ook een boek (luxe catalogus) uitgeeft, dus voldoet aan de zogenaamde: bricks, clicks, ticks, smicks en flicks. Ace & Spyer Juweliers, opgericht in 1729, is de oudste juwelier van Amsterdam en was de eerste juwelier in Nederland die in 2008 een eBoutique starte voor luxe goederen. De horloges en sieraden werden meteen in twee talen gepresenteerd en wereldwijd verkocht. Vandaag bestaat de Ace Luxury Group uit drie fysieke winkels in Amsterdam (Ace & Dik Juweliers, Ace & Spyer Juweliers en Ace Trends) en drie eBoutiques (AceJewelers.com, AceTrends.com en AceEyewear.com), met bijbehorende mobile en social media strategieën. De websites houden rekening met Euro’s, Amerikaanse Dollars en Britse Ponden en maken onderscheid in prijs tussen een EU-consument (prijzen met BTW) en een niet-EU consument (BTW vrij winkelen).

 

Alon Ben Joseph

 

Alon Ben Joseph is een ondernemer met grote passie voor horloges, sieraden, diamanten en internet. Als eigenaar en directeur van de Ace Luxury Group was hij de eerste luxe juwelier in Nederland die een eBoutique lanceerde die officieel van de luxemerken online mocht verkopen in 2008. Deze passie worden vaak gedeeld tijdens vakgerelateerde evenementen, voor zowel juweliers, retailers als internet vakidioten.

Nodig Alon Ben Joseph uit om te komen spreken tijdens een evenement.



Speaking at Thuiswinkel Update 2012

23 08 2012

I have been asked to speak for the second time at the leading eCommerce event in The Netherlands: Thuiswinkel Update. This time I am one of the CEO’s participating as a panel member during the so-called: CEO Debat. The event will take place in DeFabrique in Utrecht (The Netherlands) on September 27th, 2012.

Please come and join the discussion on September 27th, 2012 in DeFabrique in Utrecht. Get your tickets via: http://www.thuiswinkelupdate.nl and join the buzz via: @T_W_update and #TWU12.

I hope to see you all there :)



Book Review: “The Shallows” by Nicholas Carr

16 10 2011

Have you also noticed how your attention span has went down the last ten years? You can’t focus on reading a book or write an article? How your multitasking skills improved in the last decade?

Well, I certainly did and when I read a shot book review about Nicholas Carr‘s new book: “The Shallows: How the internet is changing the way we read, think and remember”, I knew I had to read it.

Nicholas G. Carr

So I did and hereby I want to share a short summary with you.

The book is a great mirror to show us how the internet has been integrated in to our daily lives and is changing they way we use our brain and therefore think. Carr draws from historical and cutting edge scientific research to show us that Internet is rewiring our brains and actually creating more superficial understanding. The back cover summerizes is nicely:

“By moving from the depths of thought to the shallows of distraction, the web, it seems, is actually fostering ignorance.”

Personally I totally I can relay to this, as I noticed that my short-term memory is really suffering. Because I am using GPS tools to navigate roads, search engines to find things and my Blackberry for all my phone numbers & appointments. I love to write posts for the several blogs I manage, but I notice that I often can’t find my self in a concentrated mood to produce a quality post. I am trying to study new languages and find my settle shifting on my chair unable to concentrate. On top of that I noticed I love the days where I totally switch off: no usage of any electrical device whatsoever.

As I don’t want to spoil too much of The Shallows, I will just conclude this brief post with a 3 parts of texts:

From page 217 (of the red paperback edition): “Automating cognitive processes in this way has become the modern programmers’ stock-in-trade. And for good reason: people naturally seek out those software tools and Web sites that offer the most help and the most guidance – and shun those that are difficult to master. We want friendly, helpful software. Why wouldn’t we? Yet as we cede to software more of the toil of thinking, we are likely diminishing our own brain power in subtle but meaningful way. When a ditchdigger trades his shovel for a backhoe, his arm muscles weaken even as his efficiency increases. A similar trade-off may well take place as we automate the work of the mind.”

From page 219: “A series of psychological studies over the past twenty years has revealed that after spending time in a quiet rural setting, close to nature, people exhibit greater attentiveness, stronger memory, and generally improved cognition. Their brains become both calmer and sharper. The reason, according to attention restoration theory, or ART, is that when people aren’t being bombarded by external stimuli, their brains can, in effect, relax.”

From pages 221-222 I want to conclude this post about a must-read book: “We may lose our capacity “to concentrate on a complex task from beginning to end,” but in recompense we’ll gain new skills, such as the ability to “conduct 34 conversations simultaneously across six different media.” A prominent economist writes, cheerily, that “the web allows us to borrow cognitive strengths from autism and to be better infovores.” An Atlantic author suggests that our “technology-induced ADD” may be “a short-term problem,” stemming from our reliance on “cognitive habits evolved and perfected in an era of limited information flow.” Developing new cognitive habits is “the only viable approach to navigating the age of constant connectivity,” Carr concludes chapter ten.”

If you are interested in more articles by Nicholas Carr, check his blog: Rough Type.