China remains the only favorable market for luxury watch export amid the pandemic, showing great future potential for this market.
Thanks to the refined requirement for premium customer experience, luxury watch brands are adopting a unique path to digitalization, integrating more disruptive digital tools for an unparalleled online experience.
Online platforms should have more implications for luxury watch brands than simply acting as marketplaces. That is only one part of the entire game.
The luxury watch industry stands as the epitome of refinement and classiness, as it spotlights craftsmanship, heritage, exclusiveness, and a touch of mystery. But, according to Swiss watch industry data, Mainland China was the only positive export location during 2020 (24 percent), making it the world’s most relevant market for that industry’s growth. Yet, China is unforgiving and perpetually evolving — a place where consumers want to communicate, belong, and be the brands they purchase, particularly younger millennials and Gen Zers.
In this land of dynamic digital innovations, businesses see digital as a pivotal battlefield to win, and luxury watch players are no exception. Until now, luxury watch brands still relied heavily on their offline boutique channels where consumers could look, linger, and joyously relish in one-on-one service. But the industry is gradually hopping on the digital bandwagon, and it’s taking a different path to digitalization as it has such a distinct dynamic and significantly high requirements for building unparalleled luxury experiences.
Watch brands are flocking to open up flagship stores as online sales destinations, hoping to grab a slice of the big e-commerce pie. But, online platforms have more implications for luxury watch brands than simply acting as marketplaces. That is only one part of the entire game.
Experience and know-how are probably more important in this sector than in any other industry. What size should I wear? Which color strap goes better with my skin tone? As such, many brands have placed their bets on livestreaming‚ the tool that “has it all” — by spotlighting two-way conversations rather than sales conversions. Additionally, they are reaching out to different consumer groups, delivering their brand heritage, and revealing the unseen artistry and savoir-faire behind each delicate timepiece.
Another big question for brands tackling the digital wave is how to build the same premium atmosphere and prestigious service while adding more value to their overall communication strategies. To help answer this question, disruptive digital tools like AR, VR, and 3D tech are gaining momentum. VR Technology offers consumers an immersive experience, like a guided tour of the brand’s virtual store, where 3D product displays allow consumers to experience products in 360-degree perspectives. Backed by big data, brands now have better visibility of their consumers’ behaviors and preferences and can continuously optimize their marketing strategies. Meanwhile, AR technology allows consumers to test products through a direct virtual try-on.
For the luxury timepiece industry, it would be profoundly beneficial for online channels — whether they are social or e-commerce platforms — to act as broadcasters on a broader stage where brands can amplify their influence and ramp up their social buzz. We must admit: Online has a clear advantage over offline in certain aspects, such as leveraging a more transparent price tag, more access for consumers to compare, and a fuller product assortment. Additionally, it offers a more dynamic approach for narrating the brand story and showcasing products that resonate with younger Chinese generations.
When looking at these latest innovations, it’s curious to discover that many significant players have implemented tools like Tmall 2nd loft mini-game and Douyin Challenges to their digital portfolios. These and other refreshing approaches for delivering brand culture and education have engaged audiences in entertaining and interactive ways.
Unique online mechanism to push sales
In addition to the three approaches that the luxury watch industry has adopted for its digital transformation, it also has the advantage of incorporating diverse methods to facilitate sales, including installment payment services, special festival offers, and extended brand or platform insurance, to name a few.
Therefore, the players that can see the big picture and extend digitalization beyond online boutiques while integrating an all-around carrier of products, services, and experiences will have the most tangible advantages and will reap the most rewards and minimize more risks in the long run. There is no room for opaqueness in the luxury business.