In Watches, What Does Luxury Mean Now?


Until recently, most luxury watchmakers did not overthink their purpose.

“A few years ago, you woke up to sell watches,” Jean-Marc Pontroué, the chief executive of Panerai, said at a media event last month in Los Angeles. “Now you think about your business in a different way.”

Mr. Pontroué was alluding to a newfound sense of global interconnectedness underscored by the pandemic, but for many watchmakers, the events of 2020 crystallized a movement that had been building for more than a decade.

It began around 2009, when watchmakers, led by Chopard, started to question how they obtained raw materials. Over the past five years, spurred by broad social movements — including #MeToo and Black Lives Matter — the industry’s efforts to ensure responsible sourcing and sustainability have evolved into a wholesale rethink of manufacturing and marketing.

From incorporating upcycled plastic into their timepieces to downplaying the aura of exclusivity that once permeated their messaging, luxury watchmakers now are doing everything possible to prepare themselves for Gen Z buyers, for whom inclusivity, sustainability, transparency and traceability are not negotiable.

Born between 1997 and 2012, members of that generation, together with millennials, are expected to account for 70 percent of the global personal luxury goods market by 2025, according to a November 2021 report by the management consulting firm Bain & Company And they are quickly reframing the meaning of luxury.

Ziad Ahmed, the 23-year-old chief executive and co-founder of JUV Consulting, a New York-based firm that advises companies on how to market to Gen Z, said he hoped that companies would commit to making a really good product “that prioritizes people and planet every step of the way.”

In practice, Mr. Ahmed explained, that means what he called a “thoughtful and sustainable” supply chain centered on local production and well-compensated workers.

“How do we embrace the circular economy? How do we uplift and empower diverse communities? How do we give back in a sustainable and purpose-driven way?” Mr. Ahmed said. “I believe there will still be a place in 25 years for goods that are made with a lot of intentionality. But they can’t exist in a silo. A company culture of giving back is really important.”

So is a culture that takes into account current events. Just after Russia’s invasion of Ukraine, observers began calling for watchmakers to denounce the war publicly and to stop exporting watches to Russia. In the days that followed, major groups, including LVMH Moët Hennessy Louis Vuitton, Kering, Richemont and Swatch, as well as some independents, including Rolex, said they were taking action and many closed their stores in Russia, at least temporarily.

(Russia is not a major export market for Swiss watches, ranking 17th, just after the Netherlands and Australia, on a list of the Swiss watch industry’s top export markets in February, the most recent available ranking.)

The emphasis on thoughtful management and purpose over profit dovetails with other anti-consumerist movements percolating around the world, notably in China, where the concept of “lying flat” — or tangping, as it is called in Mandarin — took root last spring, after a viral post gave voice to the pressures placed on young people in Chinese society.

Rolf Studer, the co-chief executive of Oris, a Swiss watch brand known for its dedication to environmental causes, has seen the shift in consumer mind-set firsthand. “As a luxury brand, we are now able to gather people at cleanup events,” he said. “Ten years ago, everybody would have said, ‘That’s crazy.’ People wanted a glass of Champagne. Now they go to the beach to collect trash.”

And it is not just idealistic 20-somethings demanding change. A veteran of the luxury business, Stephen Lussier, the outgoing executive vice president for brands and consumer markets at De Beers, noticed the shift in his own way of thinking in August 2019, when he was reading a newspaper article about the British government introducing green license plates for electric vehicles.

“I said to myself, ‘That’s really cool, I’d like one of those.’ And then a few pages later, I thought to myself, ‘Why did I think that?’” Mr. Lussier recalled on a recent video call. “What do I need a green license plate for? It dawns on me: Because I want other people to know.”

“What consumers want to express about themselves is changing,” he said. “That’s what’s driving the move toward purposeful brands; they want to associate with brands that share those values.”

For proof that a purpose-led strategy makes sense for the bottom line, just ask Georges Kern, the chief executive of Breitling. He said he was convinced that the reason the brand was often singled out as a top sales performer — in a report published earlier this month Morgan Stanley said Breitling’s 2021 sales grew by 42 percent year-over-year — had to do with a transformation he initiated in 2017 to emphasize inclusivity, sustainability and a more casual approach to selling (like boutiques equipped with pool tables). They are the three pillars of what he called “neo-luxury.”

“We did this before Covid, and this is why we totally outperformed the market,” Mr. Kern said on a recent video call.

As a privately held brand, Breitling does not disclose revenues. Morgan Stanley, however, estimated its 2021 sales at 680 million Swiss francs, about $732.4 million, placing the brand at No. 11 on a list of the Swiss watch industry’s top 50 brands — up from No. 15 in 2017.

Mr. Kern reflected on Breitling’s former image, as a masculine brand with its own jet team, supported by advertisements featuring Pop Art illustrations of scantily clad women. In 2018, “when we stopped the jet teams, there was an outcry,” he said. “Many retailers and journalists were extremely skeptical and thought it was a mistake. Today nobody would even consider going back.”

What to do about the watch trade’s carbon footprint has proved more challenging. When the industry gathers in Geneva this week for the Watches and Wonders fair, there will be news conferences to tout new products and parties to herald the return of in-person events, but now that so many people have become accustomed to digital meetings, plenty of watch executives are ambivalent about the impact of the travel required to transport retailers, journalists and brand representatives to Switzerland. (In 2019, in its former incarnation as the Salon International de la Haute Horlogerie, the event drew a total of 23,000 attendees.)

“You will see that everything will be toned down,” said Karl-Friedrich Scheufele, co-president of Chopard. “Everyone is very much looking forward to the event because meeting people in person once in a while is irreplaceable. But of course we don’t need five watch fairs in a year. Maybe we could do with one Watches and Wonders every two years?”

Concerns about sustainability are also fueling the watch industry’s growing obsession with recycled materials and pre-owned goods, which, just a few years ago, were anathema to its concept of luxury.

“It’s my 25th year in the industry — when I joined, it would have been almost an insult to talk about recycling for luxury products,” Julien Tornare, chief executive of Zenith, said on a recent phone call. “Luxury had to be brand-new, prestigious, shiny.”

To many younger buyers, however, modern luxury has little to do with such notions.

“My daughter is 18 years old and she’s doing environmental studies at college,” said David Hurley, the New York-based executive vice president of the Watches of Switzerland Group USA, a multibrand retailer with six showrooms around the United States as well as numerous Mayors Jewelers locations. “I bought her an Oris Aquis with a recycled dial using plastic material and she loves it for what it represents: The brand is climate neutral and they’re leading by example.”

The same could be said of watchmakers’ new approach to packaging, which traditionally was made of solid, rare woods cushioned by heaps of cardboard and plastic. In October 2020, for example, Breitling introduced a foldable watch box made entirely of recycled PET, or polyethylene terephthalate, a plastic from bottles.

To communicate all the changes, watchmakers have had to reinvent their images.

Mr. Pontroué of Panerai said that rather than hammering on a “We are Swiss, we are limited” message, his brand, like virtually all others, is emphasizing diversity and inclusion in its advertisements, including in a global campaign introduced in December to promote its new Quaranta collection.

“We always used to use Italian male models,” he said. “Our message was Italian, male, muscular — that was very much our profile. Now we’re using Arab, Black and Asian models.”

The substance of such campaigns also has been changing, from images and copy that emphasize products and style to behind-the-scenes content heavy on authenticity and storytelling.

Christoph Grainger-Herr, the chief executive of IWC Schaffhausen, cited the 2021 campaign for its Big Pilot’s collection of aviation-inspired timepieces as an example of a shift in its communications strategy.

“It’s much more about our product design and the engineering process and the underlying story of the partnerships around those products,” he said on a recent video interview. “This is becoming more and more important to the next generation of clients.”

Mr. Scheufele of Chopard summed it up when he noted that even though the brand had been nurturing craftsmanship and training young artisans and watchmakers for years, “we never talked about it very much because to us, it just seemed normal,” he said. “Today I think it’s more about backstage, and less about the theatrical side of things.”

Across the board, watch executives agreed that the point of a luxury brand in the 21st century is about so much more than the veneer of prestige and exclusivity. Patrick Pruniaux, the chief executive of Girard-Perregaux and Ulysse Nardin, used an automotive analogy.

“I was thinking about our purpose,” he said in a recent video interview. “It’s a little bit like when you buy a new luxury car — who reads the manual? No one. And one day you think, ‘I’m going to go deeper’ because you want to understand something and you go into the manual and you realize that what you’re using is only the tip of the iceberg. A good luxury car has been designed with a lot of functions you don’t even know exist.

“Luxury is all about that depth,” Mr. Pruniaux added. “Today, people are digging much deeper. It’s not about the function; it’s about understanding what’s behind it.”



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