Gen Z willing to spend big on luxury watches
Luxury watchmakers are increasingly targeting Millennials and Gen Z, who are expected to spend three times more on luxury goods than other generations by 2030. At this year’s Watches & Wonders conference, which gathers top watch brands in Geneva each year, Rolex boss Jean-Frédéric Dufour said watchmakers must seduce a generation "which sees everything through screens". Rolex isn’t the only traditional watchmaker that is pivoting to a younger demographic. Luxury brands Cartier and Tiffany are collaborating with Snap AR to offer augmented reality (AR) ad campaigns to attract Generation Z customers. Through virtual fittings on Snapchat, users can experience how certain products would look and feel without leaving their homes. And for century-old watchmaker H. Moser, over 50% of its Asia Pacific sales already come from Gen Z and millennials, and their share will likely grow in the near future.
Authenticity is key
Collaborating with social media platforms like Snapchat is one way to tap into growth opportunities. Another strategy has been to choose Gen Z brand ambassadors. TAG Heuer recently partnered with Australian actor Jacob Elordi, known for his role in the hit show Euphoria, and Chinese music artist Cai Xukun, both 24 years of age. But according to TAG Heuer marketing director George Ciz, simply choosing a young celebrity isn’t enough to convince Gen Z. He says authenticity is vital to appeal to younger generations, meaning the brand must live and breathe the values that appeal to this younger demographic. Vincent Montalescot, marketing director of Montblanc, also believes authenticity is key as consumers are quick to punish brands that fake being youthful only to boost sales.
High demand for ‘instantly recognizable’ watches According to Deloitte, Gen Z and Millennials will continue giving up connected wearables such as the Apple Watch in favor of "instantly recognizable", highly Instagrammable watches. Entrepreneurs like Christophe Hoppe — a Frenchman based in Australia, who founded the Baseule brand — have tapped into this trend. While made in Switzerland, his watches always incorporate "a piece" of Australia, from the sand of a northern Sydney beach to a tile from its famous opera house. Eco-friendliness being another key concern among Millennials and Generation Z, sales of second-hand Swiss watches are also booming. Deloitte predicts the second-hand watch market, which is currently valued at around CHF 20bn, could reach CHF 35bn by 2030. The trend is being driven by an increasing number of watchmaker-certified pre-owned watch platforms, and major brands such as Cartier, Piaget and Rolex are investing in the market.