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‘Time to change’ is the title of a book by Luana Carcano, an Italian university lecturer in management, and Carlo Ceppi, who has spent many years in the watch industry and is a member of the Fondation de la Haute Horlogerie. It is published by Egea (Milan) in co-operation with the Fondation de la Haute Horlogerie.

The authors have investigated the contemporary challenges facing the Haute Horlogerie and interviewed many business leaders and other important players of the watch industry in the period from January 2009 till March 2010. The Credit Crisis ended an unbelievable 7-8 years of overconsumption and watch brands will have to change their market strategies. That’s especially true for brands that moved away from their ‘DNA’. Brands will have to invest more selectively, to adept to local differences and to monitor unsuspected competition. A combination of a balanced portfolio of products ánd markets and a good distribution will be essential in the coming years.

In China (‘an oasis of hope’), but also in emerging markets like India or Mexico, a ‘first-mover advantage’ is important; late-comers will have it more difficult, but a presence in such markets is a must. For a start, image building with all available marketing tools and not once, but as a sustained effort, is important. It must be realized that what worked in New York may not work in Shanghai.
The fast growing Chinese luxury market is worth 5 billion dollars a year. However, as everyone is rushing in, the slices of this enormous pie are getting smaller, requiring more and substantial investments to retain market share. It should be kept in mind that Chinese customers buy ca. 60% overseas, in places like Dubai where brand windows are very important. Market and retail innovations are important in those markets, and may be imported to mature markets, which are essential for brand identity and reputation. However, mature markets will have to shift to more customized and personal products and services.

Local markets should be given greater autonomy, because national differences in culture remain pronounced. There are no scientific rules and the ‘gut instinct’ of local managers is important:  ‘Think global and act local’.
The recent wave of too many new products cannot be sustained by what is essentially only a niche market. At most, one or two new pieces a year are acceptable. ‘Less is more. Product shortage is good.’ To preserve and protect exclusivity a reduction of volume trade is necessary and quality should not be questioned. Exclusivity means a careful management of limited editions. A limited edition watch with a tourbillon is acceptable, but with only an automatic movement is recognized as nothing more than a marketing tool to generate money. Fans prefer innovative brands, but not radical ones. A range of collections (which should include a full set of products, from entry-level to top of the line, and adapted to regional tastes) can be modernized, but not in a revolutionary way. Customers look more than ever for ‘value for money’ and new brands will face a tough road.

The authors devote considerable attention to the internet, e-strategy and e-boutiques. Many companies doný know what to do with internet or how to deal with it. Its role as a new sales channel is hotly debated, but generally internet is seen as lacking ‘the human factor’ and having ‘no touch and feel’. However, the role of internet will grow: e-boutiques will attract new and younger customers. Also, internet is a tool for information for customers, before they go to a retailer. Retailers will never like e-commerce and will have to be involved, for instance for delivery of watches to customers. Watch forums are important for ‘community building’ and watch brands must have a direct online presence. For pre-owned watches internet is the preferred channel, but there is also a significant unofficial (gray) market which makes regulation of the internet important.

‘Time to change’ is an interesting book for everyone who is interested in the watch industry and where it is heading.