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ahsposo
··Most fun screen name at ΩFJust finished this article from the New York Times; apparently some Swiss brands are finding marketing value in increased transparency concerning sourcing of components and materials.
Some highlights:
The Swiss have long had a reputation for being discreet when it comes to business. (Think banks). And their watch industry is no different.
But growing pressure for environmental and ethical accountability — from activists, investors and consumers — has convinced a few brands that it is time to reveal where they obtain some of their raw materials.
They are fighting the industry’s deep-rooted tradition of discretion, a practice born of watchmakers’ fear that identifying suppliers will reveal details of their expertise and give rivals an advantage.
Many, however, are secretive for a very different reason: They are reluctant to admit their “Swiss Made” watches contain numerous components manufactured in China. These aren’t legal concerns: Swiss law dictates that at least 60 percent of the manufacturing costs of a product must be incurred in the country for it to qualify for the label.
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“The real transparency challenge of the watch industry is beyond those important points, the ethics of the supply chain — it is the integrity of Swiss Made,” Jean-Christophe Babin, chief executive of Bulgari, said on a video call earlier this month. “When you find watches at 500 Swiss francs [$530] that claim to be Swiss made with mechanical movements, you can reasonably believe there’s a miracle behind it. Because I’ve never been able to do that, and I am 20 years in the Swiss watch industry.”
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Mr. D’Amore created his own label, called TTO, for Total Transparency on Origin. And Code41 is equally transparent about another sensitive topic: pricing.
On its website, the brand included a table that lists all the components and processes that went into its latest crowdfunded timepiece, the NB24 Chronograph, along with their prices and origins. For instance, the watch’s Swiss-made movement cost the company $1,056 (including taxes), while the titanium case, dial and packaging — manufactured in China — cost $167, $56 and $22. In total, the watch cost $1,474 to produce.
Below the table, the brand explained that it arrived at a retail price of $3,500 by adding what it called a “minimal markup” for profitability.
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Whether they like it or not, Switzerland’s biggest watchmakers may soon have no choice.
In November, Swiss voters rejected the Responsible Business Initiative, a proposal by a civil society coalition that would have required Swiss companies to conduct due diligence on human rights and environmental risks throughout their supply chains, and publicize their reports. But a counterproposal from the Swiss Parliament that would require companies to ensure the traceability of their supply chains, and make their reports publicly available for 10 years, is expected to become law in 2022.
That means even the notoriously tight-lipped Rolex, the world’s biggest brand by sales — a Morgan Stanley report on Swiss watches published last month found that the company now has an estimated market share of 26.8 percent — will need to make its business more transparent.
“They can’t claim they’re a private company because no one’s asking for their trade secrets,” said Milton Pedraza, chief executive of the New York City-based Luxury Institute. “They will have to answer. There’s no place to hide.”
Some highlights:
The Swiss have long had a reputation for being discreet when it comes to business. (Think banks). And their watch industry is no different.
But growing pressure for environmental and ethical accountability — from activists, investors and consumers — has convinced a few brands that it is time to reveal where they obtain some of their raw materials.
They are fighting the industry’s deep-rooted tradition of discretion, a practice born of watchmakers’ fear that identifying suppliers will reveal details of their expertise and give rivals an advantage.
Many, however, are secretive for a very different reason: They are reluctant to admit their “Swiss Made” watches contain numerous components manufactured in China. These aren’t legal concerns: Swiss law dictates that at least 60 percent of the manufacturing costs of a product must be incurred in the country for it to qualify for the label.
*******************************************
“The real transparency challenge of the watch industry is beyond those important points, the ethics of the supply chain — it is the integrity of Swiss Made,” Jean-Christophe Babin, chief executive of Bulgari, said on a video call earlier this month. “When you find watches at 500 Swiss francs [$530] that claim to be Swiss made with mechanical movements, you can reasonably believe there’s a miracle behind it. Because I’ve never been able to do that, and I am 20 years in the Swiss watch industry.”
**********************************************
Mr. D’Amore created his own label, called TTO, for Total Transparency on Origin. And Code41 is equally transparent about another sensitive topic: pricing.
On its website, the brand included a table that lists all the components and processes that went into its latest crowdfunded timepiece, the NB24 Chronograph, along with their prices and origins. For instance, the watch’s Swiss-made movement cost the company $1,056 (including taxes), while the titanium case, dial and packaging — manufactured in China — cost $167, $56 and $22. In total, the watch cost $1,474 to produce.
Below the table, the brand explained that it arrived at a retail price of $3,500 by adding what it called a “minimal markup” for profitability.
*************************************************
Whether they like it or not, Switzerland’s biggest watchmakers may soon have no choice.
In November, Swiss voters rejected the Responsible Business Initiative, a proposal by a civil society coalition that would have required Swiss companies to conduct due diligence on human rights and environmental risks throughout their supply chains, and publicize their reports. But a counterproposal from the Swiss Parliament that would require companies to ensure the traceability of their supply chains, and make their reports publicly available for 10 years, is expected to become law in 2022.
That means even the notoriously tight-lipped Rolex, the world’s biggest brand by sales — a Morgan Stanley report on Swiss watches published last month found that the company now has an estimated market share of 26.8 percent — will need to make its business more transparent.
“They can’t claim they’re a private company because no one’s asking for their trade secrets,” said Milton Pedraza, chief executive of the New York City-based Luxury Institute. “They will have to answer. There’s no place to hide.”
