http://www.ablogtowatch.com/high-end-watch-industry-relevancy/

I wanted to share an interesting article I read today about how watch brands - calls out Omega specifically - is robbing itself of relevancy. I agree and disagree with many of his points. I also like to think that someone from Omega might read this article and our comments in this thread.

- While I partly agree about the negative aspect of recycling designs, the Omega Speedmaster is a classic design. On the other hand I wouldn't mind more innovation. Imagine another Alaska project or Mark watch (that's mechanical not x-33). Not a tribute but the next version.

- I felt that the Speedy Tuesday watch is completely relevant, especially to a millennial. As someone who read fratello every single tuesday it almost felt like that watch was made by one of us for us. It's a shame that I read it after i get into work at 9AM.

 

Very interesting article, I'm not against the recycling of a brilliant design such as the Speedmaster then again simply introducing a model with a different colored face and a higher price is both unimaginative and BS in my humble opinion. The other main issue for the watch market and flat sales in my opinion is pricing, they have priced themselves to high at this point especially for someone who is not in love with watches, for those folks the clock on their phone or the Apple Watch is sufficient. My father always wore omegas all his life, gifts from his parents from graduating university and medical school later he bought newer ones himself - I remember him and maybe it was an ad campaign I don't know describing Omega as the "poor mans Rolex" all the quality for a fraction of the price, now when Omegas are priced in the same range as Rolex that to me is a harder sell unless you truly love watches and the history that Omega has, the historical piece you are wearing.

 

I read the article and it has some good points, but as is so often the case with Ariel Adams, he takes three pages to put across his POV. A better writer could have said the same thing with 50% of the words.

I do think the entry to mid-level luxury watch market (Rolex, Omega, IWC) should not waste energy/effort pitching their marketing to the non-WIS middle class and upper middle class 20-30 demographic.

The high-end jet setters in that age group will look to something like PM/diamonds AP/Hublot as status symbols...though some will probably go beyond the bling and get interested at a deeper level...still a very small group to target if you are producing +500K watches per year.

The middle class and upper middle class 20-30 yr olds in the 1st world traditional markets are having a tough time reaching the same level of disposable income the baby boomers had, and they no longer see a mechanical watch as a necessary object, the smartwatch and cell phone have taken that functional role. So for the non-WIS crowd mechanical watches are now only relevant as status / lifestyle symbols. I cannot see that changing in the future, and I believe that that the main purchase motivation for Rolex, Omega, IWC will still be expression of status / lifestyle.

When today's 25 yr olds reach a higher level of disposable income (+40yrs), they will start looking for something symbolic to represent their "life achievement" (not necessarily financial) and will probably want something classy and iconic...you can see how musical tastes evolve with age as well.

I think it is inevitable that in the long term, the luxury watch market will consolidate, losing the lower end demographic of the under 30s. I would not waste marketing money there. Focus marketing on the +35s worldwide (expand in India/ China for example) and by all means use all the latest digital / social technology to raise awareness for that demographic worldwide, but cut production and consolidate product output to the actual market demand. As men's only portable luxury product that can retain significant value over time, the luxury watch should still be top of mind for future 35yr olds, shopping for an "achievement" symbol.

 

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i think the author is a jackass. Does he think Omega only makes the Speedmaster Moonwatch? Seems like he is advocating change for change's sake, never mind what the consumer wants. I think Omega knows what the people want more than the author. Analog watches are competing with smartphones these days. That's the biggest threat - not sticking with successful designs.

 

Exactly. What is the relevance of a Bentley to me? None, because I'm not in the income bracket to afford one. If I were, they would be more on my radar.

Did luxury watches suddenly become less relevant to the Chinese, who have significantly curtailed they're watch spending over the last two years? No. They have less disposable income.

Luxury items like mechanical watches will always have a market, by both young and old. It's simply an issue of what someone can afford. Very few people who have a boat-load of money don't eventually find something fancy to buy with it.

 

I think that most of the problem isn't Omega's "reverence" for its history but the simple fact that any idea thought up by someone in marketing/design/technology has already made its way into the market.

There is precious little "new" to be seen. Short of a new method of time telling that stimulates us WIS to flock to the respective AD with wads of cash it's just about all done with respect to mechanical watches.

What does Omega do in this instance to differentiate itself from the other manufactures?

 

Many things not to do with watch design, some of which Omega already does.
A recent thread pointed out that Omega treats independent watchmakers with more respect than other companies.
Parts are readily available for decades after model production.
These things make a difference to me, & probably others.

I chose to take my second daughter to a different orthodontist than the first daughter's. The first guy did an excellent job, but his practice management drove me nuts. It's not all about the product.

It makes no sense to stop making a popular product. But that's not a reason to not diversify. And, it's not all about the product.

 

I agree on the design challenge for luxury watch makers. The challenge for the luxury watch industry is that it must reference the past and look to the future at the same time. Heritage / pedigree is and will always be part of the appeal of a luxury watch, but putting out the same watches for all eternity without any design innovation could lead to a stagnant market.

Compared to its immediate Swiss competitors (Rolex, IWC), I do think Omega has actually done more than any other brand to create new designs, new technology and materials: 15.000 gauss, fully ceramic watches, bold colours etc. Actually some would say they are trying too hard and should slow down a little. A luxury watch brand needs a blend of vintage and new designs, I do think with Basel 2017 Omega did a great job mixing both in the right proportion. Biver seems to want to do something similar with Zenith. Seiko invented the Spring Drive, but don't seem to be doing any significant technology innovation right now with Grand Seiko.

The funny thing is that Rolex can put out a Ceramic Daytona or a rumour of a new Coke GMT and people will rave about them (I will never forget that ridiculous interchange between John Mayer and Ben Clymer on Hodinkee with their new Daytonas)...and all that Rolex have done is add a ceramic bezel or change its colour....which shows how much a classic, iconic design is still the main thing the mainstream luxury market is looking for. Rolex was rated the most reputable brand (2016 RI ranking) in the world...so I don't think luxury watches are becoming irrelevant either...people do see the luxury watch as a symbol of something sophisticated that will endure in today's fast paced disposable consumer market. Surely that represents significant emotional value?

Perhaps we are over thinking this ( I know I am): there is simply too much luxury watch product for current demand, the grey market eats away at a brand's value and marketing needs to be modernized. I think RA is fully aware of this and perhaps would even privately like to stop feeding off the grey market via back channels...but with the Hayeks and other shareholders on his back, he might be limited in terms of how far he can invest in preserving and improving Omega's brand equity.

If Omega came out with some bold moves they could shake up the market significantly:

- Invest in setting up a pre-owned e-market place and a buy back policy of your watch for a new Omega, if you bought a new one via the OB every 4 years, perhaps as a VIP club status privilege after +25K in Omega purchases?

- No longer support the grey market and invest millions in readjusting production to demand.

This would all require significant investment and are just examples for fun discussion.

My conclusion: Omega needs to innovate more not in product design or technology, but in the marketing, sales and distribution of luxury watches.

 

Totally agree. There are just so many designs to be had, without variations on a pre-existing theme. And I think they have done a nice job of innovating the technology.

To be frank, the grey market thing pisses me off. I think it de-values the brand, in spite of the fact that I understand why it exists. When I saw that Walmart here had FOIS for sale, I could only shake my head.

 

I thought you were making a joke.

Seriously Shaking My Head

I may have some fun with this and send it to the local OB....

 

hmmm...

 

Amazon also has Rolex, Patek, Omega...you name it. Both Amazon and Walmart are really just working as an e-store shop window for watches sourced from small vendors and other e-commerce sites.

I fully agree that seeing any luxury watch on Walmart is a big turn off in terms of brand image...but if you can't control the distribution of your new products, they will end up for purchase on a low cost mass volume e-store...I imagine how OB staff must feel pissed off, having to compete with a grey market fed indirectly but knowingly by their own brand.

Perhaps delivering from factory some sort of box with a specific code activated "lock" might be in order? You can only "unlock" a new watch with an activation code sent directly by Omega to the end user after purchase at the OB or via their own website. This would mean that OB's would have to keep window shopping stock for users to try out all the models, but it would probably improve sales significantly to compensate that cost, at the same time controlling distribution.

 

Omega could shut off the grey market if they wanted to, but they rely on it too much to do so...

 

Collectors can be soooo fickle. One minute they are all over a brand for "recycling past designs" when they do something familiar, and the next all over the same brand for "forgetting their heritage" when they do something different.

I've lost track of how many times the Rolex/Omega comparison has come down to how iconic the Sub is for example, because Rolex "stayed true" to their heritage, and through that built up the iconic status of that model. Then Omega changes the Seamaster diver faster than some change their underwear, and people complain that it can never be iconic because they change it so often. There is no right answer here that will please everyone folks.

Not picking on @dsio in particular here, just a very familiar refrain. Pardon my interruption, and let the navel gazing continue...

 

You are 100% correct Al...and indeed some of us rant and rave here on the OF about the bloody grey market, but it seems Omega has not yet woken up to the long term damage they are doing to the brand, especially now they have made the move to go upmarket with Rolex as their apparent target.

If Omega were still aiming to be at the Tudor/Tag/Breitling level...well I would see less damage in flooding the grey market, but if your main competitor (Rolex) can control distribution still using ADs and thus indirectly the post sales value of their watches (which is a key component of their brand equity)...how the hell do Omega hope to compete with their OBs? Or I suppose the OBs are indeed just marketing and relationship show rooms?

 

@walmart

I'm already fustrated with the substantial price increases seen at the OB. But I get they want to bring the brand up a few notches and that they are also delivering some quality product and designs.

But freaking seeing Omega being sold at Walmart and Costco. This only further makes me want to transition to another brand. I was already thinking about doing so given the price points.

I'm off to Walmart to go buy a Speedmaster.

 

Three pages... and I still have no idea what point he was trying to make.

Elevator pitch - 30 seconds... go!