Digital fatigue among consumers has contributed to the recovery of traditional watch market as they step away from redundant connectivity. Brands such as Swatch, Rolex, Omega and Casio have all seen a recovery, while sales of hybrid watches have been declining.
This was one of the key takeaways of the presentation given by Jorge Martin, head of fashion research at Euromonitor, during the recently-concluded Asian Watch Conference hosted early this month in conjunction with the 38th Hong Kong Watch & Clock Fair organised by the Hong Kong Trade and Development Council.
“While we are seeing exponential growth in digitalisation, consumers seek digital balance, and that there is a need to avoid redundant connectivity. Through analogue creativity, there are a lot of things that can be done with traditional timepieces,” Martin said.
Aware of the power of digitisation and connectivity Martin noted that analogue watch manufacturers and retailers have been trying creative approaches.
One example is slow watches, which use a 24-hour dial. This is in-sync with the “slow movement”, while minimalistic designs are also proving popular these days, Martin said.
“Instead of pushing people to always be connected, watch manufacturers are taking the opposite approach – going back to the basics. One example is Crown and Caliber, a company that sells pre-owned premium watches online, and tests and guarantees them to reassure buyers. Another example is Schaffen Watches, a small brand that allows consumers to co-design their own personalised watch,” he added.
The increased digitisation that has connected 4 billion people online not only for communication, but it has also seen the Internet of Things (IoT) from homes, cars to traffic lights.
Martin pointed out there is a downside to these enormous changes. It has resulted in passive consumption, as businesses use big data and artificial intelligence to predict what consumers need.
“It has resulted in a digital detox for many people. For example, Euromonitor research showed 25% of consumers say passive access to the Internet adds stress to their lives. As a result, big companies like Apple, Google and Facebook are enabling users to actively manage their online access.”
Furthermore, questions have been raised whether the connected device is relevant, in terms of addressing unmet consumer needs or adding extra value to the consumer experience; whether it does the job it was designed to do; and whether it is user-friendly, in terms of allowing effortless interactivity, for example.
Martin discussed the ever-changing positioning in the smart wearables ecosystem, as sportswear manufacturers such as Nike enter the smart-tracking market.
“Differentiation allows product cohabitation,” he said. “Traditional timepieces offer the time function, while the others are mainly fashion-oriented.”
Opportunities still abound for smart wearable
According to Philip Wong, vice-president (technical) at the Movado Group, the past two to three years had seen an increase in connected watches for children aged four to 12 and for the elderly. There has also been a rise in the number of hybrid smart watches sold.
The preferred functions of smart watches for children include real-time location monitoring, SOS alerts, proximity break alerts, location history, school attendance tracking, and geofence-enabling as a safeguard.
As an example of the future for this segment, Mr Wong said: “Qualcomm, one of the biggest chipset providers in the world, has developed a chipset for kids’ smart watches that we use in our own products, selling 25 million units in 2017.”
“Smart watches for children would form a big part of the IOT smart wearables market,” he added.
Meanwhile, citing recent market research, Wong said high-income consumers were more interested in hybrid smart watches than smart connected watches – presenting a market opportunity for hybrid smart watches.
“This is resulting in a fusion between traditional analogue watches and smart connected features using Bluetooth Low Energy (BLE) connectivity,” Wong said. “These watches do not have as many functions as regular smart watches, but have a much longer battery life and ‘real’ dials, with watch hands. They generally have basic functions, such as an activity tracker, for health management, a notification function, automatic time-zone synchronisation and remote control.”
Market research showed that consumers also want an ECG measurement tracker that can provide useful information for their doctor. “The new hybrids are aligned with the expectations and needs of upper-income consumers – simple and adequate,” he said.
An additional benefit of hybrid watches, Wong pointed out, is that the investment cost is lower, although they do have additional costs in terms of software development, certification and licensing, and app maintenance. The lower entry cost will encourage greater participation in this watch category, he added.