Digital fatigue among consumers has contributed to the recovery of the traditional watch market as they move away from redundant connectivity. Brands such as Swatch, Rolex, Omega and Casio have all seen a recovery, while sales of hybrid watches have declined.
This was one of the main takeaways from the presentation given by Jorge Martin, Head of Fashion Research at Euromonitor, during the recent Asian Watch conference organized earlier this month in collaboration with the 38e Hong Kong Watch and Watch Fair organized by the Hong Kong Trade and Development Board.
“As we see exponential growth in digitization, consumers are looking for a digital balance and there is a need to avoid redundant connectivity. With analog creativity, there is a lot that can be done with traditional timepieces, ”said Martin.
Recognizing the power of digitalization and connectivity, Martin noted that analog watch manufacturers and retailers have tried creative approaches.
One example is slow watches, which use a 24 hour dial. This is in tune with the “slow movement,” while minimalist designs are proving popular these days as well, Martin said.
“Instead of pushing people to always be connected, watchmakers are taking the opposite approach: getting back to basics. This is the case, for example, with Crown and Caliber, a company that sells high-end second-hand watches online, tests and guarantees them to reassure buyers. Another example is Schaffen Watches, a small brand that allows consumers to co-design their own personalized watch, ”he added.
The increased digitization that has connected 4 billion people online not only for communication, but has also seen the Internet of Things (IoT) from homes, cars to traffic lights.
Martin pointed out that there is a downside to these huge changes. This has resulted in passive consumption, as companies use big data and artificial intelligence to predict consumer needs.
“It has resulted in digital detox for a lot of people. For example, a Euromonitor study showed that 25% of consumers say passive internet access adds stress to their lives. As a result, large companies like Apple, Google, and Facebook allow users to actively manage their online access.
In addition, questions have been raised as to whether the connected device is relevant, in terms of addressing unmet consumer needs or adding additional value to the consumer experience; if it does the job for which it was designed; and whether it is user-friendly, in terms of enabling effortless interactivity, for example.
Martin discussed the ever-changing positioning in the smart clothing ecosystem as sportswear manufacturers such as Nike enter the smart tracking market.
“Differentiation allows products to coexist,” he said. “Traditional timepieces offer the time function, while others are mainly fashion oriented. “
Opportunities still abound for smart wearables
According to Philip Wong, vice president (technical) at Movado Group, the last two or three years have seen an increase in smartwatches for children aged 4 to 12 and for the elderly. The number of hybrid smartwatches sold has also increased.
Favorite features of kids’ smartwatches include real-time location monitoring, SOS alerts, proximity break alerts, location history, school attendance tracking and enabling geolocation as protection .
As an example of the future of this segment, Mr. Wong said, “Qualcomm, one of the world’s largest chip suppliers, has developed a chipset for children’s smartwatches that we use in our own. products, selling 25 million units in 2017. “
“Smartwatches for children would be a big part of the IOT smart wearable device market,” he added.
Meanwhile, citing recent market research, Wong said high-income consumers are more interested in hybrid smartwatches than connected smartwatches, which represents a market opportunity for hybrid smartwatches.
“The result is a merger between traditional analog watches and smart connected features using Bluetooth Low Energy (BLE) connectivity,” Wong said. “These watches don’t have as many functions as regular smartwatches, but have a much longer battery life and ‘real’ dials, with watch hands. They usually have basic functions like an activity tracker for health management, notification function, automatic time zone synchronization and remote control.
Market research has shown that consumers also want tracked ECG readings that can provide useful information to their doctor. “The new hybrids are aligned with the expectations and needs of high-income consumers – straightforward and adequate,” he said.
Another advantage of hybrid watches, Wong pointed out, is that the investment cost is lower, although they have additional costs in terms of software development, certification and licensing, and application maintenance. The lower entry cost will encourage more participation in this category of watches, he added.