Now that we’ve had some time to let it settle in, we’d like to take a deeper look at the surprisingly optimistic occasion that was Watches & Wonders Geneva 2023. From late March to early April, members of the luxury watch industry flocked to Geneva, Switzerland to meet with about 50 brands at the official Watches & Wonders events, along with perhaps as many other brands displaying at various venues around the city. Much of this activity in years past would occur at two times of the year: Geneva for SIHH and then again in late March in Basel, Switzerland for Baselworld. That all ended during the pandemic, and to make a long story short, most major parts of SIHH and Baselworld have now consolidated to become Watches & Wonders Geneva. The debut event was in 2022 (read my show recap here), making 2023 the follow-up year and the best Watches & Wonders Geneva ever!

Practically speaking, a tradeshow is a very complicated thing to arrange. There are tons of moving parts and so many things that need to go right for it to work (you can check out our two-part conversation with the man in charge, Mathieu Humair here and here). Just two years into Watches & Wonders Geneva, it is not wise to expect the concept to be entirely fleshed out yet. That said, the show was remarkably fluid in its operation, with most facilities being widely used. Watches & Wonders even expanded to allow in more brands and zones, including more places for people to sit down and have a meal, as well as more educational and cultural displays in addition to the exhibiting watch brand booths.

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Photo courtesy of the Watches and Wonders Geneva Foundation

More important is that people were in a good mood. Often a very good mood, which is rather remarkable if you think of the context of the show. Many people coming to the show were delayed or had luggage mishandled because of ongoing labor strikes in surrounding parts of Europe that have greatly affected air travel. The months leading up to Watches & Wonders Geneva starting in December 2022 saw mostly sharp declines in consumer behavior for a variety of reasons that have to do with there being less disposable income in the hands of consumers available for watch purchases. This means that retailers came in with tepid levels of enthusiasm given the larger context of economic uncertainty in a world where mention of “recession” is common among both business people and politicians. Next is the not-too-distant war in Ukraine which has not only upended global order but has paralyzed important traditional luxury watch markets. Luxury purchasing among mainstream consumers tends to occur in stable, peaceful times, so ongoing global military conflicts tend to cause more worry than reasons for celebration. Finally, uncertainty exists with both economic and political outlooks for China, which is a very important market for many luxury watchmakers. Over the last decade, many watchmakers have relied upon luxury consumption in China for sizeable chunks of their business. Most people report that performance in many parts of China has looked like a roller coaster over the last few years, with little known about the future. More importantly, perhaps, is how China’s political elite seems unconcerned about how a variety of government decisions can affect consumer purchasing habits and the comfort level of doing business in China.

Speaking of China, Watches & Wonders 2023 saw the triumphant return of Chinese and other Asian guests who were not able to come in 2022 due to restrictive travel measures. Also returning to the show was traditional disregard for communicable diseases and tight spaces with what North Americans tend to agree isn’t enough airflow. Watches & Wonders Geneva grew significantly for 2023 but you can see that there are a lot of efforts not to indulge in some of the bloat that made past tradeshows onerously expensive. It isn’t that exhibiting at Watches & Wonders Geneva is cheap, but rather that across the board (at least on the Richemont brand side) you can see that lavishly designed and appointed booths are somewhat a thing of the past. Brands are being more economically efficient given that they all recognize their marketing and communication dollars need to be spread out in many ways over the year and that no one event like Watches & Wonders can command too large a portion of their annual budgets.

Even though 2023 started with modest consumer performance (or downright poor performance in many places), the watch industry as a whole is still coming off of a very successful 2022 and years before it. A lot of independent watch brands have record sales and order books are filled for at least a couple of years. Their primary priority isn’t to think about the future but rather to fill immediate orders by producing watches. This is a good problem to have, but it can also cripple many smaller brands that invest so much time into filling orders that they aren’t innovating, communicating, developing, relating, or marketing. Thus, what tends to happen is that after these periods of impressive orders and business normally tones down, brands are left exposed because of poor residual marketing momentum and existing fans whose last memory of the brand was that they probably had to wait a really long time for their timepiece to be delivered. Smaller watch brands are particularly vulnerable to putting too much of their focus in narrow areas and not tending to all important parts of the business just a bit. A better approach is to think long-term and reserve some time and team member energy to areas such as product development and communication. The takeaway message here is that in addition to often being understaffed, many watch brands are persistently guilty of being too short-term in their efforts and planning. Despite the impulse to do the opposite, the best parts of the watch industry have thrived because of their long-term approach to problem solving and brand building.

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Photo courtesy of the Watches and Wonders Geneva Foundation

At Watches & Wonders Geneva 2023, many participants found common ground by facing some of the same business challenges together. In a lot of ways, I’ve never seen the watch industry less competitive with itself than now. What I believe is happening is that rather than watch brands seeing each other purely as competition in the space, they are seeing allies who can help them in the same fight. This leads me to an interesting discussion of how some of the character traits of many watch brands that I normally criticize have, in times of stress, probably helped the watch industry. For example, I constantly talk about how brands need to participate in more activity to thrive in today’s market. They have a tendency to close up and wind down operations to a bare minimum when they feel market conditions are not suitable for growth. This behavior can be thought of as a brand hibernating or pulling its head into its shell like a turtle. What this tendency has probably also helped with is keeping a fair number of brands alive through challenging periods over the years. If you look at the larger history of the watch industry, even some of today’s big brands have wound down operations during times of economic uncertainty. Sometimes, those brands have entirely ceased operations for years. The tendency of watch brands to be highly cautious with the ability to nearly completely wind down operations has probably helped them to survive in the longer term even if there is still an epidemic of watch brands failing to notice and capture growth and expansion opportunities.

Another tendency is for watch brands is to play “follow the leader.” This is probably the most interesting behavior that is helping the watch industry to survive in 2023, and beyond. While brand managers often talk about innovation and independence, the reality is that most brands do not feel comfortable taking action until one of their colleague brands does the same thing and is successful at it. In good times, this has made the watch industry painfully boring to cover as media because brands just seem to follow the decisions made by other brands. In bad economic times or periods of market uncertainly, this behavior can take on a different role.

There are a number of serious challenges the watch industry faces, such as how to market in an era with nearly infinite advertising opportunities, what regional markets to choose for growth, what types of products to focus on, and what types of brand messages to promote in a time of changing social conventions. In some industries, brands would all be trying to figure out answers to these questions on their own, at least to a degree. In the watch industry, most brands will not have sufficient confidence to make such strategic decisions on their own and will look to their colleagues for evidence on what types of decisions might be successful. There are a large number of systemic problems with this approach but it does have one benefit:  If just one or two brands figure out how to overcome a particular business challenge, other brands will quickly follow in their steps.

This tendency combined with a culture of caution and conservation, allows the watch industry to work together to adopt new best practices and manners of dealing with complex market conditions. The system isn’t perfect in that brands can at times blindly follow one another off cliffs like herd animals of limited intelligence, but when it this propensity for “following the leader” works, it means that many brands can adopt successful practices relatively quickly. That behavior is needed in a time when a large number of watch industry questions about how it will operating in the future need to be answered. Most of these questions today relate to operation strategies such as what areas of the business to invest money and what regions of the world or distribution channels make the most sense for sustained business growth.

Talk of e-commerce and direct-to-consumer sales were nearly absent at Watches & Wonders Geneva 2023. While many brands do sell watches directly, the focus this year seems to be resolutely on the traditional distribution means of using either third-party retailers or brand-labeled boutiques. Watch brands are pulling their hats out of the ring when it comes to handling e-commerce themselves and recognizing that it takes a lot of work to sell watches via their websites to consumers. What brands are realizing instead is that, today, consumers learn about watch brands and models online, and generally become (and stay) watch enthusiasts through participation with websites like aBlogtoWatch and other enthusiast communities. Their purchases however can often happen off-line in the real world or through less direct means than just buying a new wristwatch at retail price from an online shop. Perhaps a larger issue is that places to buy watches online are becoming overly plentiful. In at least the United States and Europe, there are arguably too many options when it comes to where to purchase a new or used watch. We know that too many options can (and do) lead to consumer choice paralysis, but a successful eco-system for many brands when it comes to selling watches online has yet to materialize. This means that watch brands are heavily leaning on investment from third-party retailers who purchases watch products in bulk via wholesale, or on developing mono-brand boutiques in a particular geographic region and slowly establishing a foothold there so that relationships with customers can turn into ongoing business over time.

On the product side, many of the new releases at Watches & Wonders Geneva 2023 were qualitatively very good. That means high-quality watches with commercially acceptable designs and trendy personalities. Some brands only launched one watch with others complaining that it is still too confusing for them to know how and when to release watches over the year. There is also an ongoing understanding that much of the actual commercial sales with retailers happen in private outside of the show, so Watches & Wonders Geneva is increasingly a networking event and one for brands to meet with media. Thus, debuting more, not fewer products at Watches & Wonders (even under embargo) is probably a wise idea for many companies.

New products from most brands felt like extensions of what they know the market will purchase from them. That means 2023 saw a lot of line extensions, evolutions on existing models, and trend colors, materials, and design directions that have been validated by the market. There is little expensive risk taking or the development of truly new or innovative ideas. Again, this behavior doesn’t happen too much during the cautious times the watch industry is very much living in, given the larger context of economic and political uncertainly around the world.

The positive backdrop to all of this is sustained consumer interest in watches and the near logic-defying popularity of luxury watches. Thanks the increasing interest of people with money to show they have it, along with the popularity of wristwatches in popular culture, the luxury watch industry enjoys strong demand in many parts of the world. This is the really good news that is responsible for the growth and optimism that exists right now, and, provided the watch industry can keep things exciting, will benefit the larger group of companies who make high-end watches for people like how wearing ornamental tools makes them feel. This strong emotion is what keeps the luxury watch industry going and it is alive and well in the market.

Watches and Wonders 2023 RecapThe next few years will see more stability in the markets along with the larger groups developing more strategies and practices to do business today and in the future. This will lower the sense of caution that lingers at many brands and help usher in much of the product development and excitement many of us rely on to keep interested in the industry. A light of hope for example is how a lot of brands are coming out with futuristic designs (or at least contemporary ones). In 2020 I wrote about how social moods have a direct impact on whether or not consumer want futuristic or historic-looking wrist watches. While conservative watches will always have a place in the market, I was excited to see some really forward-thinking concepts at Watches & Wonders Geneva 2023, that aBlogtoWatch will cover in more detail separately. Leaving Watches & Wonder Geneva 2023 left us all with an optimistic feeling and while many unknowns exists over the next months and years, there is the general feeling that the world of tomorrow will very much still watch luxury mechanical status symbols. Now, they just need to sort out remaining supply chain issues so that all of those watches can be manufactured.

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