While other segments record a decline, the online interest for brands active in Haute Horlogerie is surging all over the world, except in… Switzerland. China remains the top country on the list, with almost half of all searches originating from the country.

It feels like there is a bit of a craftsmanship renaissance going on in the world of luxury. One reaching far beyond the post-crisis brand-driven marketing campaigns, one firmly led by a new group of sharper, savvier luxury consumers.

Consumers have never asked so many questions of luxury brands, wanting to know what - more than ever - makes these ‘exceptional’ products so ‘exceptional’.

Consumers have never asked so many questions of luxury brands, wanting to know what - more than ever - makes these ‘exceptional’ products so ‘exceptional’. And whilst such a hard line of questioning is undoubtedly leading to a drop in sales for some less fortunate brands, it’s the perfect time for the watch industry, particularly Haute Horlogerie, to shine.

WORLD WATCH REPORT Q3 2014
According to Digital Luxury Group’s WorldWatchReport, overall online interest in luxury watches advanced by 4% in Q3 2014, when compared to the same period in 2013. Definitively leading this increase was the Haute Horlogerie category, where interest surged by 16% year on year. The 18 brands tracked in this particular category now capture 16% of global online searches for luxury watches.
“We have witnessed an explosion in terms of interest and awareness on five continents,” Aurel Bacs recently confirmed to Luxury Society, discussing the overall health of the Haute Horlogerie sector. “Today, awareness of fine watches has grown beyond our wildest expectations.”

GEOGRAPHICAL MARKETS
Despite many of the financial barriers associated with becoming a serious collector of Haute Horlogerie, interest in the category and its ‘star’ brands continues to grow around the world at a rapid rate. Most interestingly, search volume increased at the fastest rate in Brazil in Q3 2014, advancing by 32% in just twelve months.
The lion’s share of searches related to Haute Horlogerie originated in China, which commanded a whopping 45% of all such queries. Despite whispers of a sales slowdown on the Mainland, linked to nationwide anti graft measures, online consumer interest increased by 21% in Q3 2014 compared with Q3 2013.

The lion’s share of searches related to Haute Horlogerie originated in China, which commanded a whopping 45% of all such queries.

Searches for Haute Horlogerie brands originating in Hong Kong were down 23%, suggesting a potential cooling of one of the world’s most important markets. The decrease in search volume cannot be categorically linked with the Occupy Central protests, but as the movement has severely impacted luxury sales in the territory and restricted inbound tourist traffic, it is possible that it is influencing interest in high-end luxury goods.

Online interest also dropped in Thailand to roughly the same degree (-24%) as Singapore, which also experienced a decline of 19%. Across the board in countries such as Mexico, Qatar, Taiwan, Saudi Arabia and the United Arab Emirates, online interest in Haute Horlogerie remained reasonably stable, increasing or decreasing by no more than 3%.

Despite a relatively flat outlook for European economies, searches in Italy increased by a respectable 28%, followed by the United Kingdom (+20%) and France (+18%), ahead of Germany (+13%). In line with more optimistic forecasts for the North American and Japanese luxury markets in 2014, search interest increased by 15% and 20% in each country respectively.

HH VS ‘LUXURY’ WATCHES
Ironically, the only market to register a decline in search volumes for the Haute Horlogerie category was Switzerland (-6% on Q3 2013). Despite this dip in interest on home soil, Haute Horlogerie is globally on the move. And its 16% leap in interest shines even brighter when compared to a decline in search volume within two key categories.

First, interest in Couture watches - those made by brands with their original roots in fashion or fine jewellery – dropped by a significant 10% (compared to the same period in 2013). Second, searches for brands in the High Range category – below Haute Horlogerie, above Prestige – experienced a 7% drop.

Ironically, the only market to register a decline in search volumes for the Haute Horlogerie category was Switzerland (-6% on Q3 2013).

Depending on how sensational one wishes to be, these simultaneous declines in online consumer interest could reflect two greater industry trends. One is that luxury consumers are increasingly looking for pure players, fatigued by brands trying to be everything to everyone. Another is that the ‘middle’ market for luxury is indeed in danger, as consumers increasingly refuse to spend their money on anything less than exceptional.

As we can see by the 6% increase in the Prestige category – which already accounts for 55% of all online interest - the world is still intrigued by the idea of ‘luxury’ but is equally as concerned by the notion of ‘value’. Today, consumers will buy either the exceptional or the functional, with less and less interest in the products that constitute the middle.

Today, consumers will buy either the exceptional or the functional, with less and less interest in the products that constitute the middle.

Consumers will no longer be fooled into thinking that a product is indeed a luxury item because it has the name of a big scale brand sprawled across it. This is not to say that the market will reject the category expansions of fashion branded watches, or car branded homewares, but at the very least there must be a logical and authentic reason as to why these products exist.

In the information age, luxury has become much more about understanding and knowing, than it has about status or showing. Luxury can be found in knowing the history of the brand you choose to wear on your wrist and understanding what makes it special. It can be in the understanding of complicated mechanical timepieces, or in the joy of knowing that brands such as Voutilainen even exist.

MOST SEARCHED FOR HAUTE HORLOGERIE BRANDS
Overall, the category is incredibly well positioned to thrive in the shift from owning to experiencing luxury. Of the 18 brands tracked in the Haute Horlogerie category in the WorldWatchReport, almost every single one is a pure player in the watchmaking space. Many have histories spanning decades and both protecting and communicating their savoir-faire.

Perhaps it is without surprise that the WorldWatchReport confirms that Patek Philippe is the most-searched-for Haute Horlogerie brand on a global scale, capturing 29% of searches within the category in Q3 2014. Vacheron Constantin ranked #2 with 18% share-of-search, as Audemars Piguet came in third, commanding 12%. Jaeger-LeCoultre and Franck Muller rounded out the Top 5.

Interest in the top three brands remained robust if not impressive, as they all placed in the Top 10 again when ranked by growth in online search interest. Vacheron Constantin ranked #3 across all Haute Horlogerie brands, as searches increased by 34% in Q3 2014 compared to the same period in the previous year. Audemars Piguet ranked #5 registering a 21% increase, slightly ahead of Patek Philippe (#8) which increased by 18%.
This continued interest in these particular brands is no doubt a combination of both new models and record-breaking sales at auction. It is also important to remember that Patek Philippe celebrated its 175th anniversary in 2014, with campaigns likely to spark significant online buzz.

Perhaps it is without surprise that the WorldWatchReport confirms that Patek Philippe is the most-searched-for Haute Horlogerie brand on a global scale, capturing 29% of searches within the category in Q3 2014.

What is exciting to see is an increase in the acceleration of newer brands such as Richard Mille (#2) and Greubel Forsey (#4), where search volume surged by 35% and 32% respectively in just one year – almost on par with that of Vacheron Constantin.

Granted they are starting from a comparatively miniscule base, accounting for a much smaller share of search, but given the number of pieces produced by Greubel Forsey each year (approximately 100) such an increase remains significant. The brand has perhaps also benefited from additional interest surrounding its 10th anniversary.

Building interest in Richard Mille could also be attributed to a mix of models and column inches, as rumours continued to circulate throughout 2014 that Kering would take a majority stake, as the French conglomerate continued to restructure and bolster its Watch and Jewellery Division. The brand was involved in several golf, car racing and film industry events over the European summer. It also opened its first UK boutique on Mount Street in September.

FAST MOVERS
Despite progress from many brands, the star performer of Q3 2014 was undoubtedly Parmigiani, despite the fact it captures less than 1% of all Haute Horlogerie searches. Search intentions on a global level increased by 65% when compared to Q3 2013, fuelled by massive surges in online interest originating in the United Kingdom (+295%), Brazil (+70%) and Germany (+77%).

Though it is difficult to pinpoint the exact catalyst for such dramatic increases, one cannot ignore a global increase in brand publicity in mid-September, related to a scandal surrounding Parmigiani’s involvement in the 2014 FIFA World Cup. Parmigiani watches were distributed in gift bags from the Brazilian football federation in June to the 28 members of FIFA’s executive committee during the summer’s tournament. FIFA’s ethics committee eventually decided that was a breach of the organisation’s code of ethics and asked officials to return the watches.

This incident could help to explain such huge shifts from ‘football mad’ nations such as the U.K., Brazil, Germany and France. Football controversy aside, online interest in the brand is still largely derived from China, which accounted for 23% of all searches, followed by the United States (18%) and the aforementioned United Kingdom.

Parmigiani watches were distributed in gift bags from the Brazilian football federation in June to the 28 members of FIFA’s executive committee during the summer’s tournament. FIFA’s ethics committee eventually decided that was a breach of the organisation’s code of ethics and asked officials to return the watches.

A spotlight on Richard Mille’s online desirability paints a different picture, where exactly one quarter of all search intentions in Q3 2014 originated in the United States. France (13%) and the United Kingdom (12%) account for the second and third-largest search volumes respectively, trailed by China (11%) and Japan (14%).

Somewhat surprisingly, the biggest increases in interest came from Italy (+120%) and once again from Brazil (+92%), which generally appears to be a country increasingly fascinated by Haute Horlogerie.

THE MOST SEARCHED FOR MODELS
The story changes yet again when we dice the DemandTracker data by searches for specific models. Here we find no mention of Vacheron Constantin, nor Richard Mille or Greubel Forsey. When evaluating the Q3 2014 search volumes, it is the Audemars Piguet Royal Oak that registers the most queries globally, followed by the Royal Oak Offshore and Patek Philippe’s Nautilus.

Indeed Patek Philippe is the most represented brand in the Top 10, with the Nautilus at #3, the Calatrava at #6 and the Sky Moon Tourbillon entering for the first time (#10). Jaeger-LeCoultre’s Master (#4) and Reverso (#5) both dropped one place each compared to Q3 2013, making way for the increase of Patek Phillippe’s Nautilus.

Looking exclusively at the Top 5 most-searched-for Haute Horlogerie models, the results suggest that consumers are still looking for trusted products from trusted brands: authentic pure-play brands with longstanding watchmaking legacies and a reputation for excellence in product, service and after-sale value appreciation. This is by no means to say there is no room for new Haute Horlogerie brands, nor that Couture watch brands will not be successful. In both these categories it is a case of building legacy and legitimacy in the field, as opposed to crafting a marketing message. The nomination of Louis Vuitton in 2014’s Grand Prix d’Horlogerie de Geneve, in the category of Women’s complications, is a sign that this can be achieved.

Looking exclusively at the Top 5 most-searched-for Haute Horlogerie models, the results suggest that consumers are still looking for trusted products from trusted brands.

But what is applicable to all brands trying their hand at Haute Horlogerie is that consumers will continue to demand the best; the best quality, innovation, experiences and service. To compete in an increasingly saturated marketplace across all levels, brands must have crystal clear identities and a razor sharp value proposition for consumers. Lucky for some, the majority of Haute Horlogerie brands are sitting pretty in this position.

Source: Europa Star December - January 2015 Magazine Issue