Smartwatches, the younger generation, retail: an overview of the state of the industry with watchmaking consultant and instructor Gianfranco Ritschel, one of the most knowledgeable insiders in the business.

Gianfranco Ritschel had the great good fortune to be born into a family of watchmakers in the Italian-speaking part of Switzerland. These days he is an independent trainer in watchmaking sales and techniques, and his CV is impressive: watchmaker and restorer, for Rolex among others; director of the Swiss market for Piaget; director of Bucherer in Lugano then manager of the company’s watchmaking division (at the time Bucherer was opening shops outside Switzerland and had launched its own Carl F. Bucherer brand); director of the Swiss market for Sowind Group.
Now also a consultant for the Fondation de la Haute Horlogerie (FHH), this polyglot and polymath gives us a frank appraisal of the current state of the watchmaking industry. Interview.

What impact will the smartwatch have on the Swiss watchmaking industry? Will it cause problems for sales personnel trained in traditional watchmaking?

These new products will create an enormous complementary market. It’s a good thing: 50% of people in the United States don’t wear a watch! If smartwatches are sold in the same points of sale as traditional watches, it will be a major challenge for sales staff. Clearly, we could look at setting up specialised training courses, with institutions such as the Fondation de la Haute Horlogerie (FHH). But that is primarily the role of the brands, depending on how it fits in with their strategy. The smartwatch won’t kill Haute Horlogerie: it will help it to mature. For me, it’s similar to the situation created by Swatch in the 1980s: a broadening of minds and a revolution in the perception of this ultimately useless but nevertheless essential object: the watch.

So how does the current generation of customers differ from those of the past?

To put this in context, broadly speaking, 50 years ago anyone interested in buying a watch would first of all look at its durability and reliability; 25 years back, its value as a status symbol was the most important quality. Today, a watch needs to have a cultural and intellectual value with which the client can identify. This is increasingly the case in the more ‘mature’ markets such as Europe. China and the United States are still a long way from this kind of attitude, and much remains to be done to make high-end watches desirable. But perceptions are changing rapidly, particularly in Asia, where watches are increasingly seen as artistic creations.

What are the risks for watchmakers, given these different customer profiles?

Today we are witnessing an ‘arms race’ in terms of materials, which is dangerous. Around 75% of clients are Asian, and what they are increasingly looking for is ‘real’ mechanical watchmaking. They are becoming aware that the use of new and foreign materials in watchmaking, such as silicon, for example, has its limitations, and it runs counter to their expectations of traditional watchmaking. Thankfully, in watchmaking there are no limits to the imagination.
As in art, there is always room for reinterpretation. This creative force is an important catalyst in watchmaking, as much so today as it was in the past. What we think of as ‘traditional’ watchmaking continues to evolve, and makes increasing use of technology, but there are limits of acceptability and these must be respected. And it’s wrong to say, as some people would have you believe, that there is no more room for invention in watchmaking. It’s the same as saying that, since oil paint has already been invented, there can be no new paintings.

Nevertheless, traditional retailers are struggling today with the pressures and constraints placed upon them by the major groups.

Many brands have pulled out of retail outlets in order to manage their retail operations in-house. Some mistakes were made, some people got arrogant and there were abuses. But the reality is that, when boutiques are opened, retailers go out of business. The more robust retailers remain. And sometimes, these retailers benefit from the brand’s increased strength, and achieve better results than before. Those retailers that lose brands, luckily, have the advantage that customers these days are far more willing than they were even ten years ago to look at newcomers, recently established companies and lesser-known brands. An entire generation of watchmakers has been able to exploit this open-mindedness and launch themselves successfully onto the market.

Retailers will never disappear: brands will always need ‘capillary’ distribution to all markets, in addition to their own distribution networks. Relations are certainly more difficult, but retailers who ask themselves “What can I bring to my partner brand?” will always have a future, and a place at the retail table.

Source: Europa Star November 2015 Magazine Issue