Nearly one in three consumers (32%) say they want to buy such a watch in the next twelve months, according to the Deloitte 2021 study on the Swiss watch industry.
Pre-owned luxury watches are increasingly in demand: almost one in three consumers (32%) say they want to buy such a watch in the next twelve months. The leaders of watchmaking companies support this trend. Indeed, according to the 2021 Deloitte study on the Swiss watch industry, two-thirds (67%) of them consider that the second-hand market has a positive impact on their brands. When it comes to sustainability, an overwhelming majority (93%) agree that this is a critical issue for the industry. In addition, 72% say they are already investing in more sustainable practices, citing ethical sourcing as a priority. Watchmakers are generally much more optimistic than last year about the economic outlook for the Swiss watch industry: 60% of them expect to achieve the same turnover as before the pandemic by the end next year and see China as their biggest market in the near future.
The Swiss watch industry is clearly on the road to recovery. After a difficult year 2020, marked by a sharp drop in sales due to a reduction in the number of travelers and the closure of certain stores and certain factories, export values rebounded, especially in the high-end sector . Luxury watches with export prices above 3,000 francs have been a lifeline for most watch brands thanks to a seven percentage point increase in the first half of 2021 from levels before the health crisis, according to the export figures of the Fédération Horlogère. Among executives surveyed, 24% expect the Swiss watch industry to return to pre-pandemic sales volumes by the end of this year, while 36% expect an equivalent volume by the end of this year. by the end of 2022, and 25% by the end of 2023.
The importance of China as an export market for Swiss watches became even more evident, especially during the pandemic. During the first confinement imposed in Europe in spring 2020, the share of Swiss watch exports to China more than doubled to 22%. The share of exports to China has since decreased, but it remains 4 points higher in the second quarter of 2021 compared to the second quarter of 2019. Jules Boudrand, expert in the watch industry at Deloitte Switzerland, remarks: “the pandemic served as a accelerator for many trends, including the growing weight of China for the Swiss watch industry. Many brands are adapting to this new reality in which Chinese customers buy more locally due to travel restrictions and are developing strongly in this market ”.
Second-hand market: a way to make luxury brands known to new audiences
Used watches are increasingly popular with consumers. Almost one in three (32%) say they are likely or somewhat likely to buy one in the next twelve months, which is an increase of almost 50% compared to the survey carried out last year. Consumers turn to used watches because of their lower price (44%), the ability to buy a model that is no longer manufactured (31%), for investment purposes (26%) and for more sustainable consumption (25%). The trend is even stronger among younger customers: 42% of Millennials and 34% of Generation Z say they prefer to buy a second-hand luxury watch. Karine Szegedi, Head of Consumer and Fashion & Luxury at Deloitte Switzerland, explains: “Whether it’s the sharing economy or a greater attention to social responsibility issues, today’s young consumers are much less reluctant to buy second-hand items. This generational development will continue to benefit the used watch industry in the years to come and is certainly part of a more global phenomenon in favor of more responsible consumption habits among young people ”.
How likely are you to buy a used luxury wristwatch in the next 12 months?
A large proportion of the managers surveyed (67%) see second-hand watches as an opportunity for new customers to discover their brand or to enter the luxury market in general. Almost two-thirds (65%) of those surveyed are implementing a strategy for the certified second-hand watch market. “The automotive industry has used used vehicle certification for decades. We can only be happy to see the watch industry adopting this practice as well. This will give brands and consumers more guarantees in terms of quality, reliability and authenticity on the second-hand market, ”adds Karine Szegedi. “With more environmentally conscious consumers, the second-hand market is playing a vital role in creating a circular and sustainable approach for the luxury watch industry.”
Sustainable development: companies act in favor of the environment
More than 9 out of 10 executives (93%) say that it is important for their company to take better account of environmental issues. 72% of watch brands invest more in sustainable development and 16% of them plan to do so. Brands are reviewing their business strategies, scrutinizing their complex supply chains, and engaging external service providers to audit and certify their programs. When asked about the most important aspects of sustainability, executives overwhelmingly cited ethical sourcing, the environmental impact of materials and packaging.
As for consumers, an average of 60% said they consider sustainability aspects when buying a watch. Among Millennials, they are 71%. “Consumers are no longer impressed by ethical and sustainable practices, they expect brands to adopt them naturally,” explains Karine Szegedi. “If they want to attract and retain younger customers, brands must clearly explain the measures they are taking to limit their impact on the environment. The Swiss watch industry should see this as an opportunity to further improve its image of an industry that already produces sustainable products that can be passed down from generation to generation ”.