Zurich - A bigger threat than smartwatches is no watches at all, according to Omega President Stephen Urquhart.
The maker of luxury watches - some tied to the James Bond movie franchise - that sell on average for more than $6 000 is trying to attract younger consumers. More than half of 16- to 34-year-olds use a mobile phone as their main way to tell the time, according to a Yougov poll.
“For me, that’s a bigger challenge than smartwatches: to make sure that we are reaching out to them for a product that has this image of being their parents’ sort of world,” Urquhart said in an interview in Zurich.
Swiss watchmakers already face a growing list of challenges: a three-year crackdown in China on extravagant spending, the surge in the Swiss franc, and competition from newcomer Apple’s smartwatch. Attracting younger clients is a key part of the strategy of the company, which is owned by Swatch Group AG.
The watchmaker selected Eddie Redmayne, a 33-year-old Oscar-winning actor, as a brand ambassador in May to join George Clooney, who is 54, and Nicole Kidman, 48. Omega’s affiliation with the James Bond franchise, for which it’s selling two limited editions this year, also helps as the 007 agent appeals to millennials even though the franchise is six decades old, Urquhart said.
Official timekeeper
Omega hasn’t shut the door to the idea of adding electronic functions to its watches, possibly in models tied to the Bond or the Olympics, for which it is the official timekeeper, Urquhart said. In the spy movies, the brand’s watches feature gadgets such as grappling hooks and detonator pins.
“The population is ageing, but that’s not the consumer we’re looking for, we’ve covered it,” the 69-year-old Urquhart said in the October 14 interview. “To change someone’s mindset when they’re 70 or 80 is more difficult. If they like watches, they like watches. If they don’t, I’m not sure we’re going to change that.”
In that sense, Asia is a strategic market as buyers there tend to be younger, often between 25 and 45, and the watchmaker aims to try to find loyal clients in that age group. Greater China is the biggest import market for Swiss watches, receiving about one quarter of the timepieces Switzerland produces.
Limited editions
Omega is putting more than 140 million Swiss francs ($146 million) of James Bond watches up for sale this year, based on the number being sold and their recommended retail price. The Biel, Switzerland-based company unveiled a 6 600 Swiss-franc Seamaster Aqua Terra in March and began selling a 6 800 franc Seamaster 300 last month, both limited editions tied to the 007 franchise.
Omega has been featured in James Bond movies ever since Pierce Brosnan wore the Seamaster Diver 300 in the 1995 film GoldenEye, bumping out other brands such as Rolex, Seiko and Breitling, which appeared in previous movies. Spectre, the 24th Bond film, will debut in UK cinemas October 26, and follows Skyfall, whose box office sales surpassed $1 billion.
Omega had sales of about 2.3 billion francs in 2014, more than a quarter of Swatch Group’s total revenue, Alessandro Migliorini, an analyst at Mirabaud Securities, estimates. Analysts expect sales at Swatch Group, whose products include $50 Swatches and well as six-figure Breguets, will rise about 1 percent this year, the slowest pace since the financial crisis.
* With assistance from Jan Schwalbe in Zurich and Benedikt Kammel in Berlin
BLOOMBERG