The smart watch is already having an effect on the watch industry. At first, the Swiss watch companies brushed off as a passing fad but now they are realizing that it is a trend that is here to stay. According to research, Swiss watch exports are down year-to-date and the more moderate fashion watch business is off several percentage point from where it was trending the last few years. Tag Heuer Pioneers a Swiss Smartwatch On Monday 9 November, Tag Heuer unveiled its new Connected smartwatch developed in conjunction with Intel Corp. and Google. making Tag Heuer the first Swiss watch company to take on Apple and jump into the smartwatch category. Critically, it isn’t trying to avoid being a watch. “The biggest challenge was to make a connected watch that didn’t look like a connected watch,” said Jean-Claude Biver, president of the watch division of LVMH Moët Hennessy Louis Vuitton and chief executive officer of Tag Heuer. Bivan called Tag Heuer’s version "the first that’s not discernible as a piece of technology". Powered by the Android Wear operating system and Intel processors, the TAG is built like a watch, with a lightweight titanium case and a rubber strap that comes in various different colours. As with most high-end watches, there are Tag logos on the crown and the clasp on the band — small details that matter to true watch fans. TAG’s goal is to stay in the game as smartphones become more popular while simultaneously tapping the ambivalence that luxury watch enthusiasts have for wearable tech. But what about the rest? If you can't beat them, join them! Smart companies should be jumping on the bandwagon and capitalizing on the smart watch trend by thinking about the following ideas:
- Creating a smart watch platform with motion-tracking software (for luxury brands).
- Adding Fitbit-like activity trackers (luxury brands and fashion watch brands).
- Adding Apple-like smart details that look like the authentic smart watches (fashion watch and mass watch brands).
- Focusing on new and innovative materials like quartz, from the 60’s, or new designs (all brands). Differentiation is key.
- Adding a sports line extension capitalizing on the smart watch business with a separate product, packaging, branding, and marketing, while keeping in sync with the master brand’s sensibility.
- Maintaining prices with the added features, particularly in the fashion watch and price sensitive mass watch brands. The luxury customer will pay for the added features and benefits of a smart watch.
Case in point: When chronograph watches were the big trend over the last few years, I was consulting with a moderate fashion watch company with many brands. Most of the brands could not afford real chronographs parts based on the pricing and the price resistance to the demographics the brands targeted. After speaking to buyers and customers, we realized that the customer would rather have the “look” of a chronograph, but did not necessarily care if it actually functioned. So, we incorporated the customer’s feedback and created fashion chronograph watches to appeal to this broad market and increased revenue +12%.