Recalibrating for the future
The Deloitte Swiss Watch Industry Study 2022
The Swiss watch industry comprises and supports a complex ecosystem, and its future success depends on respecting its heritage while embracing the possibilities that lie ahead. With its longevity and innovative mindset, coupled with its spirit and passion, the Swiss watch industry has all the components it needs to successfully recalibrate for the future.
This ninth edition of the Deloitte Swiss Watch Industry Study is based on an online survey of 70 senior executives, interviews with industry experts and an online survey of 5,579 consumers in the home market and top export markets for Swiss watches: China, France, Germany, Hong Kong, Italy, Japan, Singapore, Switzerland, the United Arab Emirates, the United Kingdom and the United States.
63% of industry executives think offline sales will still dominate over the next five years, yet the share of e-commerce sales continues to grow.
Hover over one of the watch segments to find out more
Nothing secondary about the secondary market
By 2030, we estimate that the pre-owned market is likely to grow to CHF 35 billion and make up more than half of the primary market. This growth should be supported by brands launching new pre-owned offerings, the expansion of existing channels and consumers looking for discounted and discontinued timepieces.
Online continues to shine
We believe the share of watches bought online will likely increase to 30% by 2030 from roughly half that now. Although 63% of industry executives think offline sales will still dominate over the next five years, e-commerce sales continue to grow, and nearly half of Millennials and Gen Z prefer online shopping to in-store.
The land of opportunity
The US is the most important market for the Swiss watch industry for the second year in a row, taking in the highest share of exported watches. Growth is being driven by strong e-commerce behaviour, a surge in retailing options, both online and in-store, and a growing affinity for value-appreciating premium timepieces.
ESG or Look at me?
Brand image or sustainability, which is most important? Consumers are split equally between those who value sustainability and those who don’t care provided they like a watch, with a smaller proportion prizing brand image. Millennials and Gen Z place more importance on a timepiece’s sustainability credentials.
Show me the money
23% of consumers purchase a watch for investment or resale. Consumers, mainly in Asia, recognise the money-making potential of watches and are motivated by higher resale prices or portfolio diversification. Speculation is seen as more important than familial succession.
Immersed in the metaverse
57% of brands are planning to launch a non-fungible token (NFT) within the next year primarily as a digital twin, for certification purposes and to accessorise in the metaverse. Although 40% of consumers are interested in NFTs, mostly for their investment potential, 31% still don’t understand this virtual asset.
Watches are a girl’s new friend
Timepieces are a matter of taste, not gender. Yet 44% of females prefer female-specific designs while 26% favour unisex options. Nearly half of brands are expanding their range of designs tailored to females and one-third are looking to offer female-friendly sizes. Brands see a bright future with female buyers.
Owning a watch has become more important to every third Millennial and Gen Z, and it’s not just smartwatches. Younger consumers prefer to purchase online and have a penchant for pre-owned due to price sensitivity and sustainability. Good news for the industry: watches are not out of style.
Geographical growth prospects
Top 5 risks for the next 12 months
Top 5 business priorities for the next 12 months
Supply vs demand
Most important aspect of sustainability
Geographical growth prospects
Growth expectations globally differ considerably. Hong Kong is expected to further decline or stagnate and China is mixed, with 57% expecting growth and 31% stagnation. The outlook for the rest of Asia is strong, as it is for the Middle East, while Europe is mixed. The picture is more upbeat in North America: 26% of respondents expect strong growth with 51% anticipating medium growth.
With unemployment rates low in many countries, companies are having difficulty finding sufficient qualified labour. Geopolitical and economic uncertainty, and supply chain issues, have further strengthened the Swiss Franc. Rising labour costs as well as rising prices or insufficient supply of raw materials are all likely to pose a significantly higher risk to the value chain for many in the year ahead.
Organic growth and new products are the top priorities for brands and retailers. The importance of sales channel optimisation and omnichannel strategy development continues. Component manufactures are trying to reduce costs to maintain margins. Limited production capacity is forcing many to invest in increased capacity, modernise their production equipment and optimise processes.
Strong demand, tight supply and ongoing supply chain challenges have led to stock shortages and delays for luxury watches. 43% of brands and retailers believe this scarcity is attractive as it increases the potential resale value. However, 57% also noted that clients have decided to go with another brand due to wait times, and 20% of consumers confirmed this.
The performance of the pre-owned market has attracted strategic investors and even speculators, driving prices to new heights. But resale prices have started to decline. Over 70% of brands see the pre-owned market as having a positive influence on brand perception and value and welcome the side-effect it has on awareness and visibility of the watch industry overall.
Sustainability means many things, depending on who you ask, which is why we asked both executives and consumers what the most important aspect of sustainability was. Most industry executives consider the ethical sourcing of materials and human rights to be most important. Consumers agreed, but they mentioned minimal or recycled packaging twice as much as the industry did.
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Previous editionsThe Deloitte Swiss Watch Industry Study 2021, Adapting to a changing landscape The Deloitte Swiss Watch Industry Study 2020, An accelerated transformation The Deloitte Swiss Watch Industry Study 2017, It's all about digital The Deloitte Swiss Watch Industry Study 2016, Navigating through stormy waters The Deloitte Swiss Watch Industry Study 2015, Uncertain times The Deloitte Swiss Watch Industry Study 2014, Changing times The Deloitte Swiss Watch Industry Study 2013, Time for the future