From resale to recycled steel, Swiss watches adapt for the next generation

Swiss watch brands are set to benefit from a rise in pre-owned sales, driven by millennial and Gen Z consumers. A recent report from Deloitte estimates the pre-owned luxury watch market will grow to US$35 billion by 2030. 

The growth is expected to be driven by the launching of new pre-owned offerings by brands, the expansion of existing channels and consumers looking for discounted and discontinued timepieces.

The report also predicts that the share of watches bought online will increase by 30 per cent by 2030. As reported by Bloomberg, Generation Z and millennials are more likely to purchase pre-owned watches.

The likelihood of purchasing a pre-owned watch in the coming year was highest in China and the UAE, both 62 per cent, followed by Hong Kong at 44 percent. 

Consumers in Germany, Japan and France were the least interested in pre-owned watches, while the United States was the most important market for the Swiss watch industry for the second year in a row, taking in the highest share of exported watches. 

Customers in Asia recognise the potential of higher resale prices or portfolio diversification.

The metaverse

The report noted that 57 per cent 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.

Using a watch to adorn one’s avatar in the metaverse is beginning to catch on with consumers, particularly those who were surveyed in Hong Kong at 51 per cent and Singapore at 49 per cent. 

Interestingly, although 40 per cent of consumers are interested in NFTs, mostly for their investment potential, 31 per cent of them still do not understand this virtual asset paradigm.

According to the consumers surveyed in the report, around 40 per cent overall are interested in the digital twin of a watch, with overwhelming interest shown in China at 82 per cent and the UAE at 76 per cent.

In March, Frederique Constant became the first brand to launch a new timepiece in the metaverse. Inviting customers to its digital hub dubbed Metacube, it released two limited-edition Classics Worldtimer Manufactures to celebrate its foray into the virtual world and the brand’s 10th anniversary.

Meanwhile, in June, Tag Heuer partnered with Bored Ape Yacht Club and Clone-X to release an update of its Connected Calibre E4, giving wearers the ability to display their virtual NFT artworks, both static and animated.

Data-based decisions

With increased digitalisation and the growing importance consumers place on personalised interactions with brands and retailers, data-based decision making is becoming increasingly crucial.

Brands and retailers are using direct-to-consumer (D2C) sales, at 54 per cent, social media channels at 54 per cent, and 50 per cent of them are investing in their customer relationship management (CRM) systems as well.

The report noted that the pandemic accelerated the adoption of D2C and demonstrated its importance in an industry that has traditionally relied on business to business (B2B) and wholesaler channels.

In China, D2C channels are strong, with luxury companies selling through platforms such as WeChat, their mini programs and Tmall Luxury Pavilion. Customers were able to virtually try on luxury watches through augmented reality on the Tmall platform.

Embracing the greener aspects

There is an argument to be made that a well-made mechanical timepiece is by definition sustainable. It can be passed down for generations or traded in. Many can be repaired indefinitely, thereby reducing the need for more materials to be used in manufacturing.

Compared to smartwatches, where the technology can easily be obsolete two years from its purchase, an investment in a luxury timepiece may be better for the environment.

Innovation in the industry has seen the creation of materials that are slimmer, lighter and more robust, and led to more circular and sustainable practices with a smaller environmental footprint.

For example, at the recent Watches and Wonders exhibition in March, IWC introduced an alternative leather strap made from MiraTex, which contains natural materials such as FDC-certified natural rubber and cork powder and is free of petrochemicals.

Another notable use case is Cartier’s Tank Must Solarbeat, which comes standard with a vegan-leather strap partially made from apple skin, and Mondaine’s vegan strap options in the form of grape leather.

Circular aspirations

Beyond the straps, recycled steel is also gaining favour in the industry. Panerai’s eSteel comprises 95 per cent recycled steel, while IWC has increased the proportion of its recycled steel to 85 per cent.

Chopard’s Lucent Steel alloy is made using 70 per cent recycled stainless steel. Interestingly, the latest Dive watch from Gucci also uses recycled steel and bio-based materials. 

When it comes to circularity, ID Genève’s Circular “S” model aims to be the pinnacle of circularity. Starting with the materials, it uses 100 per cent recycled stainless steel collected from the waste of watch and medical companies in the Jura region. 

Straps are made from discarded grape skins, stalks and seeds from wine production or from compostable green waste sourced from parks in London. 

Even the packaging is compostable and is composed of mycelium (the root-like structure of funghi), mixed with agricultural waste like hemp, cork and sawdust.

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