Today an increasing level of incomes has resulted in a substantial escalation in purchasing power. This significant generation of financial wealth has only fuelled people’s aspirations — the desire to possess that erstwhile inaccessible item of luxury. In fact, it is this growing need that has encouraged many manufacturers’ of luxury products to increase their production output. The end result — luxury is no longer limited to a select few.
As the concept of luxury changes — from an exclusive item to one that can be afforded by many — brands are striving to distance themselves from this segment. In the watch industry, the increasing number of affluent consumers has led to the growing prestige section.

The burgeoning segment
Financial wealth is no longer limited to royalty and celebrities, but has become available to people who have achieved financial success in various fields. Moreover, wealth is no longer bound to the West; and is spreading in other parts of the world such as China, Eastern Europe and India. As manufacturers realise, with the potential of this growing affluent consumer base, it is only natural that more players find it lucrative to enter the luxury category and create products and services of the highest standards. As P.H. Narayanan, Brand Manager, Omega, explains, “Moving up the value chain is just a natural business phenomenon. Watch enthusiasts demand more and watchmakers upscale their brand, which is of course logical.”

What was deemed as luxury a few years ago is no longer considered an extravagance today. As the notion of luxury changes, brands are doing their utmost to set themselves apart from the rest. Christophe Nicaise, Regional Director, Harry Winston explains the key difference between prestige and luxury markets. He says, “Both prestige and luxury usually go hand in hand, but while prestige takes time to establish, the tag of luxury can be achieved by applying the highest standards of quality, exclusivity and craftsmanship to a product and service.” Brands state that both prestige and luxury are determined by the approach that a manufacturer awards to watchmaking.

Stefano Macaluso of Girard-Perregaux highlights another simultaneous change that is taking place — emergence of the discerning consumer. He elucidates, “Today, everyone has realised that the luxury segment is the one that works. However, at the same time, the end-consumer is becoming increasingly attentive and discriminating. Consequently, ‘authenticity’ is a word that is going to become more and more important.” He believes that with luxury becoming more accessible, the elite consumers are looking for values that transcend the investments those brands make. He adds, “Authenticity stands for real value creation, craft and art that are the result of a tradition, a heritage that is sometimes based on hundreds of years of uninterrupted business.”

Unique composition
The premise of any successful strategy is to provide a product or service that is unique from its competitors. This is achieved through its positioning, which can be based on a number of factors. As Gianfranco D’Attis, Brand Manager, IWC, puts it, “Our watches are known for its quality, technical superiority, innovation and timeless design. It is targeted at the male connoisseur with a discerning taste.” For IWC, this strategy has defined their image and positioning as a prestige brand since the very beginning. As brands strive to achieve that level of ‘uniqueness’, manufacturers like IWC, Girard-Perregaux and Harry Winston clearly believe that it is a brand’s ability to develop their products in-house that distinguishes them from the others.

It is this feature that enables them to label their timepieces as unique. Macaluso adds, “When you develop most of the components of the product in-house like we do (the movement, the case, the bracelet, to name just a few) rather than buying ‘off-the-shelf’ components and assembling them, you end up creating something that is truly authentic and exclusive. When you invest years and millions in research and development to create a new movement that allows you the freedom to custom-design a watch around it, when your master craftsmen spend thousands of hours to create a complicated watch, then these truly become exceptional pieces. As a result, they are of the highest standards — rare and unique.”

In fact, companies often undertake brand repositioning to appeal to a different audience. Michael Wunderman, President, Corum, speaks of his company’s new strategy for development. He says, “We have a whole new collection of watches and movements. It was a good opportunity at Baselworld to come up with a clear message of what the identity of Corum is. We have had a wide range of products in the past and it has been difficult for our consumers and for ourselves to understand the actual story of Corum. There had to be a message from the brand. Now we have the message of consistence.” In this regard, Corum has introduced the Unlock and Conquer Campaign. They have developed a communication strategy that establishes a link between the Admiral’s Cup sports watches, the Romulus, Golden bridges among others.

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