NEW YORK — It might be time for the watch business to start picking up again, and magazine publishers can’t wait.
This year has been a rough one for watchmakers, as it has been for all luxury goods manufacturers struggling with recession, war, SARS and the dearth of spendthrift tourists that resulted. But some firms said there is potential that a solid holiday sales season will turn double-digit sales declines from the spring into only single-digit declines by year-end, with better things ahead in 2004.
Publishers who dominate watch and jewelry advertising — books like Town & Country, In Style, Vogue, Vanity Fair and W, WWD’s sister publication — have already begun sharing the same faith. While all parties were reluctant to discuss specific numbers, the general consensus among a half-dozen publishers interviewed is that their watch business will decline this year by a few percentage points, with the exceptions touting single-digit gains at best.
But 2004 looks to be different. The combination of two trends — the rising tide of women buying luxury watches and the boomlet of new products arriving from fashion labels such as Christian Dior and Louis Vuitton — are likely to create a small groundswell in advertising for these jostling new brands.
“Every fashion house is coming out now with a watch if they haven’t already done so,” said In Style associate publisher Lisa Jordan. “And so everybody is jumping on the bandwagon that men, and women, too, should have a ‘wardrobe’ of watches.”
But there’s a catch. After a tough year, luxury watchmakers are sticking with what they know — manufacturers and publisher alike are seeing a “flight to quality” as luxury brands prepare to pile into the same half-dozen magazines.
“Next year, I think you’ll see further consolidation, meaning the big brands will continue to support their big winners,” said Jim Taylor, the publisher of Town & Country. “The magazine that gets that business will continue to do well, but if you’re an experimental book, or a new book, or noncore, you’re dead in the water, good luck.”
He doesn’t seem to be exaggerating. At Patek Philippe, at the highest of the high end, “our budget is going to remain fairly static,” said Tania Edwards, a vice president, adding, “We have been very happy staying in our core books, and we don’t like to move around.”But Patek also plans to spend half its 2004 budgeton its 24 watch for women, which, unlike the classic men’s line, is being marketed as a luxurious splurge, rather than a keepsake to be handed down for generations.
“That’s very much a masculine thing,” Edwards said. “Even though we want women to pass their watches down to their daughters, they’re in a completely different place. It becomes a much more emotional, personal purchase. It’s a totally different line of thinking. We listened to women tell us this, and we changed it 180 degrees.
“Since the introduction of our new campaign, the 24 has become the most successful watch in the history of the company. You have to speak to women in a language they understand, and that is something the watch industry hasn’t necessarily been cognizant of.”
The magazines aren’t doing the best job to lure women either, and the publishers are the first to acknowledge that.
“Women plunk down $1,000 for a handbag that won’t last the season, but they hesitate to spend $4,000 on a pair of earrings or watch they could wear forever,” said Taylor. “It’s because these businesses are still in the infant stages of branding. We’ve got to retrain the consumers.”
That will happen, he said, when magazines consistently emphasize jewelry and watches in editorial layouts rather than treat them as afterthoughts, a problem that is partially rooted in the way magazines are staffed.
“If you look at the masthead, most magazines have six fashion editors and one editor who splits time between accessories and jewelry,” Taylor said. “The people on the edit side aren’t making it matter.”
Much further down the price spectrum, sport and mass market brands are proving to be more adventurous with their ad spending.
Swatch is choosing to invest the bulk of its marketing budget in opening and transforming its existing stores, seeing them as a supplement to its traditional campaigns. Tag Heuer, which is fortunate enough to have golfer Tiger Woods touting its Link series of watches, is expanding a TV campaign originally aimed at golfers and ESPN golf broadcasts to include spots during “Late Night With David Letterman.”Most watchmakers consider TV to be too broad a medium, failing to reach enough potential customers to justify its cost.
“But TV allows you to hear it, see it, almost smell it,” said Ulrich Wohn, vice president of marketing in North America for Tag Heuer. “There’s going to be some spill, but we like to think we’re reaching customers from every angle this way.”
But the average watch ad continues to be a product shot in a glossy magazine, which bores some creative types. David Lipman, who creates David Yurman’s jewelry and watch campaigns, makes sure to tie the individual watch ads into the look and feel of the overall campaigns, which this fall are “very much inspired by the silver screen, that period of Jean Harlow–meets–Marlene Dietrich,” he said.
“The watches tie into the jewelry and become one brand statement,” Lipman said. “For me, it’s very clear, very simple, and as for the other brands — good luck to them. It all becomes more of the same.”
But that’s changing, thanks to the increasing waves of watches from the luxury houses.
“They’re taking a real fashion approach,” said In Style’s Jordan. “But I don’t know if you’re going to see more of what those brands are doing and what they’ll achieve. But you may see some of the up-and-comers keep taking that approach.”
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