A Citizen Watch store.

Citizen Watch’s U.S. division has accelerated plans for restructuring. The company on Friday trimmed about 10 percent of its back-office and sales workforce, mostly based in California. Today, it reveals that the majority of that headcount will be replaced by data analytics and digital-focused positions.

“We are using this time period to come out strong as a company. Now is a time to take market share — where smaller players fade away and bigger companies will perform well. When we open up, we anticipate a soft opening going into the third quarter and pent-up demand in the fourth quarter into next year,” said Jeffrey Cohen, Citizen’s president for North America.

The company is betting that its price-to-quality value ratio — with most watches retailing for less than $500 — will attract new customers in a post-COVID-19 world, when shoppers are expected to have a heightened level of price sensitivity.

Citizen, which in the U.S. relies on wholesale at large department stores like Macy’s Inc. as well as local jewelers, had been evaluating the state of retail prior to the coronavirus crisis. Last year it hired the Boston Consulting Group to help implement plans to stave off losses from shrinking store counts. Those plans were meant to be implemented throughout 2020, but instead have been expedited in response to COVID-19’s impact on retail. The steps entail a holistic reevaluation of how Citizen conducts business with its wholesale partners as well as amping up its direct-to-consumer arm.

“We are launching a lot of new digital platforms,” said Cohen. “We need to be responsive to the way retailers conduct business today. We believe the Monday-to-Friday workweek schedule does not match up with the needs of retailers anymore. We put in a new state-of-the-art site that is accessible seven days a week,” he added.

The platform allows retailers to place orders for product and replacement parts online, as well as allowing them to pay invoices. It also enables them to track watch repairs.

“Our main business is our wholesale channels. We are working on new platforms using data and analytics to make sure we are driving people to retailers. We see their e-commerce sites as our digital flagships. We will send [consumers] there for information and to have a better brand experience and to get closer to them,” Cohen said of the reasoning behind increasing the company’s digitally-focused staff.

Citizen will also expand its own digital footprint. The company is developing virtual try-on technology so consumers can get a sense of how watches will look on their wrists, set to launch in the fourth quarter.

“We are redirecting [business] with a combination of data and digital as a formula for growth. We can’t rely as much on retailers as we have in the past, we have to come with opportunities, stories, activations, differentiation — doing things differently than others in the watch business today,” said Cohen.

While most of Citizen’s U.S. retailers have been closed for the last nine weeks, Cohen noted that the company has “made up a tremendous amount of business on e-commerce,” particularly with gift-giving for Mother’s Day and graduation.

The average price of product sold online throughout this period has been “substantially” higher than typical exchanges — about 20 to 25 percent more. “There’s less resistance to people spending their discretionary income,” Cohen said.

In order to meet consumers online and drive e-commerce, Citizen will also reallocate advertising spending to digital formats, effective immediately, with a focus on video content.

As an experiential play, the company will double down on its partnerships with companies like Disney. Citizen is the official timekeeper of Disney parks around the world and will push this kind of verbiage once business reopens as a brand storytelling element. Through its partnership with Disney, Citizen also has a marked presence at Comic Con through the Marvel franchise, which brings the brand to a highly engaged audience.

Said Cohen: “We are trying to make a different kind of connection, through stories and human interest. It’s about striking an emotional connection.”

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