Luxury watches can represent a carefully-considered investment, a big milestone in someone's life, an expensive gift, or an indulgent treat. Regardless of what or whom they're bought for, their price tag comes with an expectation that customers are getting the best, and the purchase experience should mirror that.
In the past, direct personal contact played a major role in this purchase decision, but the pandemic has made this kind of service challenging. And the pandemic isn't the only thing affecting the industry – consumer focus on sustainable and ethical materials, the popularity of the second-hand luxury goods market, and the disruption that comes with digital transformation are all making waves.
In this report, we used Brandwatch Consumer Research to analyze over 1.5 million online mentions of 25 major luxury watch brands in German and English. Data was gathered from January 1 - August 31 2021 from Twitter, Instagram, Reddit, news sites, forums, and blogs to find out:
- What events in 2021 led to a spikes in mentions around luxury watches?
- Which of the brands we analyzed are mentioned the most online?
- What trends are emerging in the luxury watch market?
- What can emotion analysis tell us about the industry?
- And much more
Joe Biden and his Rolex watch sparked discussion
Throughout the pandemic, mentions of luxury watches have remained fairly steady, without any major increase or decrease in volume over time.
That said, we can still find the most talked about events from January to August 2021. With the help of Iris, our AI analyst, we were able to quickly identify what was causing the peaks in the conversations.
By far the highest peak in online mentions happened on January 23. The reason for this was a New York Times article about Joe Biden wearing a Rolex watch the week he was inaugurated. This article then sparked an intense debate online.
On January 31, a Reddit thread about the 59th Rolex 24 Qualifying Race in Daytona garnered a lot of online mentions as spectators watched the race. The 24-hour race has been sponsored by Rolex since the early 1990s and the winner receives a Rolex Daytona watch.
On July 12, Zenith announced Xiao Zhan as its new brand ambassador. Xiao Zhan is a Chinese actor and singer, and the news was shared enthusiastically by his fans on Twitter.
There was another peak on April 7. The Watches and Wonders trade fair, which this year took place offline and online in Geneva and Singapore, caused a lot of discussion. It is one of the most important trade fairs for the luxury watch industry, where the biggest brands present their innovations.
The top-mentioned luxury watch brands online
When you think of luxury watches, one name probably comes first: Rolex.
It's therefore not surprising that what is probably the world's most famous watch brand ranks first by a large margin when looking at online mentions of the watches we studied.
The luxury watch manufacturer can boast almost twice as many mentions as the brands in places two to ten combined.
However, Rolex isn't the brand with the most growth in conversation over the last eight months.
In first place for growth is Zenith, with mentions growing more than 100%. The reason for the strong increase is the collaboration with the Chinese actor and singer Xiao Zhan mentioned above. The announcement of their new brand ambassador caused a lot of excitement among fans, and this cooperation makes a lot of sense. The Chinese market is now the most important market for luxury watch brands, and 30% of Zenith sales come from China.
The key topics of conversation around luxury watch brands
Segmenting the online discussions into different subject areas shows that the price is by far the most talked about topic. Second and third place go to new collections and the quality of the watches, respectively.
Breaking the data down further, by site or location for example, can present deeper insights:
- Price is talked about more on forums and Reddit than on the other platforms.
- Brand ambassadors are a bigger topic on Instagram and Twitter.
- Campaigns are more likely to be mentioned on blogs.
- Online authors in Singapore are more likely to talk about the price than those from other countries.
- In comparison, consumers in Russia talk more often about quality.
- In France the topic of sustainability is more prominent.
Compared to the previous year, conversations about brand ambassadors and sustainability increased the most. The volume of conversations about brand ambassadors and sustainability both increased by 41%.
Brand ambassadors
In the discussions about brand ambassadors and influencers, Zenith mentions rose the most in 2021 (+ 931%). As already mentioned, this is due to the new brand ambassador Xiao Zhan, which led to a lot of buzz on Twitter.
The mentions for TAG Heuer and Chopard have also risen sharply (+149% and +140% respectively).
TAG Heuer has benefited particularly from its collaboration with tennis professional Naomi Osaka. When the tennis player canceled her participation in this year's French Open and Wimbledon games, the worldwide attention she attracted to the mental health of athletes was huge. Shortly after the announcement, brands, including TAG Heuer, expressed their support and this was perceived positively.
Chopard, on the other hand, benefits from collaborations with well-known actresses. For example, the American actress Julia Roberts is a key ambassador for the new Happy Sport watch collection.
Sustainability, buying second hand, and vintage watches are seeing more interest
Sustainability is becoming an increasingly important topic in many areas, and the luxury sector is no exception.
Millennials and Generation Z are particularly conscious of this when it comes to purchasing decisions. According to a survey by Depop, 90% of Generation Z in Australia, the UK, and the US have changed things in everyday life to be more sustainable. Meanwhile 60% consider it important that companies actively reduce their ecological footprint and 45% prefer environmentally friendly materials.
This is also reflected in online discussions about luxury watches. This year, mentions about sustainability in the industry increased by over 40%. In the mentions of luxury watches and sustainability, Rolex is named the most frequently, followed by Chopard, TAG Heuer, Breitling, and Patek Philippe. Conversations from consumers in this area focus on sustainable and ethical materials such as watches made from recycled materials, ethical gold, or vegan leather.
According to a survey by Deloitte in 2020, 89% of the managers of Swiss luxury brands surveyed said that sustainability will be an important topic for the industry now and in the future. However, only 49% said they actively talk about their sustainability initiatives on their website or social media channels and only 31% publish a sustainability report. Most brands recognize that sustainability is an increasingly important issue in the luxury sector, but not everyone has acted yet.
That said, a number of the watch companies we studied had positively discussed initiatives in this area online. For example, Chopard has created collections using ethical gold since 2018, Ulysse Nardin produces a watch from recycled fishing nets, Rolex collaborates with National Geographic, and Breitling promotes the protection of the oceans.
In addition to people being more conscious of purchasing sustainable products, the purchase of used products in the luxury sector is also playing an increasingly important role. Sales of second hand products in the luxury sector have increased in the last five years by 65%.
And, while there was a dip in interest earlier in the year, social conversations on the subject have risen sharply in recent months.
While people use forums to talk about second hand watches most, the number of mentions rose the most on Instagram.
A rethinking seems to be taking place among luxury watch manufacturers. While the used watch market used to be perceived primarily as a threat, more and more brands seem to embracing it as an opportunity. Luxury brands like Zenith and Richemont are responding to the demand for second-hand or vintage watches by offering restored collections or buying an online store for used watches.
What emotions do luxury watches trigger in consumers?
We also divided online luxury watch conversations into six emotions:
- Disgust
- Fear
- Joy
- Sadness
- Surprise
- Anger
Unsurprisingly, Instagram is the platform where people express the more positive emotions around luxury watches, while angry posts mainly appeared on review sites (42%) and forums (39%).
Which brands trigger the most joy?
These five luxury watch brands have the highest proportion of joy mentions in online conversations:
- IWC Schaffhausen (80% of mentions to which an emotion could be assigned expressed joy)
- Chopard (78%)
- Zenith (73%)
- Girard-Perregaux (70%)
- Ulysse Nardin (69%)
Which topics/aspects are mentioned positively by consumers?
Breaking down the emotion-categorized mentions further, we took a closer look at how they relate to specific topics around luxury watches.
In almost all of the topics examined, joy is the predominant emotion. That said, there's plenty of insight to be discovered in more negative conversations.
Only when it comes to customer service and price is there more annoyance than joy.
Customer service has the highest proportion of angry mentions by far – 57% of mentions to which an emotion could be assigned express anger. It looks like the move from physical stores to online sales may have resulted in frustrations.
On price, 40% of emotion-categorized mentions are angry. In the price discussions, "expensive" is often mentioned. This is not necessarily a bad thing. These conversations also feature mentions from fans who wish they could buy a particular watch but cannot afford it right now.
Not only did the volume of conversation about sustainability and brand ambassadors increase this year, but they also inspire a lot of positivity. 69% of the emotion-categorized mentions about brand ambassadors and influencers express joy. When it comes to sustainability, it's 66%. These should be seen as key opportunity areas for watch brands who aren't best promoting their ambassadorships or sustainability initiatives.
Luxury watch brands are becoming more digital
The pandemic has forced many industries to conduct their business activities online, with shops closed due to lockdowns and trade shows and conferences canceled. To a certain extent, the pandemic has accelerated digitization in many areas and this is also the case in the luxury watch industry.
The market share of online shopping in the industry almost doubled in 2020 compared to 2019, from 12% to 23%. Be it the expansion of online shops, a stronger presence on social media, or the digital transmission of events, the luxury watch industry has adapted to the changed circumstances and in doing so has become more digital.
Trends that have risen sharply in this area are cryptocurrencies and blockchain – online conversations have increased by over 145% this year.
And one area which appears in many mentions in 2021 but barely played a role in the luxury watch market in 2020 is NFTs. Not only are NFTs a popular way to sell objects digitally in the art market, but they could also play a bigger role in the luxury watch market in the future.
In April this year at a digital auction, the first "digital version" of a luxury watch was sold. Jean-Claude Biver, former CEO of Hublot, offered the NFT version of his Bigger Bang Tourbillon Chronograph Hublot watch. NFTs embody exclusivity and individuality, traits that are also important for fans of luxury watches. With accelerated digitization, we could see more luxury brands experimenting with NFTs in the future.
Conclusion
The luxury watch industry is facing a lot of change. The pandemic has accelerated digitization, there's increased interest in sustainable materials, and the second-hand luxury watch market appears to be taking off.
Companies must think about their many touch points (which may have to become even more varied) to create better digital experiences and improve customer service which, when done wrong, can prompt a lot of anger. Selling NFTs may also be a way to help highlight the unique value and exclusivity of luxury watches in the digital age.
Cooperation with brand ambassadors remains an important marketing investment for brands, giving their products a more personal touch and helping expand their presence in important markets. Many luxury watch brands have also recognized that younger target groups are placing increasing importance on sustainability in their purchase decisions. While some brands are actively promoting their initiatives for more environmentally friendly products, others have so far been hesitant.
It's so important that brands keep evolving consumer needs and preferences in mind and to act with agility before they are left behind by the competition.