Manufacturers of luxury products need only take a look at the watch business to garner a lesson on how to adapt to the changing buying habits of consumers.
A recent report predicted that babies born in the year 2011 will not even know what a watch is, let alone wear one. This is not surprising considering that current statistics indicate young people don't wear watches now - ask them for the time and they'll check their smart phone.
So does this mean watches are fated to become as obsolete as rotary phones and VHS players? Not so fast. Two categories that have bolstered the watch business against all odds are: luxury and fashion. Add to that new watch innovations across all categories, and the picture looks a lot rosier.
Fashion Watches. Fossil, one of the five top companies in the Apparel, Accessories & Luxury industry flipped its watch inventory five times in the last fiscal year versus other companies who on average only turn their inventory once a year. What's the secret Fossil formula that can help other companies grow their business?
Lean inventory levels
Aligning with labels that have strong brand equity and building on it
Constantly adapting their lines with new styles and materials
Strong ad campaigns and in-store displays that support each brand
Creating a demand for their products by positioning watches as a must-have
Luxury Watch. This category is booming with luxury customers purchasing expensive watches as an investment with price no object. Compagnie Financière Richemont, which owns the lion's share of luxury brands, reported a 33% increase in revenues in the third quarter of 2010 thanks to a strong demand for luxury timepieces. Three key ways luxury watch brands can keep consumer interest at a peak:
Exclusive styles and limited editions
Complicated movements with superior craftsmanship
Marketing to an affluent audience seeking rare and exceptional timepieces
New Watch Trends. As for the device-hungry youth culture - the watch industry is way ahead of you. Watches are the new devices and the latest models have a lot to offer. In fact, watch technology is moving so fast, it could leave mobile phone technology in the dust.
So maybe the watch business isn't such an endangered species after all. With the benefit of new technologies, design innovations and smart marketing tools, watch companies can keep their business going like the Energizer Bunny.