TAG Heuer - TAG Heuer Stöckli Special Ski Edition
Now winter is here, we can rediscover the joys of skiing. In Switzerland, we are keeping tradition, expertise and excellence alive. At TAG Heuer, they don't only develop their watchmaking expertise and stimulate their potential for innovation and creativity, they also champion Swiss values, including our love of the mountains.
A first for the watch brand, these skis are produced using state-of-the-art technology with the greatest respect for tradition thanks to the knowledge and expertise of Swiss ski manufacturer Stöckli.
Jean-Claude Biver, CEO of TAG Heuer and Chairman of the Watch Division of LVMH Group stated: "Pioneering, high-tech, precise, high-quality: both our brands have these qualities in common. These two Swiss brands have achieved remarkable success worldwide and are also primarily aimed at young people. TAG Heuer has long acted as Official Timekeeper at the Skiing World Cup and its affiliation with the world of skiing dates back to the 1980s. This is not, therefore, a new strategy, but rather a grateful recognition of this sport which is a pillar of tourism in our country."
And who other than Stöckli - who has been manufacturing skis in Switzerland for 80 years - to work hand-in-hand with TAG Heuer's designers to create a special edition offering excellent sporting performance, with a unique, original and distinctive design?
Marc Gläser, CEO of Stöckli added: "This collaboration with TAG Heuer was enthusiastic and very professional from the outset. Both our brands are focussed on performance and high standards in product design. We are very proud to work with TAG Heuer and we are delighted that our skis will soon be available in TAG Heuer stores. They will be an exciting addition to each store and a b signal for Swiss Made precision products.
Service - Behind the scenes of today's - and tomorrow's - after-sales service
Whereas the watch industry as a whole is becoming increasingly transparent, after-sales service remains a somewhat obscure area for end customers. Their watches are sent off, serviced and returned within a pretty variable time-frame. But what happens when the retailer's shutters are down?
A watch, an operation, a location
The first step consists in determining where the service will be performed. There are two polar opposite stances on this issue, depending on whether the model in question is Haute Horlogerie or mass market. The former systematically implies sending timepieces back to their Manufacture for any interventions on their mechanism. Depending on the geographical starting point, it therefore takes four to eight days just to send the watch back and forth.
Some countries are however more complicated than others when it comes to logistics, and require more time. Many specialists mention the case of Russia and everyone tries to find their own method of controlling these lead times. "One of the options for that particular country is to synchronise with a customer's travels," explains Guillaume Tetu, CEO Hautlence. "When he stops off in Geneva, Paris or Miami, he hands over his watch at one of our points of sale, which then sends it to Switzerland. We then make arrangements to return it to one of the next capitals on our customer's schedule."
Kurt Kupper wishes he had that option, although the CEO of the Reuge hand-crafted music box company points out that "Fortunately, there is almost no after-sales service with our models, provided they are set into operation from time to time. But if an incident does occur, such as an accidental fall, or house removals done without sufficient care, we sometimes have to send someone on-site". That naturally makes for shorter deadlines, but correspondingly higher bills if the repairs do not come under guarantee…
Finally, a last variable can help keep after-sales service to minimum: namely retailers' intervention on models that are not yet sold. Some of them remain unwound for long periods or are subjected to extended exposure to ultra-violet rays through the shop windows. De Bethune has notably developed an innovative policy in this area: "Points of sale are required to conduct half-yearly tests on our models. Nonetheless, in case of doubt, De Bethune does a complete overhaul of the product at its own expense, in order to guarantee that the end customer purchases watches operating at their best," says Pierre Jacques, CEO.
A watch, a movement, an exchange - in some cases
High-volume watchmaking does not always take things quite so far. According to Pierre Maret, Director of Customer Service at TAG Heuer, "During a given intervention (for a breakdown or for maintenance), and depending on the nature of the repair to be made, we may in some instances simply decide to fit a new movement". This is a plus for the customer, who benefits from a watch that is as good as new, ultra-fast turn-around, as well as enhanced longevity of the model.
Nonetheless, such a straightforward exchange is not always feasible, notably in the case of vintage models, as Pierre Maret explains: "The whole difficulty lies in determining which models are or are not considered 'vintage'. But we're working on that. The 1950s, 60s and 70s are regarded as 'vintage' years, and we are currently taking a closer look at the period spanning the late 1980s and the early 1990s."
When it comes to vintage models, everything depends on the nature of the repair. The whole after-sales service issue is very different in such cases, since it is no longer a matter of determining how long a model will be away being serviced, but instead whether it is indeed reparable. Pierre Maret sums up the situation: "We have a large stock of parts and we do our very best, but striking the right balance between financial and sentimental value can be a difficult decision to make for the customer. Whatever the case, we try to stick to four weeks for a recent model, and an average of 12 weeks for 80% of reparable vintage watches. "
Power reserve: a b point that becomes a weakness in after-sales service
Nonetheless, despite their good intentions, brands simply cannot speed up certain aspects of the process. Chopard has managed to reduce turn-around times thanks to a new 3,400 sq.m. service centre in Miami. Since September 2013, the latter has been handling returns from the United States, Latin American and Caribbean region. While that is certainly a praiseworthy effort, Chopard, like all other brands, will nonetheless face certain test-related lead times that simply cannot be cut, such as for models powered by its four-barrel L.U.C 1.98 movements.
Any intervention does indeed end with a test covering one or two complete power-reserve cycles, during which the precision is measured in multiple positions and at various times. And even though there are a few watchmaking tricks serving to accelerate these tests, a Panerai Luminor 8 Days, a Blancpain, or indeed an A. Lange & Söhne 31 Days, will mathematically require longer testing during after-sales service than a model with the standard 42 hours of autonomy!
The future of after-sales service
At the end of the day, good after-sales service is about finding the best way of handling multiple constraints. But are the latter liable to evolve in the future? Definitely, in terms of sheer volume. The equation is once again quite simple: the more watches there are on the market, the more after-sales needs will grow. So tomorrow will be about maintaining reasonable lead times despite being faced with exponentially larger volumes. This will require rapid changes in the two key areas of attitudes and processes.
When it comes to attitudes, after-sales service will need to be considered no longer as a cost centre, but instead as a means of securing customer loyalty. Excellent after-sales service (or customer service as it increasingly known) is in fact a means of extending and strengthening the ties between a brand and its customers. This nonetheless involves significant investments in the recruitment of watchmakers ahead of the upcoming volumes, in systematically storing plans and tools, as well as in transport, logistics, etc.
The other eagerly awaited and necessary transformation relates to after-sales service processes. We are currently seeing the emergence of two complementary policies. The first involves a group deciding to concentrate its entire after-sales activities on a single site, thereby saving costs and rental, while fostering the sharing of experiences, simplifying workflows, and improved overall service. That is what Richemont has done in the Paris area with a large after-sales service centre for all the brands within the group.
The complementary trend is towards regional specialisation. The Franches-Montagnes is currently preparing to enter the fray. Basically, it has had come to terms with the fact that that it cannot hope to compete with neighbouring Switzerland when it comes to developing and producing watches. Nonetheless, despite its lack of financial resources and clear-cut political determination, the region can count on its talents and its expertise. It would thus logically be the nearest and most competitive catchment area to absorb the overflow of watches requiring after-sales service that Switzerland will in any case soon be unable to cope with single-handedly.
Quartz - An Impossible Match?
WORLDTEMPUS - 3 June 2011
Some hide it, some show it, but it's a fact: many of the most famous brands have quartz timepieces in their collections. Even if the economics of this are understood in the low- to mid-range brands, it still seems like a paradox for the marques that do most of their business in five- and six-digit regions.
Curious is also the fact that some of these brands clearly put their quartz models on display while others practically hide them. One of the absolute institutions of our industry is a good example: Patek Philippe. This prestigious, multi-award-winning manufacture, a proud owner of some of the most technical patents in the watchmaking industry, still retains some quartz watches in its line.
When asked about this tricky position, first replies often sound like embarrassed justification, "We give the most attention to our automatic and manual movements, and clearly our male clients don't want to hear about quartz." However, the Twenty-4 model is Patek Philippe's most high-profile quartz timepiece - and it remains in the collection. It currently even makes for more than 20 percent of the brand's worldwide sales among new pieces. In absolutes, this represents 10,000 of the yearly production of 45,000 pieces. In fact, many of Patek Philippe's ladies' models are also available in a quartz version, and today almost 50 percent of these models are powered by a quartz movement, a full three references of seven: Twenty-4, Aquanaut Luce, and Gondolo Serata. The manufacture, always a little reluctant to talk about quartz, tends to continue listing at least these three references in the catalogue.
Unequal market shares
At Girard-Perregaux, this goes the other way but ends up in the same place. "Ladies appreciate the convenience of a watch that never stops and is always very accurate," says marketing director Xavier Markl. Still, the La Chaux-de-Fonds-based brand admits that only 5 percent of its sales by volume is attained with quartz pieces. In stark contrast, TAG Heuer hits 30 and even 40 percent in the U.S. market.
Obviously, the market approach is fundamentally different. Nevertheless, the two brands agree on common points. "Only a very limited number of people buy their watches exclusively for its movement. The daily use of the piece is also key. And on that specific question, quartz and mechanical watches are not competing, but complementing each other," Markl underscores. Marc Wälti, group brand manager at TAG Heuer, goes further: "As we have the same R&D people working both on quartz and mechanical movements, sometimes there are interesting cross-references - for example, our research on precision and magnetism on quartz movements is what led to the basis of our mechanical Pendulum."
Historical
With only 5 percent of its business done with quartz timepieces, Girard-Perregaux could easily drop them from the line to reach a higher level of brand positioning - focusing on having only mechanical manufacture movements, a status that every watchmaker attempts to attain.
Nevertheless, Markl wisely recalls that, "quartz is also a significant part of the history of watchmaking in which Girard-Perregaux played an important role." It was this company that created the standard frequency of 32,768 Hz for quartz watches in 1971 now used by the entire industry. Girard-Perregaux produced more than 20,000 units of the most famous of its quartz movements, the GP350. The company utilized 13,000 units for its own models and sold 7,000 to other brands - including Jaeger-LeCoultre.
TAG Heuer's position is similar: its "DNA" is also based upon R&D, and, whether we like it or not, quartz entered the history of watchmaking when the CEH produced its first quartz ebauches in 1967.
(Dis)connected markets?
For TAG Heuer's Wälti, quartz is the first step to getting consumers interested in mechanical timepieces. "Some customers get attached to the brand and its quality, and one day buy their first mechanical piece." While this is true for entry-level watches, it doesn't necessarily apply to luxury brands for one main reason: the price of a luxury quartz timepiece is equal to the price of a mid-range mechanical watch, ranging from 6,000 to 15,000 euros. In other words, if the prices are equal, it's not economic reasons that draw the consumer; it's a rational choice.
The two markets might go their separate ways in the near future: if, for entry level brands, quartz remains the basis of the whole business model, luxury brands can easily move on without it - particularly when we see brands like Girard-Perregaux generating more than 95 percent of its revenues with non-quartz timepieces. Still, generally speaking for the Swiss watch industry, quartz remains a key factor of success representing 90 percent of production by volume. Be that as it may, the remaining 10 percent - mechanical watches - count for 52 percent of revenues.
Quartz predictions
Analysts currently predict b growth in the female market segment for mechanical watches. At the moment, women remain the backbone of quartz sales in the luxury segment. The question that must now be asked is: how will luxury brands will react if women progressively leave a segment that counts for less than 5 percent of sales? Will the brands continue investing in quartz for clients that no longer exist?
Forty years after quartz's mighty rise to the top in 1970, it is no longer a significant factor in the luxury market. In an interesting twist of watch history, it is actually women who have kept it in place here - for the time being.
Captions
LaureatoQuartz_PR.jpg
The Laureato by Girard-Perregaux celebrates the 40th anniversary of Swiss quartz © Girard-Perregaux
THF1 Full Diamonds Bezel & ceramic bracelet .jpg
4910_53G_001.tif
Began the luxury quartz craze for women: the Patek Philippe Twenty-4 © Patek Philippe
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A Patek Philippe quartz movement © Patek Philippe
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