Bank Branding

Luxury Swiss Watches: Is innovation shifting from technology to brand?

When we hear “made in Switzerland” a host of images spring to mind, among the most prominent is likely to be a classical Swiss watch. Not just any watch, a superior, high-quality, mechanical watch. Explore a little deeper and we enter a world of luxury, privilege and sophistication. Brands like Patek Philippe, Rolex, Omega, Jaeger-LeCoultre and Zenith shimmer alluringly in our minds.
A recent international survey ranked Switzerland highest in the world as a country of origin associated with quality (ahead of Japan and Germany). Another study showed that consumers all over the world strongly associated Swiss products with ”high quality”, “reliability” and “luxury”. But, curiously, the same people also rated Swiss poorly when it came to “price competitiveness” and “innovation”. For the luxury watch industry, “price competitiveness” hardly matters, after all pricing is always relative and when your competitors are also Swiss the collective impact can actually be quite positive as it reinforces the cost of entry and perceived prestige of ownership. But what about innovation? It seems that many iconic Swiss watch brands seem to regard innovation as a core strength, they proclaim it in their advertising, on their websites, in their brochures and through their spokespeople. Here, for example, are some quotes from three luxury watch brochures:
“…ground breaking technological development that provides better long-term accuracy”
“…a new chapter of horological history for a new millennium”
“…futuristic, daring, high-tech and cutting edge… superior technical solutions”

It would appear then that there is either a growing anomaly between what the industry wants its audiences to think and what their audiences actually believe, or the Swiss national brand no longer reflects the industry with which it has been intrinsically-linked for the last two-and-a-half centuries.
Interestingly, there was a time, a few generations ago, when there would have been no such discrepancy. Watches might be regarded as the first high-tech gadgets in history and Switzerland‘s burgeoning watch brands lead the world in technical innovation. The development curve for the mechanical watch design actually began in the 18th century and by 1800 most of the cleverest innovations (including the chronograph, the self-winding mechanism and, most notably, the tourbillon) had already been invented, with Breguet, the premium-priced technological leader, firmly positioned as the Apple of its generation. By the end of the 19th century most of the major watch brands had established themselves and their biggest challenge was to manufacture these high-tech gadgets in ever greater numbers and at more affordable prices to meet growing international demand. It was in so doing that Switzerland’s legendary watch-making was consolidated and, as its products reached wider audiences, they had a profound and lasting effect on the national reputation. It would not be unfair to say that for much of the last century the basic architecture of the mechanical watch has remained largely unchanged. There have, of course, been significant advances made in the manufacturing processes (finer tolerances providing more consistent quality) and in the application of new high-performance materials, but these are comparatively minor to the average consumer most of whom have long given-up on the Swiss watch for daily timekeeping anyway and for whom a Swiss watch is primarily a luxury accessory.

As if to prove the point, a recent advertisement for the Cartier Santos (the wristwatch created by Cartier for the early aviator Santos-Dumont) simply takes the headline: “Since 1904”. Ironically, you could purchase the same timepiece used by Santos-Dumont to time his record-breaking 21-second flight from the airport boutique before you jet-off on a 14 hour flight across the globe!

It was, of course, the arrival of the quartz watch in the 1970s that changed everything. In terms of scientific innovation the world had moved-on and, by rational analysis, the Swiss watch industry suddenly looked about as outmoded as the record player would look on the arrival of the CD a decade later. But, for similar reasons, its appeal was re-born. It was no longer a rational product to be assessed scientifically, rather it became a subjectively-satisfying product with which buyers connect emotionally, creatively, intuitively. The luxury Swiss watch was reborn as an exquisite, hand-crafted indulgence whose functional capabilities are patently not the primary motivation for purchase. It is, today, a lovingly-crafted piece of functioning jewellery, an object of fascination and desire.

From a scientific/technological perspective, it is fair to say that the gadget innovation baton has now been seized by Japan and the USA (the national brands that rank highest in public perception for ‘innovation’). Products like Seiko’s revolutionary ‘Eco-drive‘ and ‘Ananto‘ and Citizen’s ‘Kinetic‘ models have accelerated the performance expectations of the wristwatch into a new dimension. But then, their customers’ motivations are as different from the Swiss luxury watch buyer as those of the latest Panasonic digital audio system’s are from the specialist hi-fi chosen by the audiophile buyer.

As with any market, it is vital that the brand owners understand their customers’ motivation. Clarity of positioning is essential and, with the best will in the world, no amount of window dressing about cutting edge technology is going to sell a piece of precious time-keeping jewellery even to the most technically-minded customer. While even the very finest Swiss watch mechanisms have now been eclipsed by newer technologies, this is immaterial to the appeal of the brands whose beautifully crafted products and breathtaking intricacy continue to enchant their privileged owners.

It is the brand promise and pride of ownership that will increasingly enable Swiss luxury watch brands to stand-out and thrive in the luxury marketplace. Their ability to deliver a distinctive, relevant and consistent experience will maintain their appeal and customer loyalty over time. It may well be that the key to future success in the luxury watch business will be ever less associated with the mechanism and ‘technology’ within the watch and increasingly with the sense of style, finish, quality of materials and personality that the watch exemplifies as a luxury accessory.

Although it might sound like contentious sacrilege today, is there really any reason why we should not, in future, see a luxury Swiss watch brand with a Seiko ‘Ananta’ or Citizen ‘Kinetic’ mechanism concealed within its stylish gold case? Just as Aston Martin has been dipping its toe in the water with its Cygnet concept car (a genuine Aston Martin luxury experience beneath which is a mechanically unmodified Toyota iQ city car), perhaps the future direction for all luxury brands will be to define, own and express their own authentic, emotional brand experience. Then, to determine the best way to deliver this via the most appropriate technologies currently available. This is, after all, the business model used so successfully by Apple Corporation – spiritual successors of those pioneering 18th century trailblazers, Breguet.

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An extravagance that defies logic…

Is there any other product quite as enigmatic as a luxury watch?

As the world gritted its teeth in the face of economic recession in 2009, demand for high-end luxury watches confounded the pessimists and remained defiantly robust. Admittedly fewer pieces were sold, but there was a marked shift towards the more illustrious and expensive prestige brand models. The desire to own a fine luxury watch not only continues undiminished but its purchase has become even more momentous – it might be even be justified as a secure investment in uncertain times. We should, however, be under no illusion that the real motivation is invariably emotional rather than rational, i.e. “rather than seeing my money as a figure in a deposit account earning very little return, I can see it as the exquisite timepiece that I have always dreamt of”. So, when the heightened allure of a fine watch, as a luxurious escape from the grind of daily life, starts looking like an eminently sensible investment, the rational objections dissolve enabling the emotional desire to be consummated.

The fact is, an expensive watch is a personal indulgence by any reckoning, an exquisite object of desire that is often hard to justify. After all, for less than the cost of each of the regular services you’re going to need on that new mechanical masterpiece you could buy yourself a new, top-of-the-range Apple iPod (think of it as a super-accurate quartz timepiece with a free music player attached). Perhaps it is its irrational extravagance that makes it such a delicious object of desire. There are, it seems, few possessions that can generate such emotional gratification and pride of ownership.

“To be considered a success in life…”, says French advertising guru, Jacques Séguéla, “…you must own your first Rolex by the age of fifty”. The legendary brand name, or that of a similarly evocative brand possibly more to our taste, and the expectation that it signifies is a promise to which we aspire and which we know will be recognised.

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Trust me, I’m a Bank Manager

bank-managerThere was a time when the bank was one of the pillars of the establishment. Together with the church, the military, the civil service and, at least in the UK,  the royal family and even (for much of the 20th century) the BBC. The bank was a dependable institution and the bank manager was as safe as houses – now he is about as safe as house prices!

Whatever happened? Is it any wonder that our society has become so disoriented and lacking confidence when its very foundations have been undermined?

We have, in short, been let down by those we used to trust. Trust is a precious commodity because there is a personal cost involved – we make ourselves vulnerable by depending on someone or something else. Any breach of trust, therefore, can leave us feeling angry, betrayed and disillusioned.

But we humans, however we dislike the idea, remain as dependent as ever on surrounding ourselves with things in which we can place our trust. As Maslow’s ‘hierarchy of needs’ demonstrates, we need to feel a sense of security and wellbeing and crave things that can be depended upon to live up to their promise. These used to be the pillars of the establishment, now these have been replaced by what we might popularly call ‘brands’.
From Apple to Omega, Manchester United to Virgin Atlantic, Swatch to BMW, Hermés to Tumi, our lives are not only dependent on trusted brands, but often defined by them. They advertise our values, even our beliefs. They are our personally-chosen pillars of our own individual establishment. If they let us down, we have the power to dump them, if they make us feel good we wear then and share them (we can ‘wear’ a BMW or a Mac simply by being consciously seen with them in public!).

Look at it this way, if you were a committed Mac aficionado and Apple did banking, wouldn’t you open an account? I bet you can already imagine what to expect when you walk through the door? The values, the attitude the service, the white space, the Financial Genius Bar and a gloriously tactile satin aluminium credit card? And how much you would (secretly) love to be seen using that card… If, for any reason, Apple doesn’t happen to float your metaphorical boat, substitute a brand that does and rewind to the beginning of the paragraph. I think you get the picture; we’re living in an individualised new world in which we are personally empowered to choose and maintain our own micro pillars, ones on which we can depend and which reflect our own lifestyle, values, vision and outlook.

The point here is not to lure popular brands into banking, rather to encourage banking brands to become popular brands. They ought to be working harder than ever to project the values that will generate trust and earn our critically-needed customer commitment and advocacy; instead, most of them still seem to be behaving like self-obsessed nincompoops. Balance the column inches on controversial bonus payments, payoffs and management incompetence against those on innovation, new initiatives or customer service strategies.

I’m guessing that if Apple did banking, the words: “trust me, I’m a bank manager” could, before long, take on an altogether more compelling tone!

genius