Longines - Consumer Insights

Part
01
of two
Part
01

Luxury Watch Buyers - Under 40

US-based MVI Marketing surveyed 1,000 consumers between the ages of 25 and 40 years old. The survey showed that high-end traditional watch brands were favored over the rest by respondents with a household income of $80,000 and higher.

Methodology

We could not find the demographic parameters regarding the geographical locations and occupations of under 40 luxury watch buyers. Moreover, we also could not find if people with certain occupations are more likely to buy luxury watches than other occupations.

We started the search by looking into the opinions of luxury watch buyers from sites like Medium and The New York Times. We also checked into customers’ opinion in luxury watch brands’ websites such as Rolex and Tag Heuer. From this search, we found an article that published the opinions of two under 40 luxury watches buyers. However, the two participants were based outside the US. When looking into customer testimonials in luxury watch brands’ websites, we could not find any opinion of common buyers of the product. All we could find were testimonials of celebrities who endorsed the brand. Moreover, we checked each of the brands’ annual reports in hopes of finding some relevant information about the given topic. However, we could not find any details about each of the brands’ buyer demographics.

We then looked into the luxury watch market in hopes of finding the needed demographics. We scoured reliable sources such as Deloitte, McKinsey, Wall Street Journal, and smaller marketing agencies such as JCK, Unity Marketing, and MVI marketing. However, all the sources tackled the overall information of the market, and no information could be found about specific age groups that buy the most luxury watches and which state they live. Similar results came out when we looked into luxury-market oriented sites such as Luxury Society, Bizz Bee Solutions, and Business Off Fashion.

After the extensive search, we concluded that companies were not willing to divulge personal information of their consumers when it comes to occupation, age, and area of residence.

We then decided to broaden the research criteria to the entirety of the luxury products market, and we also looked beyond the specific age group. From this search, we were able to find information such as which US cities had the highest sales of luxury retail goods or which income group was keen to buy the maximum number of luxury items. We included this in the research brief as additional findings.

The Under 40 age group

Those who were born in the years between 1981 and 1996 are about 23 to 38 years old in 2019. These people are considered to be part of the millennial generation. Moreover, according to a graph titled “The Generations defined,” those born between 1997 and 2012 are part of generation Z. These people are aged between 7-22 years old. It was found that these people are still dependent on their parents when making buying choices. So with this in mind, the researchers decided to use the millennial generation as their age group for this research.

Demographic Information on Purchasers of Luxury Watches of those aged Under 40

MVI Marketing, a company based in Austin, Texas, surveyed 1,000 consumers. These consumers are millennials aged between 25 and 40 years old. The survey found that luxury watches or high-end traditional watches are favored by consumers who have a household income of $80,000 or higher. The findings of the company relate well with the overall results in the US, which found that the luxury brand, “Rolex,” is the favored watch for people with a household income of $107,000 or higher. Moreover, about 6.2 million millennial households who earn at least $100,000 is becoming the target market for the luxury jewelry and watch industry. This is because they are predicted to be the largest emerging generational segment for the industry in the coming years of 2018-2020.

When it comes to location, it is not sure as to which region in the US has the highest millennial luxury watch buyers. However, a report from JLL’s article titled, “The New World of Retail Report,” found that the states of New York, Chicago, Las Vegas, Miami, and San Francisco reported the highest luxury sales for retailers in per square foot. Additionally, there are three emerging locations for the industry, and these are Dallas, Houston, and Orlando.

Moreover, the details about the occupation of millennial luxury buyers were not available. However, a report from Market Watch found that the wealthiest families in the US (or those who are part of the top fifth earners) spend about 65% of their consumption on luxury goods, while families who are in the middle-income bracket spend 50%, and those who are part of the lowest-income bracket only spend 40%. From this information, it can be assumed that people with occupations that provide high-income are more likely to purchase luxury watches. In addition to this, it was found that luxury watches are more famous in specific industries such as entertainment and sports. Sport figures like Lebron James and Kobe Bryant have their preference for luxury watches, which are the brands of Audemars Piguet and Girard- Perregaux, respectively. Other celebrity figures such as Kim Kardashian likes Rolex with Diamonds, while Leonardo DiCaprio enjoys the Tag Heuer Carera 16 Day-Date Chronograph, and Usher prefers the Rolex Milgauss brand.

Perception of Luxury Watches of those Under the 40 Age Group

It was found that in the US, equal proportions of Millennials purchase smartwatches and mechanical watches. However, for millennials who buy mechanical watches, they look for three important factors, and these are simplicity, personalization, and transparency.

When it comes to assessing the popularity of luxury watches among the under 40 age group, Deloitte found that the age group enjoys high-end Swiss watch brands. Specifically, the consumers within the age group would purchase an analog luxury watch over a digital smartwatch, when given USD 5,135. Additionally, a survey from JCK found that millennials have two brands they prefer when it comes to luxury watches and these are Rolex and Tiffany. It was also found that 39% of high-income earning teens prefer Rolex as their luxury watch brand.

Although there is no exact data about the purchase rate of millennials when it comes to luxury watches, it was found that watch collectors and enthusiasts in the US own about 2.5 luxury watches, with 30% of the given population owning three or more. In addition to this, luxury watches only take up 4% of every millennials’ jewelry box— however, this rate increases to 10% for millennials who are aged 35 and older. The rate is also expected to grow exponentially over the years.

Part
02
of two
Part
02

Luxury Watch Buyers - Women

Women have grown fond of men’s watches, and have started to claim men’s luxury watches as part of their fashion identity. However, the demographical information of women luxury watch buyers is not available, because men have primarily dominated the luxury watch industry, and it was only in 2017 where women had a growing segment in the industry.

Methodology

We started our search by looking into different research studies, databases, and articles about women buying luxury watches. These sources usually have the demographical information of a certain group towards a specific topic. We used reliable sources such as Pew Research, Delloite, The NPD Group, and other research firms. We also looked into research sites such as ResearchGate, Springer, Wiley, and others. However, the search proved fruitless as we were not able to find demographic research on women’s luxury watches. We were only able to find trends, and the size of the women’s luxury watches industry.

We then looked into statistical profiles found in Statista. In this search, we were only able to find the income of Americans that has a Rolex watch, the favored watch brand among upper-income teens in the United States, and the position of the United States in the luxury watch industry. None of these data were segmented by gender.

We then decided to look into financial reports of luxury watch brands that offer their products to women. The brands that were included were Rolex, Hermés, Patek Philippe, Cartier, Piaget, Audemars Piguet, and Dolce & Gabbana. After checking the financial reports of each company, we were still unable to find the proper demographics. We were only able to find the geographical segmentation of their sales. Additionally, the reports did not have a women’s watch category, and some companies included other products in the report aside for their luxury watches.

We also checked different review and blog sites that ranked products according to popularity. We looked for blogs about the top women’s luxury watches to see if any demographical profile was published alongside the blog. We looked into reliable sources such as Worthy, The Trend Spotter, Groom and style, Elle, Departures, and Luxury launches. However, these sites only provided descriptions about the brand, nothing about a certain demographic.

Lastly, we decided to segment the research based on specific demographic factors. First, we decided to look into the data of luxury watches based on generation groups, such as Gen Z, Millenials, Gen X, and the Baby Boomers. We were hoping to see the gender statistics of each generation and how they purchase luxury watches. However, we were only able to find specific marketing trends and strategy from this search. We then looked into luxury watches purchases of people in different professions. The only information we found in this search was different kinds of businesses that were often mentioned when it comes to luxury watches. We decided to move the search into different income levels, and from this search, we were only able to find the income segmentation of Americans owning a luxury watch. Lastly, we decided to look into the marital status of people who buy luxury watches. The only information we found from this search was the perceptions of mothers and single women on luxury watches.

After this exhaustive search, we concluded that the information about the demographic profile of women luxury watch buyers could not be found because men have always dominated the luxury watches market, and the women segment has only started growing late in 2017 and early 2018.

General Demographics

Only 2% of affluent Americans spend on luxury watches. These are likely to be married Americans, who are living in a household where both husband and wife are earning. Moreover, 39% of high earning teens are attracted to Rolex watches, and statistics have shown that more of the younger generation is interested in luxury watches. In addition to this, affluent millennials are driving the luxury watch market.

When it comes to income bracket, it was found that 33.3% of those who earn an income between $7,000 and $8,000 a month owns a Rolex. This is followed by those who earn between $6,000 and $7,000, and then those who make between $8,000 and $9,000.

Luxury Watches and Women

Women have shown interest in luxury watches, mainly men’s luxury watches. Women have started to enjoy men mechanical luxury watches, as they have grown tired of the simple, bejeweled, battery-powered watches. They are also willing to spend more for men luxury designed watches. Additionally, they enjoy the way it looks and how they are stylishly designed. Moreover, because of the growing trend, many men luxury watch clients found that their wives and girlfriends are “stealing” and wearing their watches.

Women’s interest in men mechanical watches is attributed to the shift of women into a more career and business-oriented role. Sandrine Stern, the head of the creation of Patek Philippe revealed that wearing men luxury watches had given her an advantage in the business world, as she uses it as a way to connect to people. A magazine editor also admitted that many women wear men’s watches in her field.

The trend is being driven by working women who can be found in boardrooms making corporate decisions. This is why the fashion world is starting to target “powerful” women who “act like men,” when it comes to their watches. Additionally, women in the entertainment industry have also started to wear men’s watches, particularly the Rolex series. These women use the term “boyfriend watch” whenever they wear men watches.

Women’s Luxury Watches Market

De Boulle Diamond and Jewelry admitted that 50% of their inventory is made for women. Moreover, WP Diamonds found that women now own more than one luxury watch compared to men.

Women have started to treat their watches as if they were jewelry, and have now started to collect different designs of luxury watches. They are also more inclined to selling or trading old designs for a newer and more fashionable designed luxury watch. Additionally, women enjoy three brands of luxury watches and these are Rolex, Cartier, and Omega. In addition to this, it was found that Rolex and Patek Philippe are driving the increased sales of women luxury watches, alongside other brands such as Audemars Piguet and Piaget.



Sources
Sources

From Part 01
Quotes
  • "Anyone born between 1981 and 1996 (ages 23 to 38 in 2019) is considered a Millennial, and anyone born from 1997 onward is part of a new generation."
Quotes
  • "An almost equal proportion of Millennials in the US would choose a smartwatch versus a mechanical watch."
  • "Millennials seek simplicity, personalisation and transparency when buying a high-end mechanical watch."
  • "A recent survey from Deloitte found that Millennials remain highly attracted to high-end Swiss watch brands. The research shows that Millennials would indeed favour an analog luxury timepiece over a digital smartwatch if given CHF 5,000 (USD $5,135) to spend on a gift watch"
Quotes
  • "Apparently, millennials love luxury watches. According to JCK, millennials actually favor traditional luxury watch brands like Rolex and Tiffany, despite not being the most affluent demographic."
  • "A new survey by MVI Marketing polled roughly 1,000 consumers between the ages of 25 and 40 years old (with a household income of $80,000 and higher) and found that high-end traditional watch brands were favored over the rest."
  • "The luxury market might still be dominated by older Americans, but millennials are certainly going to impact every high-end brand and industry over the next few years. As more and more millennials earn higher wages and accumulate more wealth, it’s likely that the entire outlook of the marketplace will drastically change."
Quotes
  • "In 2015 the U.S.A accounted for approximately 28% of the world’s total watch industry’s sales (336,000,000 units), which was near $11 billion. About 20% of the watches sold (67,000,000 pieces), were Swiss-made watches which belonged to the luxurious watches category. "
  • "According to Europastar’s interview where the information above is extracted from, the first couple of months of 2016 were followed by a slight decline in exports, namely 5, 4%. "
  • "The interview also explains that Apple, TAG Heuer, and Omega are the most popular watch brands in the U.S. Even though Rolex is not the most popular watch brand per se, it is definitively the most preferred, especially by higher income consumers with income as high as $107,000"
  • "In 2016, the Swiss watch exports to the U.S.A were estimated to worth somewhere around $2,263,613,438 according to information available on swissinfo.ch’s website. The leading player in the competitive U.S. watch industry is the Fossil Group Inc., holding dominion over 15% of the overall value share. According to the report from Euromonitor, Watches in the U.S., the watches value sales at a constant 2016 prices are expected to grow at a CAGR of 1% through the upcoming periods of time"
Quotes
  • "To begin by the basic numbers, there are about 6.2 million millennial households that report earning at least $100,000 annually. According to Unity Marketing, this group will take over as the largest generational segment in the luxury consumer market around 2018-2020. This is especially true for brands in the luxury jewellery and watch category."
  • "Today, watches take up only a 4% share in a millennial jewellery box. However, that number jumps to more than 10% for adults over the age of 35. As millennials are rapidly approaching the big 3-0 birthday, we can expect their timepiece collection to grow exponentially."
  • "However, the look and style of those watches will likely be vastly different from the classic looks that used to define affluence. “Every generation brings its own trend, its own taste, its own way living,” said Jean-Claude Biver, CEO of luxury watchmaker Tag Heuer in an interview for CNBC. “The younger generation is more disruptive."
Quotes
  • "This statistic depicts the leading watch brands amongst upper-income teenagers in the United States as of Fall 2018. The survey revealed that 39 percent of upper-income teens had a preference for Rolex watches."
Quotes
  • "New York, Chicago, Las Vegas, Miami and San Francisco rank at the top of the list, reporting the highest luxury sales in per square foot, according to JLL’s “The New World of Retail Report.” But while core metro areas ranked at the top of the list of preferred locations, several emerging retail markets like Dallas, Houston and Orlando possess the attributes for longer term success driven by ongoing population and income growth."
Quotes
  • "The wealthiest families (the top fifth of earners) spend around 65% of their consumption on luxury goods and 35% on necessities, according to the study, which looked at spending habits between 1984 and 2014. Middle-income households weren’t far behind: They spend 50% on luxuries and 50% on necessities. Even the lowest-income families (the bottom fifth of earners) spend 40% on luxuries and 60% on necessities, according to the study’s author, Torsten Slok, chief international economist for Deutsche Bank Securities."
Quotes
  • "So, what is this going to mean for luxury brands in watches and fine jewelry? How should these brands target Generation Z consumers? And which brands are already making waves? Gen Z has borne witness to the economic instability experienced by working millennials. As such, they are hardworking and pragmatic. They value financial stability and smart purchases. In an interview with Luxury Society, President of FutureCast Jeff Fromm said “they (Generation Z consumers) like to work hard for their money and spend it wisely. I think their appetite for luxury brands will be greater (than millennials)."
Quotes
  • " If the oldest Gen Z kids at this very moment are twenty-years of age, chances are they’re still attached at the hip (virtually, financially, or otherwise) to their Generation X parents, which is where a little reverse psychology comes into play. As a parent, I know not to suggest anything related to fashion to my twelve-year-old, however, what I noticed is that he notices what I wear, down to and including my watches, and his peers are also influenced by things their parents do and wear without admitting to their parents that they (the kids) kind of dig it. So, rule number one for reaching the Gen Z kids? Pull in the parents but do so by being a brand that has a proven reputation while offering solid product at a reasonable price. "
From Part 02
Quotes
  • "Once the exclusive domain of men gripped by whiz-bang micromechanical engineering and the status that comes with strapping a power toy around one’s wrist (along with a price tag approaching a small mortgage), increasingly women, no longer satisfied with simple, bejeweled, battery-powered watches, desire a mechanical timepiece with a technically complex movement of their own. Like their male counterparts, they’re also willing to spend upwards of six figures for the privilege."
  • "In part, the growing interest in mechanical watches among women reflects the broader shift of women coming into their own, entering the top echelons of business and politics, as well as expanding their buying power. “I have one female client who owns 30 Pateks,” says Denis Boulle, the CEO of De Boulle Diamond & Jewelry, based in Texas. “We opened our second salon in Houston two years ago, and 50% of our inventory is ladies’ watches,” he says. “That was almost unheard of; it shows how much this segment is growing.”"
  • "What women want, says Sandrine Stern, the head of watch creation at Patek Philippe, are timepieces with both substance and style. “When I speak with ladies, their first priority is how it looks,” she says. “They prefer complications that are useful, like a date indication.” While men, she notes, “like visible complications like a chronograph, something that looks high-tech. For them, it’s a bit like buying a sports car.”"
  • "What’s more, she says, “if I am wearing a watch, and I sit at a table with a bunch of men, they notice it. For me it has become a great connector in the business world. I’m a blond woman, and if I walk into a room, people have ideas about me. But this cuts through the small talk and draws people out. It becomes another point of discussion.”"
  • "After launching its men’s Annual Calendar in 1996, Stern says Patek began hearing from many clients that their wives and girlfriends were “stealing their watches.”"
Quotes
  • "When compared to men, women today tend to own more than one luxury watch. Similar to jewelry, women like to collect different styles of timepieces to wear with different attire—a dressy watch for formal affairs, a man’s oversized watch with lots of complications for casualwear, and everything in between."
  • "Women are also more apt to selling or trading-in one of their luxury watches in favor of owning a new one that is more up to date."
Quotes
  • "Ms. D’Arpizio said that fashion houses are better equipped to target “powerful women, who are more and more acting like men in their search for watches.”"
  • "That view was echoed by Laurent Dordet, chief executive of La Montre Hermès, the French fashion house’s watchmaking division. “In the past, women were buying watches more for the aesthetics, the diamonds and precious materials,” he said. “Now, they are also looking at the movement and the technical expertise. Women are indeed better informed and have become increasingly fascinated by mechanical watches.”"
  • "But when it comes to stealing market share from the established watch brands, fashion houses still fall short, Mr. Sadigh said, noting that brands like Rolex, Cartier and Omega lead the women’s segment by large margins."
Quotes
  • "Sales of high-end watches also bolstered the overall growth in the women’s watch category in January through May 2018. Women’s watches selling for $10,000 to $25,000 rose 17 percent over the previous year, while sales of watches selling for $25,000 and more grew 16 percent. “Rolex and Patek Philippe drove most of the sales increase within the highest price segments,” Brack said. “However, Audemars Piguet and Piaget also contributed to the women’s watch resurgence at the high end of the market.”"
  • "While we have been tracking the growing trend of women buying men's sized watches for some time, sales of smaller watches for women also skyrocketed this year"
Quotes
  • "The survey revealed that 39 percent of upper-income teens had a preference for Rolex watches."
Quotes
  • "Both experts said watches are seen as fashion statements, and they’re seeing trends like more women buying and wearing men’s watches."
Quotes
  • "High-end mechanical watch sales have grown again since the second half of 2017, driven by strong demand in Asia and from affluent Millennials."
Quotes
  • "A lot of women in my field wear men’s watches,” says Cara Barrett, an editor at Hodinkee, the online magazine for watch enthusiasts."
  • "Although stylish women have been poaching men’s timepieces for years, adding instant swagger to any outfit, these days they’re the go-to among watch aficionadas, and not just for their implied status or rugged good looks."
  • "Hugh Taylor, a watch expert at British dealer Xupes Limited, has been tracking the trend since the mid-2000s. “Women have been wearing men’s Rolexes, particularly the Datejusts and Day-Dates, since they first flooded the Who’s Who market in the ’40s and ’50s,” he says. “The more extraordinary scene was when women started strapping on the sports models, which were definitely first intended for the male market,” roughly a decade ago. “By 2010, a bunch of celebs were doing it, and people were using the term ‘boyfriend watch.’ ” Barrett also noticed more female celebrities with men’s watches, “particularly the Rolex Daytona.”"
  • "If you look at the big brands, there are many famous women or sportswomen or actresses who are ambassadors"
  • "This appreciation for substantial, practical timepieces mirrors the shift in women’s lives over the last few decades. “Women aren’t staying home and hosting lots of cocktail parties anymore,” Barrett points out. “That is reflected in the change of the style of watches that women wear. More women are in boardrooms, more women are working, more women are doing thousands of things.”"