Many jewelers paid attention to stably developing watch market in the difficult time of economic crises, rises in prices of precious metals and decrease in buyer activity at the jewellery market. It appeared that the business diversification by creation of watch show-windows within the shop, "islands" in the shopping center and even opening of specialized watch shops – is logical and perspective. As the maintenance of watch business which is parallel to jewellery became not an individual phenomenon (about experience with watches – both jewellery, and steel – we wrote in the previous issues of "Navigator"), we will quite explain the interest of jewellery public to the events happening at the watch market.
What are the prospects of its development? How active is the consumer audience? What watches are in trend today and why? On what to stake, forming the autumn and winter range?
We addressed all these questions to participants of the round table – to experts of watch business.
We represent the participants of the round table.
Dmitry Koltunov, the general director of fashionable watch salons network TIME CODE
TIME CODE is the largest watch network in Russia focused on the fashion direction. About 60 % of the range are fashionable watches. In 2012 the company opened 11 new salons, including seven on franchising system. Now there are 22 TIME CODE salons in Russia. Among the most active regions are Komi Republic, Samarskaya region, Rostov-on-Don, Saratov, Moscow and Moscow region… In other words, Southern , Central, Volga and North-West Federal districts of the RF.
The target audience of the salons is men (40%) and women (60%) from 18 up to 50, who have average and above average income.
There are about 40 brands in the TIME CODE portfolio. Among them ANNE KLEIN, BENTLEY, CHARMEX, FRENCH CONNECTION, GF FERRE, GIVENCHY, GUESS, HUGO BOSS, JENNIFER LOPEZ, JUST CAVALLI , MORELLATO, MORGAN, PHILIP WATCH, PIRELLI, ROBERTO CAVALLI, ROCHAS, RODANIA, SECTOR, SECTOR EXPANDER, TIME FORCE, VALENTINO, VERSACE, VERSUS. The range of shops is updated weekly.
Ruben Zenyan, the deputy general director of the Trading company "Vest Alpha"
Trading company "Vest Alpha", an exclusive distributor of the leading world jewellery brands on the territory of Russia, represents two distribution networks for sale of jewelry and accessories – LeCadeau and GLAM.
Business promotion strategy is based on the continuous enrichment of assortment line with new brands and unique positions as well as the increased presence of retail chains in the regions.
For today the networks of LeCadeau are presented in the major developed regions of the Russian Federation.
The most active regions from the point of view of cooperation are Vladivostok, Krasnodar, Rostov-on-Don, and Sochi. Among the reasons is the high level of real income and dynamic lifestyle of the population, proposing the consumption of a wide range of non-food goods.
In the nearest plans is LeCadeau’s entrance to the jewelry market of the CIS states. Active expansion of the presence of GLAM in cities-millionaires.
Marina Nikolaeva, the brand manager of the company Slim Group
The company Slim Group has been working at the Russian market for 16 years. It represents 4 watch brands: Appella, Continental, COVER, ELLE Time.
The target audience is: men, women from 20 to 60, teenagers from10 up to 18.
Cooperates with stores on the entire territory of Russia: Vladivostok, Irkutsk, Ufa, Ekaterinburg, Chelyabinsk, Nizhny Novgorod, Murmansk, Moscow and Saint-Petersburg. Cities-millionaires show the best results. In recent years in connection with the increase of living standard and the development of the infrastructure the volume of sales has significantly increased in Nizhny Novgorod.
Anastasiya Dedova, the marketing director of the company "NIKA"
"NIKA" is the leading Russian producer of jewellery watches. The company’s unique selling offer is usage in production of reliable, Swiss and Japanese mechanisms, which are recognized around the world, exclusively precious materials and the unique patented technology «Case in case», wide range, and also a wide distribution network across Russia.
The target audience of jewelry watches and accessories of NIKA is wide enough because of a diverse assortment presented in different price segments. The age of the consumers is from 18 to 55. Studies show that 80% of NIKA watches are presented as a gift to children on entry to the university, parents on the anniversary... And this also expands the audience of the brand. At the same time the core of the target audience is strong middle class: men of 25-45 years old with higher education, professionals, middle and top managers, - intellectual, making conscious choice of things and accessories not indifferent to their design.
Let's sum up intermediate results of the year. How did the Russian watch market feel in the first half of 2012?
Dmitry Koltunov, TIME CODE
In global sense the current year passes more positively, than analysts predicted. Though, it began rather inertly. The balanced February came after strong January. Holidays of February 23 don't give such sales any more, as earlier (plus 10 % in comparison with January). In recent years sales volumes in February show only 2-3 % of growth. In March we, of course, observed growth – after all, nobody cancelled Women's Day. But only 25 % (earlier the growth of sales in March was more appreciable – plus 40-50 %). April and May passed smoothly. But in June we felt appreciable splash (plus 10 %); in July the tendency was fixed – plus 15 %. And on this positive wave of stable growth we lived for the whole summer. With what is it connected? People felt stability and started to spend money. The summer was always a good time for watchmakers – open dresses provoke purchasing watches. But this year, perhaps, for the first time after crisis – the volumes pleased us.
Marina Nikolaeva, Slim Group
Despite the falling of interest to watches per the period of the economic crisis, demand for classical models remained stable – recently classical models became popular in sports version. Demand for fashion-segment raised in the spring: bright colors and unusual forms perfectly fill up spring- summer images. And the main thing - the price for fashion-models is very attractive: up to10 thousand rubles. As a result the consumer has the opportunity to buy not one couple of watches.
In other words, consumer demand for models of rather inexpensive segment grows. Watches are the conventional attribute of the accessory row, and the buyer began to buy them more often.
Anastasiya Dedova, "NIKA"
In crisis 2008 our company made for itself unexpected and very pleasant observation: as it appeared, people didn't begin to buy less watches! Then consumers just reoriented – instead of expensive gold watches they started to choose silver and tiny gold models of light weight. Return of interest to a gold watch of the high price segment was outlined at once after crisis, and this interest continues to grow.
One more remarkable tendency of the last three years is stable quarterly increase of gold watch import in pink gold. Europe is famous for white gold, the Arab countries for yellow one, and the production of pink gold always was always considered traditional for Russia. However, in recent years the foreign exclusive models made of this material more often began to come to our market. In comparison with the domestic production of pink gold the similar import one costs for the end consumer more expensively therefore it is possible to draw a conclusion that welfare of the Russian buyer recently only grows.
What watch brands of those that your company represents are in maximum demand? What do you connect it with?
Ruben Zenyan, "Vest Alpha"
Among the most popular brands are Kenzo, Cacharel, Zeades, Baldessarini. All of them belong to the segments "medium", «medium plus». There are some reasons of heightened interest of audience to these brands.
1. Behind each brand there is the world famous fashion house which sets in the assortment portfolio contiguous commodity segments. It gives the chance to brand adherents to receive total look, to create the finished image and to feel participation in rich history of art achievements which bears in itself each item of above-mentioned brands.
2. Seasonal collection renewal according to the latest fashion trends, wide variability of models and the reasonable price allow considering watches as a fashion-accessory, creating a personal collection according to the current clothes.
3. Sale conception. "Vest Alpha'" company realizes the project Brand Jewelerry Concept Watch which basis is made of the jewellery collections of famous brands having watches in their range– Kenzo, Ted Lapidus, Cacharel, Misaki, Guy Laroche, Zeades, Baldessarini.
Dmitry Koltunov, TIME CODE
Among fashion-brands of medium price segment the brands Anne Klein, Hugo Boss and Time Force are in the greatest demand.
In the segment "lux" – Versace, Rochas, Valentino and Pirelli.
The remarkable growth of sales was outlined in the Swiss classics. In particular, for brands of Rodania, Philip Watch and Charmex. Rodania is a famous Swiss brand. In production they use hi-tech ceramics with sapphire glasses. Philip Watch is time-served, positive, they are popular and recognizable thanks to high quality of realization and materials, plus distinguished stylistics. In Italy, for example, this brand is number one among adherents of business style.
Marina Nikolaeva, Slim Group
Each of our brands finds the buyer. For example, Appella in the most part is focused on production of classical models. The actual combination of the price and quality makes the brand available for the buyer.
The men's collection of the brand Continental is executed in austere classical style and women's one is more presented by models in fashion style. Both brands for a long time of existence at the Russian market (more than 20 years) showed themselves positively. They took a well-deserved place in the medium price segment which remains popular with buyers.
The brand Cover successfully combines all three trends: classics, sports and fashion.
The collections present models of medium price category up to 15-20 thousand rubles and lux category –up to 60 thousand rubles. Thanks to flexible price and marketing policy the brand attracts the wide consumer audience.
The brand ELLE TIME belongs to the fashion-segment. The good demand for ELLE is caused by attractive cost for consumers and actual stylish design of models. The brand advantage is a wide model range. Every woman from 15 to 60 years can find a fashionable accessory.
What watches with relation to design appeared the most popular with consumer audience during the season of 2011/12?
Ruben Zenyan, "Vest Alpha"
In the spring the flower motives in the form of print or an ornament on the case, the face and the band were popular. The season colors corresponded to prevailing podium shades– pastel (menthol, lavender, pale lemon etc.), and also neon accents, an orange spectrum: from cinnamon and brick to the coral. Non-standard materials for bands are pearls, ceramics, rubber, soft fabric bracelets, wristlets, multitier chains.
During the season of 2011/12 geometrical forms, natural materials were in high demand. Superfluous details and elements of åpatage were absent. The austerity and massiveness prevailed in women’s models, courage of color solutions and demonstration of internal mechanisms in men's.
Dmitry Koltunov, TIME CODE
At the beginning of this year the cases of steel (silvery) color are the most popular choice. The bands are of black color, and also uncharacteristic for a cold season – white. By the way: black bands held leader positions not for one season.
Today buyers again show interest to a gold coating of watches. As for bands, here people became more courageous for experiment. Instead of the black-and-white bands there were many coloured ones: violet, red, orange …
Anastasiya Dedova, the marketing director of the company "NIKA ":
Watches are an integral part of the fashion world. Autumn and winter collections are traditionally more reserved, classical that is expressed, for example, in black faces, white and pearl colours. People are magnetized with classics in a silver and a gold frame.
As soon as the spring- summer period begins, the world of fashion and accessories is characterized by riot of color and it is possible to observe change-over of consumer interest for brighter models with coloured faces and bands.
Marina Nikolaeva, Slim Group
In women’s collections the models of a tasty chocolate shade were the most actual. In men's the peak of sales fell on models in the steel case with a black band, but the models in the yellow case don't give their ground, variants of bands are black, brown. Also the combination of a steel case and a white band became the extraordinary popular combination of spring-summer 2012. This season white colour became one of the trends. As materials for bands and bracelets they use leather, sateen, rubber and ceramics.
If to speak about concrete brands, for example, the elegant woman's chronograph with Swarovsky stones on the face was popular in the collection Impressions (the brand Cover). There is more budgetary model on a sateen band of metal under pink gold in the collection Reflections.
What models, in your opinion, will be at popularity peak in the autumn-winter 2012–2013?
Ruben Zenyan, "Vest Alpha"
Woman's collections will be filled up with new models with a large-sized case – a trend keeping its positions not for one season on a level with massiveness and austerity of lady’s watch. Such models are presented in the collections Zeades, Misaki. Decorating by crystals in combination with brilliant lacquered bands gives feeling of luxury and chic which the women of fashion don't intend to leave even in 2013. The delicate placer of the Austrian crystals decorates faces of watches Zeades. In watches Kenzo contours of a floral ornament are laid out with crystals. In the models Misaki the shine of crystals is organically combined with a magic floating of pearl mosaic.
One more trend of the season is a combination of several colours in one model. Thus, monochrome models don't give their ground. Black is the main color of this season, leather is the main material of the season. These trends are outplayed by Ted Lapidus antheming the black color and laconism of geometrical lines, and also Zeades which trademark is the combination of steel and natural calf leather.
In man's models everything is quieter and more obvious. Still, classical models of traditional square without superfluous functions with invariable attributes in the form of a leather band of brown or black color are out of trends. They are Guy Laroche, Ted Lapidus, Zeades.
The round and the barrel-shaped case is a trend of 2013. It is supported by Ted Lapidus, Zeades. Designers pay special attention to the sports watches, notable for reliability of material, waterproofness of the case and crashworthiness. Such models are offered by Baldessarini Fashion house. A green hand on all models and a winder of nephrite are the feature and a firm brand mark.
From the unusual – bands of leather of white, brown or gray colours, and also lacquered and imitating the skin of exotic animals. Some faces in one model and a bold color palette.
Marina Nikolaeva, Slim Group
The classics and pastel tones again come to the fashion. Fashion designers as if they were tired of riot of summer colours and offer reserved colour combinations. The tandem of black and gold will be popular in the winter. Besides, it can be expected that also trends of last summer in many respects will remain in the coming autumn-winter season. Designers look for inspiration in their last collections – clear forms, laconic design without the additional details distracting from the main contours …
Feminity and romanticism of women’s watches will remain during a cold season too. Elegant forms on delicate bracelets will be still in demand.
The models added with fashionable accents, – an original reset head, stones on the case, unusual execution of date window are interesting …
In man's collections classical style will also be popular. Emphasis is on brutal models.
In general, popularity of classical models remains at such high level, as it was. The classics is always popular, and over the years it remains in demand, and demand only grows. The classical models of mechanical watches and quartz models of chronographs also remain at popularity peak.
Dmitry Koltunov, TIME CODE
The general tendency of a coming season is the interest to classical models in gold color.
As for a band, it is possible to ascertain: the trend on white now approaches to the peak. Respectively, from the next year, most likely, demand for white bands and bracelets will fall down. Following market condition, we amplify in a classical Swiss segment. We actively advance such brands, as Philip Watch and Rodania.
I assume also heightened interest of audience in a novelty – to eco-friendly watches Sprout (it is caused by updating of the questions connected with ecology). They are completely executed from natural materials (in particular, cases – from corn rubber) and, according to our forecasts; they will soon press the budgetary plastic models.
What do you think about the nearest future of the watch market? Your forecasts for the forthcoming season …
Dmitry Koltunov, TIME CODE
Due to Russia's entry to the World Trade Organization the number of foreign companies will increase at the market. Foreign players actively invest in the market, opening the representations. Further, we, possibly, will see salons of the largest international watch retailers in the Russian shopping centers.
The consumer demand will grow not less actively. Here is the example: when FTC «Mega White Dacha» opened, we were among the first who opened the watch salon there. Today in "Mega" there are not less than seven salons, trading for watches, however thus the revenue of our salon didn't decrease. It is an objective indicator of demand increasing.
The culture of wearing watches grows. The market develops. But if to compare Russia to Europe, we still must raise and develop for about 10 years to reach its current level. So the potential of the market is very great.
Marina Nikolaeva, Slim Group
The watch market actively develops. Every year there are new interesting brands, foreign designers don't stop surprising and interest buyers in new models. Also thanks to active advertizing projects the consumer demand constantly grows. The number of people for whom watches become the integral accessory increases. If to speak about our company, for the last years the quantity of sale outlets increased in times. And it is the main indicator of that consumer interest to watches constantly grows, and with it –our sales.
The summer is over, therefore the demand for bright fashion models will decrease a little, as leaders of sales there will be the models of classical style. According to sales the watches of medium price category from 10 up to 20 thousand rubles are in the lead now. The majority of buyers will prefer to get some models at medium cost, rather than expensive one.
Ruben Zenyan, "Vest Alpha"
In conditions of the difficult market situation one of the most actual tasks facing the companies is keeping and as far as possible revenue increasing. Qualitatively constructed sale policy is the generator forming a positive tendency to increase the market share. The last project of "Vest Alpha" in this direction is Marketing Communication System: the system of effective consumer interaction by means of the complex of marketing tools (its participants are networks of jewellery boutiques LeCadeau and GLAM and the partner enterprises). Behind creation of the global loyalty program assuming attraction and exchange of new clients and increase of the mutual status of partners, there is a topical task– to create an interesting environment for the end user.
Photos are provided with the companies – participants of the round table.