Luxury watches: the entry level is the new battlefield

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Pin notes that Bulgari does not have a “pyramid scheme” with a large number of products at entry-level prices. “But, we provide access, and that’s what’s really important. We do not close the door to people who want to buy our products, and in particular our iconic products.”

Another point in favor of entry-level watches, according to Pin, is their ability to drive volume sales, benefiting businesses and the market as a whole.

Perhaps the focus on entry-level watches is starting to show through in the data. Exports of Swiss watches priced between €500 and €3,000 steadily decreased between 2018 and 2021 (by 16%, from 3,689,000 to 3,087,000 units), but the first half of 2022 alone shows growth in this price category of 6 percent.

High-end luxury and entry-level luxury can both thrive

Breitling is one of the brands looking to expand at both entry-level and high-end prices. According to CEO Georges Kern, the sporty entry-level Endurance Pro lines and the high-end Premier Heritage and Super Chronomat lines were “hugely successful”.

The positive trend in entry-level watch sales is also being reported by manufacturers specializing in the segment, such as Hamilton, owned by the Swatch Group, which CEO Vivian Stauffer says has sales up 20% on the market. whole market.

However, in a time of likely broader economic downturn with high inflation, it’s high-end brands with entry-level products that may be best positioned to thrive. “During a recession, consumers normally focus their spending on big brands,” said Luca Solca, senior luxury analyst at consultancy Bernstein.

For all watchmakers concerned with remaining competitive on the entry-level market, careful management of the impact of inflation and currency fluctuations is essential to stabilize production costs. Some brands, like Rolex and Audemars Piguet, have raised their prices. Others are looking for efficiencies in the manufacturing process to avoid repricing.

At Bulgari, the latter approach is given high priority at all levels with its products. “We are working on new techniques, new ways of producing. We work a lot on efficiency,” says Pin. “There is a psychological component to inflation, so it’s important that customers are happy with their purchases at any price point.

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