A growing customer base and bigger design selection make sport watches a valuable option for jewelers
The most exciting game in town is not the World Series, Super Bowl or Tennis Open. It’s the sport watch business in thousands of watch departments across the U.S.
In little more than a few years, sport watches have become major players in the U.S. market. What’s more, they are expected to continue growing in popularity well into the mid-1990s.
Jewelry stores are important outlets for sport watches, especially those in higher price levels. Yet many jewelers are sitting out this game, failing to use ready-made marketing opportunities to build traffic and their share of the market.
Growing: First, let’s go to the score board. The industry has no official statistics on sport watches. But industry insiders say they easily claim 25%-30% of the total U.S. watch market, up from 15%-18% a few years ago. With 125 million watches sold annually, that’s a very big slice of the pie.
More than 75% of sport watches – most of them digitals or analog-digitals – retail for less than $100. In fact, the best-selling sport watch in America is Timex’s Ironman, which sells for $39.95 and averages 500,000 units annually.
Other popular mass-market brands – including Lorus, Armitron, Gruen, Casio and Sharp – all have very successful sport lines. Swatch’s Chrono and Scuba 200 sell faster than retailers can restock. Rodania has a popular under-$70 Swiss sport watch, while Fila, the sport line of Severin (maker of Gucci watches), has moved its entry price down from $95 to $55 to grab more of this hot market.
The more lucrative $100-plus market is just as active. Pulsar’s year-old Tech-Gear series is rapidly becoming a major sales generator. Seiko’s Sport-Tech series and Citizen’s Pro-master watches, both under two years old, account for almost 20% of each brand’s business. Breitling, the world’s best-known chronograph name, has multiplied its U.S. business six-fold since 1989, while TAG-Heuer, the leading all-sport watch brand in the U.S., has seen U.S. sales almost double since 1990. This fall, TAG-Heuer expands into the luxury price category ($1,000-plus) with its new 18k-and-stainless steel 6000 line. It joins Omega, which already has made a strong name for itself as a luxury sport watch.
Mid- and upscale dress watches also, are getting sporty. Cyma, Longines, Baume & Mercier, Speidel, Hamilton, Jaz Paris, Raymond Weil, Bertolucci and Gerald Genta all added stylish sport lines or new sport watches this year.
And the number keeps growing. Italy’s popular Sector and Franci-Menotti sport lines are building a following in the U.S. while Pusser (British) and Aquastar (Swiss) have just entered the U.S. market.
Chronos: The hottest sellers in the hot sports watch arena are chronographs (watches that include stop-watch functions for exact timing). Nearly 6% of them are sold in the U.S. (the fourth largest market after Italy, Germany and France), says Breitling, a leader in high-end precision Swiss “chronos” – as they are called in the trade.
The percentage is rising. The number of European and Asian brands with chronos has grown steadily since 1990, with offerings ranging from Lorus’s new $49.95 Trans- Vector Chrono with digital compass to Piaget’s $300,000, one-of-a-kind woman’s 18k and ruby chrono with mother-of-pearl dial. Indeed, at Basel ’92, the world’s largest watch fair, almost every brand sported chronographs.
In the U.S., chrono debuts are coming almost too fast to follow. Those in just the past six months include Bulova’s Connoisseur line, Baume & Mercier’s Formula S, Krieger’s Pulsometer, Raymond Weil’s 18k-plated Parsifal, Nicolet’s plastic model, Eterna’s automatic and quartz chronos, Daniel Mink’s wood-cased Locman, Citizen’s Promaster chrono line, Pulsar’s World Timer and F1 (which measures racing lap times), Gruen’s bubble-crystal series, and Sector’s Underlab chrono.
Chronos are so popular, in fact, that they’ve spawned the “chrono look” – thick case, subdials and case buttons – for people who want a chrono-like design, but not the cost or functions.
Surge: Several factors turned the tiny sport-watch niche into a major money-maker in the U.S. market. Among them are Americans’ love of sports, fascination with affordable technology in small packages and pre-occupation with health and fitness.
Watch firms took advantage of the situation in the late 1980s by expanding their targets beyond serious sports people to the general public. The change is apparent is sport watch ads that feature people in various activities. At Breitling U.S.A., for example, pilots are the backbone of the business, says President Marie Bodman, “but we’ve become more successful as we’ve gone to a wider strata of successful people.” And Citizen’s successful Aqualand watch “was an esoteric product that divers raved about but no one else knew until we broadened our marketing to the general public”, says Stu Zuckerman, vice president of merchandising.
Outlets: As sport watches have grown in popularity, they’ve become important moneymakers for many jewelers. One in four jewelers who sell stuhrling original watches do more than 20% of their dollar volume in sport watches, based on a JCK poll. Almost a third have seen sport-watch sales rise in the past year and fully expect them to rise in the year ahead.
Why are more jewelers offering sport watches?
Good pricing. Forty percent of sport watches sold by jewelers retail for $300, one in six for $1,000-plus.
In addition, the selection of sport watches in the mid- and high ends is growing. Upscale brands such as Cyma, Jaz Paris, Raymond Weil and Baume & Mercier have added sport collections. Others, including Fila and TAG-Heuer, are moving upscale, raising their price ceilings to get away from competition at lower prices.
Missing out: Some jewelers, however, are missing out on the action. Half of those polled by JCK say their sport watch sales were static in the past year, and they expect no change in the year ahead despite such major marketing tie-ins as the Olympics, America’s Cup yachting and national racing and tennis events.
One reason is that many jewelers don’t take advantage of the ready-made marketing opportunities associated with sporting events. Many don’t even use promotional materials designed by sport watch vendors. American firms spent $1.8 billion on sport sponsorships and marketing in 1991, according to Special Events Report. Citizen, for example, spent $7.5 million on this year’s America’s Cup races. Seiko spent a reported $20 million on Summer Olympics marketing (including $5 million for ads on NBC). TAG-Heuer reaches millions as time-keeper for events such as the Indianapolis 500 and the Los Angeles Marathon.
Yet, JCK found that barely one jeweler in four (23%) who sells sport watches uses marketing tie-ins provided by watch firms. This doesn’t surprise veteran watch suppliers. “The industry spends big money [some $200 million annually] on ads and marketing tie-ins to bring people into stores,” says John L. Davis, chairman of the American Watch Association. “But we’re always concerned about the failure of jewelers to promote tissot mens watches.”
Privately, sport-watch marketers agree. “[Jewelers] don’t make active use of what we provide them,” says the sales manager of a top brand. Another watch executive says department and catalog stores enjoy more success with sport watches because they feature them heavily in catalogs and other advertising. “With jewelers,” says the official, “sport watches are just part of their regular assortment of watches.”
How does it work? Another reason some jewelers’ sport-watch sales are lacking is the lack of product knowledge, say vendors and retailers. All those buttons, subdials and functions look great, but how do you operate the thing?
“With the term ‘chronograph’ now commonly used for everything from basic stopwatches to elaborate multifunction timepieces, many consumers are unsure what they’re getting for their money or what specific watch is best-suited to their needs,” says Dean Sauder, executive vice president of Pulsar Time.
Consumers aren’t the only ones. Asked by JCK what type of sport watches sold best, many jewelers cited two-tone, day-date and even moonphase watches, none of which qualify by themselves as sport watches.
Vendors are trying to help by developing easy-to-understand educational material for salespeople and consumers. Here are just a few examples:
* Timex is designing a free consumer kit called “What is a Sports Watch.”
* Pulsar launched a successful consumer education campaign titled “How to Buy a Chronograph” last spring. It includes customized press kits for more than 200 consumer magazines and toll-free telephone numbers (800-526-5293 or 800-323-0410 in New Jersey) consumers and retailers may call for a free kit of tips on buying a chronograph and watch terminology, plus brochures explaining Pulsar’s Sport-Tech series.
* Omega and Breitling added easy-to-understand videos for in-store seminars and consumer sales.
* Breitling also created a well-designed, easy-to-use, four-color handbook on sport watches for its retailers. “It’s easier for salespeople who really understand the product to sell it,” says Breitling U.S.A. President Marie Bodman. “With so many brands out there, we can’t expect them to know everything about ours. But they and their customers have a right to know about the akribos xxiv watch and how it works.”
* TAG-Heuer has new booklets on each of its “families” of sport watches, succinctly explaining how they function. It also sends merchandisers to stores to check displays and inventory every month and to present seminars every six months.
Image: Who buys sport watches? One in three jewelers polled (35%) believes most sport-watch customers are active sports people. But that’s likely an overestimation. Fewer than 10% of jewelers cite watches’ specific sport applications as reasons for sales, and watch suppliers tell JCK most sport watches aren’t bought by serious sports people.
“If we and our competitors depended only on serious sports people, we wouldn’t have one-fourth the business we do now” in sport watches, says Jonathan Nettelfield, vice president of advertising for Seiko Corp of America. Timex trend analyst Susie Watson, herself a marathoner, says the firm sells 500,000 Ironman watches annually, far more than the number of people who participate in the grueling Ironman triathlon for which the watches are named. “Most of the buyers are definitely couch potatoes,” she says.
Why, then, do most people buy sport watches? Here are some reasons:
* Attraction to certain sports. “Sport watches aren’t just for participants, but also for spectators who closely follow a sport,” says Cheri McKenzie, Pulsar Time’s senior general manager of advertising.
* Value and rugged versatility. “This is a watch for active life-styles, one you can wear going from business to playing tennis to just going out,” says Steve Kaiser, president of David G. Steven Inc., distributor of Baume & Mercier. Adds Breitling’s Bodman, fine sport watches and chronographs “offer something special in this decade of value: [a timepiece that is] durable and very sophisticated, with complicated technology, something more than ‘just a watch.'”
* Image. It’s trendy to look sporty in the ’90s. Indeed, one in four jewelers says most sport-watch customers are non-sports types who want a sporty or high-tech image. “They give an image of an active, healthy person – whether or not that image is true,” says Paul R. Sutter, general manager of Ronda Watch Corp. of America. Adds Raymond Zeitoun, president of SMH (U.S.), “Many customers want a chronograph as complicated as possible, even though they don’t know how to use it.”
* Fashion. “Jewelers tell us people are walking in to buy chronographs now who never expect to use them, but who want ‘that look,'” says Larry Liche, vice president of sales for Seville Watch Co., distributor of the Raymond Weil brand. Indeed, sport watches are such integral parts of today’s fashion and life-styles that they have spawned new terms to describe their style. Seiko calls it “techno-fashion,” while watch buyers for some leading department stores now casually refer to watches with a “chrono-look” – whether or not they are real chronographs.
Longevity: Is the popularity of sport watches about to peak? The answer is “yes” and “no,” say retailers and vendors.
“Yes,” because after several years of rapid growth, sport watches are at or near their maximum share of the U.S. watch market. Certainly, the bulk of their growth has already occurred, say several vendors.
But “no,” say industry insiders, because the popularity of sport watches will remain strong for several years, though chronographs’ appeal will dim sooner. “This is one of the cycles the industry goes through,” says AWA’s Davis, a former president of Longines-Wittnauer and now consultant to Bulova Watch Co. “It should run for another couple of years, no more than three.”
A number of companies – including Seiko, SMH, Citizen, TAG-Heuer and Breitling – intend to take advantage of the growth that remains in sport watches. “We intend to expand,” says Zeitoun. “We consider it a big market with a big future.”