Given weak job prospects and rising GINI co-efficient, the Millennial Generation isn’t flush with cash. Studies show that millennials earn USD2000 less than their parents did in the 80s adjusted for inflation, netting on average USD31,000 to UDS35,000 per annum. Add to the fact the ubiquity of laptop, tablet and smartphone devices in this digital age and you have the perfect storm of an entire generation of consumers turning their noses at USD2,000 TAG Heuer watches. Thus it can be opined that, quartz is the future of the industry (but not in the way you think).
In December 2012, a reporter for the Kansas City Star asked a table of 4 community college students, a mix of working adults and youth for the time. Of the four, only one gave him the time off the wrist and the others simply read time off a laptop, an iPod touch and a cellphone.
Similar studies by BBC and market monitoring firm Mintel, surveying over 15000 people in the UK, 14% proclaimed no need for a watch. When 15 to 24 year olds were queried, that percentage double. Extrapolate the figures across the Kingdom of 7.2 million people, and the numbers are terrifying. When correlated with the astounding growth of portable digital products – phones, laptops, MP3 players – all equipped with time display, it seems the demise of the mechanical watch industry, spurred by a generation of consumers agnostic to the idea of prestige luxury timekeeping, is all but confirmed. But is it?
According to market monitoring firm LGI Network, sales have been tilting towards moderately priced fashionable watches rather than pure watchmaking brands. As long as a brand is marketed right (instagram, tumblr, pinterest) the cachet of “luxury watch” applies even to sub-USD500 quartz watch brands. In this sense, brands like Uniform Wares watches founded in 2009 represent a saving grace – Quartz IS the future of the industry.
Reason One: Why Quartz is the future of the Industry
Tired with the constant stream of hyper-lux “statement watches” like Hublot and Audemars Piguet, Uniform Wares co-founders Patrick Bek and Oliver Fowles designed minimalist, quartz powered affordable timepieces which while not the kind of thing real collectors respond to, is perfect for the market they are targeting – the mechanical watch agnostic millennial, the watches may be bereft of a mechanical soul but they look exquisite on wrist and most importantly, these quartz watches are getting young professionals and kids into the habit of wearing watches again.
Designed in the brand’s London studio, the internationally sourced (read: China) components are assembled in Switzerland with ETA Quartz movements – allowing Uniform Wares to carry the prestige label “Swiss Made”. With two collections: The M-Line retails for $400-$1,100, while the C-Line retails for $600-$1,350. Both collections are relative steals compared to those of other watchmakers, the results are telling – a 50-50 split with eCommerce and retail sales through luxury departments Bergdorf Goodman and Barneys, the modernist brand has accrued 50% year on year growth since 2012.
And then there’s Daniel Wellington, a brand founded in 2011 by Filip Tysander which follows a similar playbook and strategy. Astute social media promotion and word of mouth has seen Daniel Wellington quartz watches turn USD24,000 of Tysander’s own money into a USD200 million dollar company with realised profit margins of more than 50% (Editor’s note: the author found Alibaba suppliers willing to sell Daniel Wellington watches at $2 per watch with minimum 100 piece orders. $5 if you’re putting your own brand name to the quartz watch).
While these watches are neither ground breaking nor technically appealing, they appeal to a cultural zeitgeist of clean yet well appointed design without the pretense of status or technical precision. More importantly, they arrest a condition which even legendary Apple Inc. is finding tough to overcome after the initial surge of interest for the Apple Watch – millennials are just not interested in a USD1000 device serves as a smartphone supplement rather than replacement. Within the last quarter of 2016, Pebble was acquired by Fitbit for its intellectual property with smartwatch manufacturing scuttled. Yet another sign which points to an ailing smartwatch industry and the reversal of fortunes for quartz watch makers like Uniform Wares, Daniel Wellington and Swatch as they accrue market share and vital real estate on the wrists of young consumers once more. Another indicator that quartz is the future of the industry (or at least a slippery slope). How? you ask? Here’s how.
The Slippery slope: How the next generation is going to get from Quartz to Mechanical Watches
Corniche Watches are a nascent brand which pays homage to traditional watch references from celebrated names in watchmaking like Vacheron Constantin and Patek Philippe. They don’t charge the moon for them either. With prices started at USD365 for series production models and USD425 for limited edition collections, Corniche Watches found a ready audience and an army of bloggers willing to re-share and re-post their well-shot and luxuriously styled watches on social media platforms like Hommism.com.
A stockholm brand founded by three watch enthusiasts, Corniche Watches are potentially the kind of slippery slope which makes a regular quartz watch wearer ask – what can I get if I decide to pay a little more for my watch?
While Corniche Watches eschew ETA Quartz movements for cheaper Miyota alternatives, the brand doesn’t spare expense on high horology details like polished applied indexes, blued hands and exemplary (for the price) case finishing. More importantly, the presentation box in which it arrives, carries all the pomp and splendour as your traditional luxury watch brand – a lacquered wood box complete with watch cushion and opened with a push button mechanism. Yet, the average watch idiot savant knows – the outward trappings aren’t enough. Quartz is the future of the industry IF the technology evolves to replicate some manner of soul.
Mimicking the Soul: Quartz sweeping seconds and movement finishing
Brands like Bulova offer Precisionist models, which while quartz driven, by virtue of vastly superior beat rate, offer a definitively smoother sweep than most standard automatic movements. Take a standard 28,800 bph automatic and you can see with your naked eye, the 4 interval beats which takes the sweeping hand from one second to another. Comparatively, a Bulova Precisionist model operates at 32,768 Hz to a mechanical watch’s 4 Hz, so you can literally see the difference in operation.
Another development in the sub-USD1000 category is also renewed interested in finishing Quartz movements. Typically, a high end watchmaker like Patek Philippe will finish their quartz movements like regular brands are happy to install them as they are since closed casebacks render the point of traditional finishing like cotes de geneve and perlage moot. But since Baselworld 2016 and then in SIHH 2017, brands like Bulova and now Girard Perregaux are beginning to finish their quartz movements much like how (but not to the degree) Rolex used to on their rarified and highly collectible super-quartz oyster range.
And then there’s Seiko with their hybrid mecha-quartz chronograph calibre, now a fan favourite with kickstarter chronograph brands – chronograph sweeping seconds with no-fuss automatic winding and the precision of the quartz movement. That said, it’s still going to be some challenge for watch purists to even consider mecha-quartz watches by virtue of its ticking sub-seconds but you can see how it’s not a stretch to wear a Vacheron Constantin Patrimony during the office hours and don a Bulova Aviator Precisionist for a bit of weekend base-jumping. The wealthy aren’t going to worry about a “throwaway USD600 – 1000 watch” but they might think twice about abusing their 5-digit Sea Dweller however wealthy they might be.
Reason Two: Why Quartz is the Future of the Industry
According to Claude Vuillemez, Horology Products Director for Richemont International, he was quoted in HH magazine stating, “Quartz has a very great future in the luxury segment. The problem is battery autonomy: they must absolutely last more than three years.”
Indeed, the arrival of smartwatches, while catching the Swiss watch industry off guard, has aroused brands like TAG Heuer and Frederique Constant to develop an equivalent responses. Meanwhile, others like Vice President of Integrated & Wireless Systems Alain-Serge Porret at the Swiss Centre for Electronics and Microtechnology (CESM) are working on the next generation of quartz movements which they term “augmented quartz” or “Quartz 2.0”.
Truth is, as a technology, Quartz having almost killed the industry, has barely evolved since the first 1968 Swiss prototype. It must be said that the Swiss watch industry grew over 100% in the mechanical watch segment from 2000 to 2015, rising from 4 to 16 billion francs. Given the figures, it is hard to justify expenditure into quartz research in the same measure as the Japanese where makers like Citizen are already producing the kind of augmented quartz devices with battery autonomy mentioned by Vuillemez since 1976 – we’re talking about the Eco-Drive system of course – a calibre which absorbed light and converted it into stored energy, requiring only capacitors instead of battery changing. By 1988, the Seiko Kinetic would take a leaf from mechanical self-winding and create charge generating micro-rotor. In 2005, the Seiko Spring Drive debuted, completely mechanical but regulated by Quartz for superior precision at +/- 1 second per day. From Campanola to Shellman, all manner of horological high complications have been adapted to Quartz calibres – perceptual calendars and even minute repeaters.
Comparatively, the first Swiss maison to even experiment with Quartz augmented micro-mechanics was Piaget when they launched their Piaget Emperador Coussin 700P, 10 years after the invention of the Seiko Spring Drive. That said, the issue then evolves from why quartz is the future of the industry to how it can be used to provide a template of future of the watch industry.
There’s plenty of disagreement as to how Quartz 2.0 can be used, some companies suggest novel (if esoteric functions) like pollution or UV meters – a segment which defunct watchmaker Breva attempted with the Genie 01 and 02 and failed spectacularly to biometrics where Biowatch has produced a prototype of technology able to detect wrist vein patterns and offer the watch as a sort of financial or security tool – again, a segment which luxury watchmaker Bulgari has found, there’s little consensus across banks and even countries as to how to define a “secure financial transaction” – each country and each bank has their own system and processes and finding a transaction model which works for all parties is an exercise in nightmarish bureaucracy.
As it stands, Swatch Group has made significant investments into battery technology and there’s little doubt that operating autonomy will indeed be on the cards for Quartz calibres. Combine self-powering abilities like new generation photovoltaic cells on straps and sapphire crystals with low energy consumption, quartz sweeping seconds will become more widespread once Bulova’s patent runs out and once production for electronic paper screens ramps up, the dials of watches would become tools for information delivery while still providing the very analogue soul of a mechanical watch. The future is already here, thus the question is one of How rather than Why.
Really interesting topic and well written – thanks Johnathan.