GENEVA – What influence is sustainability having on luxurious watch gross sales? In response to business research, customers are extra involved concerning the environmental influence of a watch than ever earlier than. Deloitte’s Swiss Watch Business Examine, revealed in October, recorded that 43 per cent of business executives surveyed mentioned investing in sustainability was certainly one of their “strongest priorities” for this 12 months.
And but, it felt like sustainability was much less of a spotlight at this 12 months’s Watches and Wonders Geneva, which ends Monday, in comparison with earlier editions.
Even the model that has championed sustainability in watchmaking over the previous twenty years seems to be going quiet on it: IWC, which had led the cost on the subject since being licensed as carbon impartial in 2007, didn’t publish its annual sustainability report this 12 months.
In a November report ranking Swiss watch manufacturers’ sustainability efficiency, the WWF underscored that the business was nonetheless lagging on key matters like transparency, traceability and accountability for the social and environmental influence of mining. Nonetheless, it ranked IWC as the corporate with essentially the most “bold” sustainability profile as a result of its extra detailed annual reporting and advances in manufacturing. Not producing a report shall be seen by the WWF as a backward step.
Requested why IWC, which is a part of the Richemont Group, had backtracked on its dedication to clear reporting, the corporate’s chief government Chris Grainger-Herr mentioned the corporate would now present info on its environmental influence to the group. “We’re a part of an ESG [environment, social and governance] framework throughout the group and we’ve began to report that at group degree,” he mentioned.
Much less transparency — its influence will now be blended with information on all of the manufacturers within the group — gained’t imply much less progress, Grainger-Herr mentioned. “Our ambition is to repeatedly enhance on the entire main [sustainability] elements.” Nonetheless, within the absence of reporting, such claims develop into tougher to confirm.
Grainger-Herr additionally mentioned a partnership with the supermodel Gisele Bündchen, who acts as an advisor to IWC’s sustainability committee and has starred in nature-themed campaigns for the model, would proceed. “Sure, we work along with her as carefully as attainable,” he mentioned. He additionally confirmed sustainability would stay a key advertising and marketing pillar for the model. The sustainability part of the corporate’s web site didn’t seem to have been up to date since 2022, nonetheless.
Analysis suggests sustainability issues to luxurious watch patrons. In its examine, Deloitte reported that 48 p.c of watch patrons mentioned sustainability was one of the crucial necessary elements behind a luxurious watch buy, and that equally, 41 p.c of pre-owned watch patrons had been motivated by sustainability, second solely to concerns of value.
Nonetheless, the report additionally discovered that sustainability ranks because the fourth strongest driver behind a watch buy — following model picture, design and value. And there’s usually a spot between what clients say and what they really purchase.
One business knowledgeable recommended IWC can be good to maneuver away from sustainability messaging, and to go away reporting to the group. “Selecting sustainability offers IWC an angle of communication, however not values or imaginative and prescient,” mentioned Oliver Müller, founding father of the Swiss consultancy LuxeConsult. “In the meanwhile, the model lacks goal, though the product and advertising and marketing combine is effectively executed.”
IWC’s sustainability efforts have earned clout throughout the business on a key matter, in addition to accolades from teams like WWF — but it surely doesn’t seem to have reinvigorated gross sales
Richemont retains a detailed guard on the monetary outcomes of its manufacturers, and Grainger-Herr declined to touch upon IWC’s efficiency. However based on a Morgan Stanley report estimating the scale of Swiss watch manufacturers (of which Müller is a co-author) IWC’s revenues dipped from 908 million Swiss francs ($996 million) in 2022 to 726 million Swiss francs final 12 months.
“The model suffers from a excessive value positioning in contrast with direct opponents, primarily Breitling and Omega,” mentioned Müller. “The proportion of purchasers shopping for a watch at this value level, solely or primarily due to a model’s sustainability efficiency is, sadly, very low.”
Business-Large Focus
Schaffhausen-based IWC has been the flag-bearer for extra sustainable practices in Swiss watchmaking since its carbon-neutral certification nearly twenty years in the past. In 2018, it opened a state-of-the-art $43 million manufacturing unit that pulls power from photo voltaic panels and water for cooling and heating from groundwater sources. It has additionally partnered with entrepreneurial start-ups akin to Growth Supersonic, an aviation firm trying to decarbonise supersonic air journey. On reviewing its actions, the WWF had concluded IWC is Switzerland’s most sustainable luxurious watch firm.
Swiss watch manufacturers together with Breitling and Oris have additionally emphasised sustainability commitments lately. The beginning-up watch firm ID Genève has generated buzz for constructing its product and advertising and marketing technique round circularity, the precept of re-using present supplies and eliminating waste all through merchandise’ life cycles. Nonetheless, it’s unclear whether or not their efforts will actually translate to buyer demand at scale. Studies of IWC’s falling revenues final 12 months got here amidst a fast-growing market by which the broader Swiss watch business reported document export values (up 7.6 p.c to 26.7 billion Swiss francs).
“We have now [demand for sustainability] on an anecdotal degree, but it surely’s not one thing that I can measure empirically,” Grainger-Herr mentioned. “We see that that is one necessary driver, understanding {that a} product is made as responsibly as it may be and that the model is striving to enhance what it does on that entrance repeatedly.”
Deloitte’s examine indicated the urge for food for sustainability in a luxurious watch was extra pronounced amongst younger patrons. “They make very acutely aware choices about merchandise they buy,” mentioned Christian Knoop, IWC’s inventive director. “They’re considering lasting worth and in genuine manufacturers. We have now to work on our credibility, and sustainability and enchancment in sourcing supplies, in manufacturing strategies and in environmental measures for buildings are all a part of that.”
At Watches and Wonders Geneva this week, IWC has launched a group of Portugieser fashions that invoked sustainability by way of timeless design relatively than buzz-words like traceability. One high-end piece featured a brand new complication the model is looking an “Everlasting Calendar,” which it says may hold monitor of the date till the 12 months 3999 and the phases of the moon for 45 million years assuming it’s saved wound and maintained. The origins of the design return to the Nineteen Thirties.
“It’s necessary within the design course of to create a design that’s meant to final and to not simply play into the most recent style,” Knoop mentioned.
The regulation might but dictate watch manufacturers’ method to sustainability. Final 12 months, Switzerland handed the Swiss Local weather and Innovation Act, the aim of which is for Switzerland to develop into local weather impartial by 2050.
Requested by The Enterprise of Style whether or not the Swiss watch business can be caught out by the act, Cyrille Vigneron, chief government of Cartier — one other of the business’s ESG front-runners — mentioned that whereas manufacturing processes contained in the nation had been “fairly okay”, upstream provide chain points, such because the environmental price of worldwide distribution, remained a “frequent challenge.”
And he issued a warning. “The place Swiss watchmaking isn’t actually prepared is for transparency,” he mentioned.
