By Glen A. Beres

 

Over the last 10 years, the watch industry has experienced major upheavals, has seen trends come and go, and has witnessed the rise and fall of many of its players, both large and small. As the industry continues to move forward with new products, styles and technological innovations, IDEX takes a look back at some of the major developments that have shaped the industry’s current direction.

Some of the key trends that have impacted the watch industry over the last 10 years include:

• Renewed interest in the mechanical watch.

• Increasingly sophisticated technological features in both mechanical and quartz watches.

• The tremendous growth in the fashion watch segment.

• A boom in sports and casual watch styles.

• An influx of retro designs to capitalize on the nostalgia trend following the turn of the new millennium.

• A movement toward jewelry watches studded with diamonds or colored gems.

• The enormous popularity of white metal looks.

• Interchangeable straps and dials to give customers versatility and fashion choices.

• Demand for a wide range of colors, shapes, sizes and designs.

 

Makeup Of The Market

The worldwide watch market is a $20 billion business, with the United States accounting for more than a third of that figure, according to statistics from the Federation of the Swiss Watch Industry and other industry estimates. The Swiss account for more than 50% of the total world production value. However, in terms of production volume, Switzerland produces less than 10% of all watches sold, while Japan has about a 45% share of volume and Hong Kong about 25%.

According to analysts’ estimates, the largest industry players worldwide are The Swatch Group, Citizen, Rolex, Richemont, Seiko, and Casio.

 

At the luxury end of the market, the top brands include such famous names as Patek Philippe, Vacheron Constantin, Audemars Piguet, A. Lange & Sohne, Breguet, Jaeger-LeCoultre, Rolex, Cartier, Parmigiani, Franck Muller, Ulysse Nardin, Girard Perregaux, Blancpain and Chopard, among others.

 

In the upper-to-mid-range market, top names include Movado, Raymond Weil, Baume & Mercier, Tag Heuer, Gucci, Breitling, Concord, and Omega, among others. 

 

Technology Rules

If the 1980s was the decade of the quartz watch, the 1990s saw the return of the mechanical watch. As customers started to rediscover mechanical watches, manufacturers worked hard to outdo one another in offering them the latest and greatest “bells and whistles.” Throughout the decade, mechanical watches became increasingly sophisticated, with more and more features, prompting the industry to coin the term “high-mech” as opposed to the “high-tech” quartz watch trend.

 

Early examples of this trend included International Wristwatch Co.’s Grand Complication wristwatch introduced in 1991 - the timepiece was a self-winding watch that featured a chronograph, perpetual calendar, moon phase indicator and minute repeater. With nine hands and 659 mechanical parts, it was the most complicated wristwatch of the era. IWC followed up the Grand Complication in 1993 with its even more complicated II Destriero Scafusia, which included all the Grand Complication’s features as well as a split-seconds hand, and a tourbillon (a device that diminishes timekeeping errors caused by gravity.) Many others were to follow throughout the decade.

 

But as mechanical watches became more sophisticated, so did quartz watches. The no-battery watch was a key innovation. A watershed moment came for the sector in 1994, when Seiko introduced its first Kinetic watch line. The watches get their power from the movement of the wearer’s arm. Although others had experimented with the technology before them, Seiko was the one to perfect it and bring it to the market.

 

Not to be outdone by Seiko, Citizen introduced Eco-Drive, its own version of a no-battery quartz watch - only this one was solar-powered. And near the end of the decade, both companies had upped the ante on the no-battery front by introducing quartz watches powered by the heat from the wearer’s wrist. Seiko’s version was called the Thermic, introduced in 1998; Citizen’s, introduced the following year, was the Thermo, a thermoelectric watch that runs on energy generated by the temperature difference between the wearer’s body and the surrounding air.

 

As if this wasn’t high-tech enough, companies also began to introduce “wrist instruments” that could “multi-task” and do much more than just tell time. The perfect example was Timex’s Data Link watch, first introduced in 1995, which allows the wearer to download data from a computer into the watch. Other innovations that have been introduced in recent years include watches that can send and receive e-mail; watches that can receive news, stock updates, weather reports and other data; watches as PDAs; watches with instant messaging; watches with cameras; watches with “speedometers” for runners to monitor their progress and vital signs; and wrist phones.

 

Fashion As Big Business

Meanwhile, the tremendous success of Swatch in the late 1980s and 1990s opened the door for fashion watches at affordable prices. Analysts estimate that the market grew by double digits virtually every year during the period, while dress watches only showed annual growth in the mid single digits.

 

Brands like Fossil, Guess, Tommy Hilfiger, Anne Klein, and many others have introduced hundreds of new styles, in every conceivable shape, size and color.

 

Hong Kong manufacturers flooded the market with countless inexpensive licensed and character watches. Kenneth Cole entered the fashion watch market in 1997, and has been one of the success stories. Competition in this sector has been extremely fierce; more than one popular brand has fallen by the wayside in recent years, including Perry Ellis, which was pulled off U.S. shelves by distributor Asia Commercial Holdings Ltd. of Hong Kong in 1996 due to financial woes. (However, in April 2004, Perry Ellis announced a licensing agreement with Seiko to re-introduce the brand in the U.S. market).

 

At the same time, the 1990s trend toward business casual, and a move toward health and fitness, took sports watches to another level. One big winner in this category over the past decade has been Sector, which over the years has aggressively marketed itself under the “No Limits” challenge associated with extreme sports and the adventure lifestyle and in doing so, has become virtually synonymous with the category. Another is TechnoMarine, which debuted in 1997 and has since become one of the industry’s leaders in developing eye-catching, creative sports watches. The company has also been one of the industry leaders in merging sports with luxury, and took this combination to new heights in 1999 with the introduction of TechnoDiamond, billed as the industry’s first original diamond chronograph diving watch. The growing affluent segment in major markets like the United States has certainly impacted this and other watch categories as well, as consumers show they are willing to pay more for style, creativity, quality, functionality and innovation.

 

While the wave of affordable fashion watches as accessories shook up the traditional watch industry, another trend started to take hold in the mid to late 1990s as well, as some of these traditional players looked to capitalize on the fashion movement by bringing it up market. Gucci is widely regarded as the pioneer in this area; with its phenomenally successful G Series, the company demonstrated that there was a strong demand for better, higher-priced fashion watches. Ultimately, Gucci overextended the concept too far into the luxury realm and had to pull back. But the seed had been planted, and many companies followed its lead.

 

White Looks Have Been White Hot

As the industry neared the millennium, white metal casings and bands and bracelets in stainless steel, silver and platinum became especially prominent with their cool, versatile, futuristic look. Consumers started to move away from yellow gold looks except for luxury dress watches. Certainly, the casual and sports movements played a role in this shift.

 

White metal looks continue to be popular, although yellow has been making a big comeback lately, according to some sources. Case in point: in 2002, Festina built a new gold factory in Spain with the capacity to produce 2,000 watches per day. And companies like Tag Heuer, Tutima, Longines, Chopard and Alfex, among others, have added gold and two-tone watches to their lines.

 

In the United States, the aging of the Baby Boomers has sent nostalgic demand for classic, retro designs into the stratosphere. Many watch companies started to capitalize on this trend during the last few years by launching contemporary versions of some of their classic collections. This was particularly true in 2001, as consumers shifted their focus from looking forward to the new millennium to looking back at the old one. Old time glitter, glamour and color came back with a vengeance, as did sports watch designs and digital watch designs from the 1970s. In 2001, Zodiac and Zenith both relaunched classic retro models, and Movado launched its Elliptica collection, in which it combined its 1912 Polyplan case with its classic 1947 “Museum” dial and gave it a contemporary spin as a “fusion of past and present.” Meanwhile, Corum launched its striking line of classically styled “Bubble” watches in Basel in 2002. And Swiss Army Brands introduced a military-style field watch based on 1940s U.S. military watches. 

 

 In the late 1990s and early 2000s, other watch trends included a continued emphasis on design, particularly in the area of more inventive case shapes; bigger, bolder cases in both men’s and women’s designs; the introduction of a rainbow of colors on straps, dials and bracelets; greater technology with more functions aimed at the jet-setter and business traveler; more functionality in sports watches; and the emergence of new “space-age” materials for watches such as titanium and rubber. And the last few years have seen a major movement toward jewelry watches, with a range of companies, including Calvin Klein, Tissot, Ebel, Ventura, Chopard, Longines, Movado, Concord, Omega, Breguet and many others adding diamonds to their timepieces.

 

The more recent move toward diamond watches and the resurgence of yellow gold looks signals a trend away from the casual toward dressier styles, particularly in women’s watches. This has also become apparent in the resurgence in leather straps, especially colored ones.

 

Finally, versatility has become a strong trend in the watch industry since the turn of the millennium. Numerous watch companies have been coming up with timepieces that allow customers to change parts, such as watchstraps and dials. Such versatile designs can entice customers to buy an entire palette of watch straps to have different looks for different occasions: for instance, a colorful jelly strap during the day for a sporty and casual look, and a crocodile skin strap at night to add a touch of glamour, elegance and sophistication.