Around 60% of the luxury watch market doesn’t have ecommerce

Drifting away from core positioning and embracing a set of new values is often considered to be death knell for a brand. When watch industry veteran Georges Kern took over as CEO of Breitling in 2017, the 140-year-old brand was respected, but perceived as ‘dusty’. In an era when consumers looked for inclusivity and sustainability, Breitling’s positioning of a macho, aviator watch brand was out of sync. Kern took the bold step of moving away from the macho imagery to becoming a casual lifestyle brand which appealed to both men and women. The strategy worked. From a valuation of $900 million in 2017, it was valued at $4.5 billion when it was sold to Partners Group in 2023. Its India business recorded a 40% jump in revenues last year and the company plans at least 10 boutiques (up from three boutiques) in the next couple of years.

How has the luxury consumer evolved?

First of all, more and more people have access to luxury. It is far more democratised than what it was in the 1980s which was the time of family brands. Today, especially post the pandemic, luxury is much more informal than it was before. It is much more outdoor, you want to live again, travel and enjoy life. Luxury is more leisure now.

Luxury is simple. It has to be credible, assertive and it has to be organic. If it is artificial, then it doesn’t work. Today, in 2024, we are launching a digital quartz watch, which is not a digital Apple watch, but it’s a success because people love it, it’s part of our history and it’s not a digital watch, it’s a quartz with functions related to piloting. We are the only brand to do this. Most companies try to build a luxury brand with a checklist – a Hollywood star as brand ambassador is a must-have, association with sports such as Formula-One etc. In today’s times it doesn’t work. You need a different way of thinking. Your brand has to be fun and approachable. It needs to be inclusive, casual and sustainable, only then would consumers accept you.

Earlier, luxury brands were consumed by people who had attained a certain stature in life. Today, we even find the younger generation consuming luxury. How different is the Gen-Z luxury consumer?

The new generation is consuming constantly which is great, but if you start to find your identity you will be more successful. You have to find your identity, be more recognisable and reflect a certain style. Today, you first buy a brand, then a design and then a technology, which is very different from 25 years ago, when you first bought a movement, then a design and then a brand. You are an Armani or a Versace girl. The brand has become much more important and that is the first element you need to work on. It has to be, does my brand reflect my personality? The biggest challenge for a brand is also to find its personality or style and then attract a consumer. We found it. We don’t think in terms of age-groups or social categories, we think lifestyle. Breitling has a certain lifestyle and if it corresponds to what you like you will buy it. It has nothing to do with age-groups. We are not into super luxury, we are in the sweet spot where brands such as Rolex, Omega are, and this is the widest area where you have luxury which many people can buy.

During the pandemic, one saw luxury brands hurriedly building their online strategy, now brands such as yours are focusing on expanding their network of stores yet again. Is the boutique culture back?

We had super strong lockdowns for a couple of weeks. In any economic crisis what saves your business is boutiques. You have stocks, service, you have the environment, it’s a wholesale business. We are hard goods, not sneakers, the decision process is made online for sure, but you ask yourself where do I buy it from. In our industry it is very much retail. Studies show people want physical experience, watches are a physical tactile product, you want to touch it and see it on your arms.

Around 60% of the luxury watch market doesn’t have ecommerce. Buying a luxury watch is a huge investment, consumers want to feel the product on their wrist. It’s a very different way of building a brand and creating an image. The boutique is the ultimate place which tells you a story. It’s like buying an expensive painting. You would never buy an expensive painting online. You would walk into a gallery, look at the product, feel it and then invest.

How different is the Indian luxury market from the rest of the world?

There are local realities you have to accept. India is totally different from China in its development, its growth, but these are macro-economic differences. Indians as global customers are exactly the same as French, English or Chinese, but the country is different. It is a different context and economic development. We have sold to Indians in the past in Dubai or London, he/she is exactly the same. The country is different in terms of infrastructure, boutiques, wholesale everything is different. The biggest difference between China and India in luxury parlance is infrastructure. Even Dubai is striking in terms of malls and retail environment. You need infrastructure.

There was a time not so long ago when Indians bought luxury brands only when they traveled abroad, as the pricing here was significantly higher. Even brands were shying away. What is different now?

The pricing structure is the same now. You can afford differential pricing, you need worldwide pricing, taxes included. The free trade agreement will allow us to invest more in this country. When you have 40% taxes and you have to decrease prices and you make no margin, no one would want to invest. When you have proper margins, you can invest and help this country grow.

You call yourself a neo luxury brand, how would you define it?

The concept of neo luxury is to be more cultural, yet try to talk to consumers in a modern way, which they can relate to. We changed our design language. Our design has elements from the past but in a modern and cool way. We are a casual luxury, we are sustainable, because people want that. Sustainability is not an argument to buy a watch but if you are not sustainable, it’s an argument against the company. We are not activists but we want to do it smartly. For instance, we introduced lab grown diamonds in the women’s segment. It is exactly the same quality as natural diamonds. We also have NFTs, blockchains etc. If you don’t have these pillars, it would go against your brand. We also talk about being approachable and inclusive not in just terms of gender but also in terms of intellectual inclusion of the brand. Breitling for 25 years has been positioned as a loud, bold, aviation brand. Today, we want to be identified as a brand which is not just into aviation, but also into cycling or surfing. We are kind of a street wear watch company.

We had to be smart enough in doing it and not confuse consumers. There is a huge difference between being vintage and being dusty. You need to define a style which differentiates yourself but in a way it still looks smarter. You have to reinvent all the time.

Funnily enough, the support came from the investors. Whenever you dare to think differently, the problem is you are more afraid of what you lose or are you more excited about what you might win. We were more excited about the potential of winning than about the fear of losing.

We wanted to give a cool alternative to the traditional Swiss watch. Breitling is the creator of chronographs and we tried to be modern in the way we talked to our clients. A brand is like a puzzle. Breitling was about macho pilot watches. When we started taking elements of the puzzle out and added new elements, it became a weird puzzle. There was a period when people were confused as the elements of the old puzzle fitted the old image with a new dimension. Until you have implemented 70%-80% of the new puzzle people don’t get it. It took three years for people to get confidence. There was a big debate on the logo. We went away from the wings because we said we are not just an aviation watch. We produced a logo similar to the ‘We Breitling 1884’ logo which was there between the thirties and the eighties. We were more faithful to the real history of Breitling, the unknown history of Breitling. Most consumers only know about the last 20 years of Breitling.

There were totally different communities – there was the vintage community (1930s to 1980s) and we had the hardcore Breitling fans of the last 20 years and these two communities didn’t speak to each other, so we had to bridge those communities. It was tough to bridge the collectors with the Breitling of last 20 years. One of the biggest collectors of chronographs in the world, Fred Mandelbaum, told me it’s incredible as for 25 years nobody had called him from Breitling.