Do Watch Buyers Really Care About Sustainability?

GENEVA – What influence is sustainability having on luxurious watch gross sales? In accordance with business research, customers are extra involved in regards to the environmental influence of a watch than ever earlier than. Deloitte’s Swiss Watch Industry Study, printed in October, recorded that 43 per cent of business executives surveyed mentioned investing in sustainability was one in all 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 20 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 subjects like transparency, traceability and accountability for the social and environmental influence of mining. Nonetheless, it ranked IWC as the corporate with probably the most “bold” sustainability profile because of its extra detailed annual reporting and advances in manufacturing. Not producing a report might 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 govt Chris Grainger-Herr mentioned the corporate would now present data on its environmental influence to the group. “We’re a part of an ESG [environment, social and governance] framework inside the group and we’ve began to report that at group stage,” 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 constantly 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 together with her as carefully as doable,” he mentioned. He additionally confirmed sustainability would stay a key advertising 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 research, Deloitte reported that 48 p.c of watch patrons mentioned sustainability was one of the vital essential 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 niche between what prospects say and what they really purchase.

One business knowledgeable steered IWC could be sensible to maneuver away from sustainability messaging, and to depart 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 intervening time, the model lacks goal, regardless that the product and advertising combine is effectively executed.”

IWC’s sustainability efforts have earned clout inside the business on a key subject, in addition to accolades from teams like WWF — nevertheless it 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 in accordance with a Morgan Stanley report estimating the dimensions 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 rivals, 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.”

Trade-Vast Focus

Schaffhausen-based IWC has been the flag-bearer for extra sustainable practices in Swiss watchmaking since its carbon-neutral certification nearly 20 years in the past. In 2018, it opened a state-of-the-art $43 million manufacturing facility that pulls power from photo voltaic panels and water for cooling and heating from groundwater sources. It has additionally partnered with entrepreneurial start-ups corresponding to Increase 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 technique round circularity, the precept of re-using present supplies and eliminating waste all through merchandise’ life cycles. Nevertheless, 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 wherein the broader Swiss watch business reported report export values (up 7.6 p.c to 26.7 billion Swiss francs).

“Now we have [demand for sustainability] on an anecdotal stage, nevertheless it’s not one thing that I can measure empirically,” Grainger-Herr mentioned. “We see that that is one essential 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 constantly.”

Deloitte’s research indicated the urge for food for sustainability in a luxurious watch was extra pronounced amongst younger patrons. “They make very aware choices about merchandise they buy,” mentioned Christian Knoop, IWC’s inventive director. “They’re inquisitive about lasting worth and in genuine manufacturers. Now we have 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 set of Portugieser fashions that invoked sustainability by way of timeless design fairly 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 observe 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 Thirties.

“It’s essential within the design course of to create a design that’s meant to final and to not simply play into the most recent trend,” Knoop mentioned.

The regulation could but dictate watch manufacturers’ method to sustainability. Final 12 months, Switzerland handed the Swiss Local weather and Innovation Act, the objective of which is for Switzerland to develop into local weather impartial by 2050.

Requested by The Enterprise of Vogue whether or not the Swiss watch business could be caught out by the act, Cyrille Vigneron, chief govt 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 world distribution, remained a “widespread challenge.”

And he issued a warning. “The place Swiss watchmaking isn’t actually prepared is for transparency,” he mentioned.