I think the luxury industry has mastered the in-store experience. If you think about luxury, its foundation lies in the in-store experience, from the way you enter it, the way it’s designed, the materials used, the customer service – that’s how you create luxury. To translate that [experience] online is still being navigated and I think we’ve got a fair way to go. There are some brands doing some impressive things, like butler-delivered services, but it’s playing catch up.
I just think we’ve got to get better with our tools as an industry. By that, I mean sharing online images that are much better quality, that inspire you, rather than just basic stock shots. It’s a work in progress.
I think Swatch saw the [digital] opportunity several years ago and put systems in place. At Tissot in Australia, we started to see e-commerce emerge in 2019. Some of our retail partners like David Jones, which has a more sophisticated e-commerce offering, started posting some decent numbers. A lot of other [luxury] retailers were behind the eight-ball. We have products distributed through David Jones online and Myer and they are quite strong stores for us. Other retailers weren’t doing a lot. Enter Covid and it’s been a mad rush to get a website up and running. But in the next 12 months, online stores will be the number one point of sale for all our retail networks. We’re already seeing it with David Jones and Myer.
[Our site] is evolving at the moment. We’re working out how to make it a really great experience, but obviously the point of difference with online will be the massive range. In-store, we have 150 -200 pieces, but online, you can expect to see 350. That’s a big opportunity and we’re working on some pretty big projects globally this year.
IR: How do you think luxury customers feel about buying online these days?
JW: I think we’ve got to work out how to give them that luxury experience online. You only have to cast your mind back 10 years ago when you were booking online tickets for flights and parting with $4,000-$5,000 for you and a group of friends. That’s a lot of money. You’d think, “Am I even going to get a ticket? Am I going to get to the airport and not be able to get on the plane?” I think it’s a mindset thing. People are buying luxury cars online these days.
I think in the next few years, in the luxury sector, you’ll make a reservation and have an interaction in the same way we are today. It’s about scheduled appointments, it’s a luxurious, intimate experience. I think that’s where it will go.
Watches are a tactile product. [As a business], to do all our interactions online has been difficult. We’ve tried to adopt a digital-first mentality through this. At the start, it was rubbish – you’d dial in, people couldn’t hear you, but now, we’re all competent and it works. Throughout the year, we’ve had a digital-first mentality, where we think, ‘How do we use tech better now? How do we connect retailers? How do we present our brand online through our product imagery and descriptions?’ The trend was there, but we weren’t giving it the focus it needed, whereas now we don’t have a choice.
Traditionally, even our account managers’ job descriptions were about bricks-and-mortar. It was visiting stores, training staff, merchandising our product and making sure it looks good. We’re now bringing their roles into a digital world. You need to know how our sites work, how our products are presented. You need to know that when you put that product on the site, what happens to it in-store. For some of the account managers, it’s been an eye opener, because they’re not used to it.
IR: Before Covid, you were looking at a record year at Tissot in 2020. What was happening in the business up ‘til that point?
SJ: We’ve got some great retail partners and we’ve got our distribution right. I’ve been with Tissot for almost seven years. When I started, we had about 140 points of sale and we’ve expanded that up to 180 now. We’ve improved the presentation of our brand in-store, we’ve got really consistent ranges and we opened our first standalone boutique in the Sydney CBD last year in July. We also launched on The Iconic.
Before that, we had a retail concession space in Myer Melbourne which performs extremely well and we’ve opened up a DFO outlet. Our distribution has improved a hell of a lot.
I think our product has improved. Tissot has historically had more masculine appeal and been a bit more sporty, whereas in the last couple of years, we’ve started to see a lot stronger business from our ladies range. I think that’s another reason why we’re gathering momentum.
IR: Even before Covid, a lot of brands have started focusing more on the direct-to-consumer side of their businesses. But it’s an interesting time to launch a store during a pandemic.
SJ: I think it’s important. If you look at the journey of the brand in Australia, it was always going towards [a Sydney store], but [the business] needed to be big and strong enough so that when we opened a store, it was going to work. Our distribution had been impacted by a few store closures, but then a door opened up and it was the perfect location. It’s so important to offer a premium brand experience with knowledgeable staff. The biggest range we have in Australia is available in that store too, so we’re giving people a whole range of products they’ve never seen before. It’s very much a branding exercise. We always wanted it to work harmoniously with all our other distribution [channels]. It isn’t necessarily about opening a flagship and closing everything else. We wanted to open it up to provide a great brand experience which would benefit all our retailers.
IR: Is store expansion on your radar?
SJ: It’s a funny time at the moment, isn’t it? You don’t look at the next 12 months and think, ‘Let’s expand’. I think we want to focus on getting the Sydney store great. We’re putting a lot of investment in the store and activating it. We launched a big Christmas Advent calendar last year and every day there was a different offer available to the customer for 24 days. We’re trying to create an experience. We’ve got a great footprint in Myer Melbourne and we’ve got DFO at South Wharf. That’s the focus at the moment.
IR: What’s the Tissot in-store experience like at the new flagship?
SJ: There are 400 pieces on display. It’s a good offer. Our team has both deep retail and luxury sales experience as well technical experience, providing a holistic, in-person offering to our customers.
We’re working on how to bring the digital world into bricks-and-mortar. We have an online click-and-reserve function. It’s evolving.
IR: What’s the luxury watch market like right now?
JS: In general, the watch industry in Australia benefits from tourists, so that hurts. But our focus has been on domestic. The appetite for Swiss watches is growing, I think consumers are becoming more sophisticated with their understanding of the watch industry and what it stands for.
At Swatch Group, there is a watch for every lifestyle, every price point and every personality. From Swatch to Tissot, to Longines, Rolex and Omega.
To be honest, in the industry, there have been a few watch brands that have fallen away in the last two to three years and I think the biggest brands have risen.
IR: How has the rise of smart watches impacted sales of luxury watches?
SJ: If anything, it’s put more product on people’s wrists. So if you weren’t wearing a watch before, you probably feel more comfortable now [with a smart watch] We’re launching our first connected watch at the end of the year. One of the biggest challenges with smart tech is battery life but ours will be powered by the sun.
Swiss watches aren’t tech watches, they’ve got a different purpose. A lot of people who get into smart watches like the step count and those health functions, whereas Swiss watches are seen as luxury jewellery. They’re a different market. You wouldn’t walk down the aisle of your wedding with a smart watch. In 25 years’ time, the watch you wore on your wedding day will be with you. Your Apple watch won’t.
IR: Tissot actually describes itself as being in the affordable luxury category. Can you tell me about that space?
SJ: Luxury’s very different to many people. To some people, it’s buying a $25,000 handbag. To others, it’s spending $350 on a handbag. I think Tissot is the entry brand into the Swiss watch world. Last week, I saw a watch selling for $60,000 from Omega. When you look at Tissot in this part of the world, it seems like a big brand, but not huge. One in four watches that leave Switzerland is a Tissot. That includes every brand from Rolex to Tag.
We sell over four million watches a year so we can produce watches that have great innovation and materials at a more affordable price. What you buy for $1000 at Tissot – with the functions, designs and materials – you would probably pay $2,500-$3,000 at other brands.