Tag Archives: Swatch

High tech watches leap into future

The watch industry is embracing high technology with new products such as wristwatch pagers and miniature computers. High tech functions are becoming increasingly important in the marketing of watches, and companies such as Swatch and Citizen are creating products to meet that consumer demand. For example, Swatch has Swatch the Beep pager/watch, Seiko has the MessageWatch pager/watch, and Citizen has watch that can store diving data in a tiny computer.

Flashy high tech is making a move into the watch industry.

As functionality becomes an ever-bigger factor in selling watches, a number of companies are rolling out what could be called watches of the future.

While some of the features bring to mind Dick Tracy or Agent 007, many in the watch business say the moment is right for times that make life easier and more convenient.

Swatch introduced its newest version of a wristwatch pager, Swatch the Beep, this year, while Seiko is in the midst of rolling out its MessageWatch — a pager watch plus other features — to 20 major U.S. markets this year and next. In the computer arena, Citizen recently rolled out a sports watch that can download diving data into a computer, and at least one other major U.S. watchmaker that requested anonymity said it is developing a general-application watch that can also store information and download.

If you think about it, the wristwatch is one of the few pieces of electronic gear that most people wear,” said Michael C. Park, vice president of business and network development for Seiko’ Telecommunications, Beaverton, Ore., the division Seiko created to handle the MessageWatch. “It’s really the most obvious place to start introducing portable technology into peoples’ everyday lifestyles.”

Suzy Watson, trend analyst for Timex Corp., agreed, adding that her firm is gaining momentum on the technology trail.

“Technology will definitely end up on the wrist because there is the ability to miniaturize it to that point now,” Watson pointed out. “One potentially hot area, as we see it, is sensor-based watches, items that can open a garage door or start a car. We see these types of functions definitely on the brink of being possible.”

The main goal of these and other innovations, as many pointed out, is to provide functions that people want and need. In the last several years, softer-tech items such as chronographs, dual and multiple timers and improved forms of illuminated dials have become popular features in many watch lines.

“One of the big things that is happening for us right now is functional watches,” said Kim White, merchandise manager of jewelry and watches for Federated Merchandising, the buying arm of Federated Department Stores. “People are looking for watches that fit into highly active lifestyles.”

While the audience for highly specialized items such as pager watches may not be huge, White pointed out, anything that helps people save time these days is bound to attract interest. “Whether there would be a huge audience for a watch that, say, sends faxes is hard to say,” White said. “But the main point is to give people something they find useful.”

Whatever their functions, White said, these high-tech watches won’t cut into the fashion watch business. She agrees with watchmakers that this category will be, at least for the time being, an add-on watch business. However, some makers note that some of the technology could be incorporated into fashion watches.

“Our basic philosophy is to incorporate simple, truly useful functions into our products,” said Martin Grossenbacher, executive vice president of the U.S. division of Swatch. “We don’t think consumers are all that happy with watches that have 15 different capabilities packed into one, for instance. These tend to be confusing, and often people don’t understand how to use them.”

Swatch has chosen to take a position in the pager market, which it first entered two years ago with the Piepser, a tone-only pager/watch. The Piepser recorded incoming calls with a beep signal but did not have the display screen, which meant that users had to call a service number to find the number contacting them.

Swatch the Beep represents the company’s next generation pager/watch, Grossenbacher said. The item, which was developed in conjunction with MobileComm, a division of Bell South, and introduced in April, is an oversized watch with a numeric display screen that records incoming phone numbers just as a pager would. It wholesales for about $85.

At this point, the product can only be used regionally, but the company is planning to link it into a national network next year, Grossenbacher said. In addition to being carried by home electronics chains, Swatch the Beep is being stocked by some department store and jewelry retailers, he noted.

“We see the whole aspect of communication as the direction to go in as far as high-tech developments go,” Grossenbacher noted. “The next step would be a watch that could be used as a phone.”

Seiko is another company hot on the trail of the pager craze, having spent the last three years developing the MessageWatch, a digital watch with a display screen for incoming calls and information. The pager receives numbers of up to 16 digits as well as messages such as “call home” and “call office.” For an extra fee, users can subscribe to a service that runs everything from breaking news to lottery numbers across the display.

“The sky is the limit as far as the informational applications go,” said Seiko’s Park. “When we first started test-marketing the watch, it just had the pager capabilities and we found that people wanted more. It’s the ‘information is power’ idea.”

The MessageWatch, which wholesales for about $50, is now being sold only in Portland, Ore., and Seattle, Wash., and so has just regional applications. But, Park said, “our current goal is 20 U.S. markets in two years, and we’re in the middle of negotiations with radio networks around the country.”

Seiko’s aim is to eventually put together its own international network into which its watches can be hooked.

Computers are developing as the technology of choice for others such as Citizen, which launched its PC-compatible Hyper Aqualand dive watch last spring. This watch contains several sensors that record diving information while the wearer is underwater. Later, the watch can be hooked into its own communication unit, an interface device that, when connected to a computer, allows the information recorded by the watch — such as dive times, maximum depths and water temperatures — to be downloaded into the computer’s system.

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Price rite

Perhaps Bob Barker has a point. When it comes to jewelry and watches, the past year has proven that consumers feel the price needs to be right.

With the exception of Rolex, Tiffany and Swiss Army Brands, most names on the category-specific top 10 list offer merchandise less than $100, and that’s an unusual feat in a sector where upscale brands have mammoth marketing budgets, frequently bombarding shoppers with eye-catching advertising visuals in media outlets from magazines and movies to prime time television.

It’s hardly surprising that the more mainstream brands have generally fared so well. In the post-2000 economic downturn, the upscale fine jewelry and watch sector was one of the hardest hit, even though it has rebounded and is now doing well. Customers typically delayed their high-end purchases, stashed their cash and stayed home to avoid the temptations offered in lofty retail environments such as exclusive jewelry salons.

Pricing became an issue and customers turned to the Internet and more moderate chains like Wal-Mart and J.C. Penney to find deals on diamonds. Brand recognition was and remains high for value-oriented brands.

Total jewelry and watch sales in the U.S. are estimated to have been $43.56 billion in 2003, according to 2 Degrees Freedom Ltd., a London-based marketing and research consultancy that began tracking jewelry sales last year. According to the Commerce Department, 2002 jewelry and watch sales were $42.3 billion in the U.S., and the department predicts 2004 sales of $48.3 billion.

To capitalize on the current momentum of better values in watches and jewelry, many companies have stepped up their marketing efforts and added value to their collections by offering more innovation and teaming up with fashionable designers.

Case in point is number one jewelry and watch brand Timex. The Middlebury, Conn.-based Timex Corp. has reengineered its legendary tag line, “It Takes a Licking and Keeps on Ticking,” after 50 years. The updated version reads simply, “Life is Ticking.” In addition, Timex is upping its design quotient and recently collaborated with industrial designer Karim Rashid, contemporary artist Dave Kinsey and fashion designer Matthew Williamson for new limited-edition Timex XFactor watches.

Number two Seiko hasn’t been resting on its laurels, either. The company, whose U.S. division is based in Mahwah, N.J., continues to wow customers with innovations, and is launching a Sportura chronograph (stopwatch) this fall.

The fourth most recognized watch brand in America is Casio, which has snared a youthful customer with its fun G-Shock collection, and also has stepped up its innovation in recent months by introducing watch designs that use solar technology. The Japanese brand also has been building consumer recognition with its growing assortment of electronic merchandise such as digital cameras and electronic musical instruments.

Placing fifth, Swatch continues to be noticed by consumers with its fun and whimsical collections, such as the recent Bunnysutra line, which featured illustrations of bunnies in suggestive positions, causing much controversy and press hype that ultimately served to heighten brand awareness.

In the women’s sector, number six Citizen has been building momentum with ladylike designs featuring diamonds, crystals and mother-of-pearl details in styles such as Stiletto, Riva and Aviara, but it, too, is playing the techno card: Its watches run on solar power instead of batteries. Citizen is particularly known to sports fans, as it is a sponsor of major tournaments.

Swiss Army Brands, which took the seventh spot, has been equally aggressive to build market share. A depressed economy might have hurt the company, known for its signature pocketknives, but Shelton, Conn.-based Swiss Army is building consumer recognition with its watches, apparel, travel gear and kitchen cutlery.

Close behind is Fossil, in eighth place. The company has been spreading its wings by making new acquisitions, such as its recent purchase of Tempus International Corp., which operates as MicheleWatches, and acquiring the licenses for Burberry and Zodiac watches.

Number nine Bulova, meanwhile, is looking to bolster its presence in consumer minds with an ad campaign this fall featuring its new diamond-adorned sport designs, as well as a renewed effort to enter the European market, particularly in Italy and Germany.

While there’s quite a bit of action in the moderate field, the high-end business anticipates a rosier future. Many upscale retailers said the free-spending customer has returned in recent months, and they look for a strong fourth quarter with up to 20 percent gains in sales, thanks to a rising stock market and a healthier job picture.

That’s good news for the likes of Tiffany and Rolex, which are expanding their assortments this year. Number three Rolex, for instance, made a departure of sorts by launching the roaringly wild Cosmograph Daytona watch featuring yellow sapphires on the bezel and a wild, animal-print strap. The new watch will surely attract a younger, if not more extroverted, customer that usually gravitates toward fashion brands.

At number 10, Tiffany & Co., meanwhile, has boosted its engagement collection earlier with the next Legacy ring, and in September, will be launching a complete “Atlas” collection of watches and jewelry.

The Top 10: Watches & Jewelry

1. Timex

2. Seiko

3. Rolex

4. Casio

5. Swatch

6. Citizen

7. Swiss Army

8. Fossil

9. Bulova

10. Tiffany

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