The global watch industry, by its own admission, has been slow on the uptake of modern retail trends: e-commerce remains a dirty word, social media (has until recently) been underestimated in its importance to sales, and staid boutiques remain an all-too familiar point of sale.
By contrast, the pre-owned watch market is undergoing a period of sustained growth, thanks in no small part to slick online experiences and a younger watch-buying demographic. As Robin Swithinbank reported in his recent New York Times article, "the pre-owned watch market already is worth $16bn annually", and represents almost a quarter of the overall watch market. It's enough to make the wider industry sit up and take notice.
Enter: Audemars Piguet. The independent Le Brassus brand is still owned by its founding family but, far from sticking to traditions of the past, has fashioned itself into one of the most forward-thinking manufactures in watchmaking.
The launch of retail concept AP House (a luxurious club for fans of the brand to discover its latest creations in a new, relaxed setting) signals a marked departure from the ubiquitous watch boutique, while the launch of a brand-new watch collection CODE 11.59 earlier this year was as bold as it was brave – and not without its share of negative press.
It will be interesting to see how these calculated risks pay off in the years ahead. With that in mind, who better to ask what the future holds than UK general manager, Daniel Compton? Boasting almost 30 years worth of experience in the luxury market – with sales roles at Gucci, Vertu and Chopard – Compton spent four years at Audemars Piguet before being promoted to his current role in October 2017.
We sit down with one of the finest gentlemen in the watch industry to find out more.
BW: Almost a year on from its launch, what is the consensus from collectors and buyers towards CODE 11:59?
DC: Code 11:59 was important for us as it’s actually been seven years in the making and to then launch with 13 new references was a big thing for us. We’ve always been known for bringing out different shapes in different forms in watches, long before the Royal Oak – it’s what we’re known for – so we’re delighted.
The results so far have been fantastic. But it’s not just that – we’re in it for the long haul here. It’s very important for us to add to the collection, not just to have the Royal Oak, Royal Oak Offshore, which are fantastically successful. So this has been a crucial addition already – and there will be more to come.
Are you finding there’s a different demographic for CODE so far?
Yes, CODE was about appealing to customers who really appreciate the heritage of Audemars Piguet and the integrity of how we make watch movements, but it was also about attracting new customers who perhaps aren’t obsessed with only having a sport watch in the Royal Oak mould, so that’s been important.
The noise around CODE 11:59 has been exciting because, really, it’s one of the most talked about launches for a very long time. It’s been in some parts mixed, but actually it’s been largely positive overall.
Yes, there’s a narrow area of the ‘watch geek world’ where there’s a relatively small number of people who chat very loudly within their own community. But then there’s the wider world who look at something new and judge it on its own merits once they’ve seen it. When we look at all of that, it’s actually been a great response – and the impressions and the amount of chat on social media has brought a lot of attention to this collection, which we’re pleased about, too.
How might we expect to see CODE develop in the years ahead after 13 references straight off the bat?
The thinking is certainly this is a collection very much for the long term, so there will be things that we can tweak and change in terms of the overall collection. The 13 references that we launched weren’t necessarily 13 new calibres, and they weren’t all complications, but it was just a big statement. There aren’t many brands that can come along and actually launch a brand-new collection like that.
We certainly want to allow the first pieces time to embed and to be uppermost in people’s minds, but yes, there are plans to grow the collection. You’ve already seen we’ve launched a perpetual calendar with a beautiful aventurine dial, we’ve used enamel on a few pieces, lacquer on others, so there are certain ways we can play going forward.
The thing that won’t change will be the form the case and the beautiful sapphire crystal shape that we’ve used.
What’s demand like when you launch a new watch. Do the phones ring off the hook?
My phone is full of messages from the moment we put a brand new watch on Instagram – there’s always a vast stream of collectors asking to be the first on the list. I know that our boutique managers get the same. Sometimes people you haven’t heard from in years, by the way!
My phone is full of messages from the moment we put a brand-new watch on Instagram
I guess that’s slightly to do with the increased demand for a grail watch and longer waiting lists…
We try not to refer to it as a waiting list for a customer because it makes it seem like you’re a number on a list and that’s all that matters, which is not the case. So the way that myself and all of our team interact with people about very sought-after watches is very important.
We’re particularly careful that if someone comes to see us for a watch that is generally known isn’t immediately available, that we still look after them and we use hospitality in the same way, even if it’s something we can’t provide them straight away. But invariably the question is still: “What number am I on the list”!
It’s a nice problem to have, but it’s still a problem because you don’t want somebody to have immediate negative thoughts about your brand. If that’s the case, it’s almost perceived that our watches are unobtainable.
One of the reasons why we are keen to run so much of our own distribution now is so we can better control that experience for the client so they leave with the right impression.
How do you control the second-hand market and people buying watches to make profit? As a matter of fact, can you?
In terms of pre-owned watches, I don’t believe there’s any way that a single brand can control the pre-owned market, or should want to if there’s going to be a healthy market – in fact, a very healthy pre-owned market, when one looks at the numbers.
However, I think it’s important to, rather than demonise it, look at it carefully and perhaps see how we can be a part of it when it comes to our brand’s watches.
One of our boutiques in Geneva already sells some pre-owned pieces. I’m not suggesting we’ll be there tomorrow, but we are certainly very open to looking at how we could work in that field in a limited capacity.
How do you market Audemars Piguet as an independent watch brand?
I think that status gives us a spirit of independence, which we believe allows us to be more nimble than companies that are owned by big groups. Sometimes there are beautiful brands, owned by big groups, they’re very well managed, but in the end there are shareholders that have to be answered to, which may drive decision making one way or another. Whereas for us, we’re fortunate enough to be a successful independent family-run business. And actually the family still sit on the board of directors, but allow our global CEO free reign to forge our direction.
We’re very proud of it, and love to share our founding family’s passion. Let me put it this way: I suspect it would be difficult to do CODE without the freedom of an independent business, and the full support of the board and family members – allowing seven years of development of the new calibres, plus the cases, plus everything that came together so we could launch in the way that we did.
Talk to me about where AP House fits into the watch world’s rethink with regards to the customer retail experience?
Our production is relatively limited to 40,000 pieces, at a relatively high average selling price. We also know that many people already know what they want before they come to us to a certain degree, or what collection they want to look at. So it means that having a street-side traditional boutique where someone comes and browses along Bond Street or Fifth Avenue to choose which shop they want to go in doesn’t apply to us.
The benefit of that – and what we really want – is to control the customer’s experience more. Our customers really want to be treated in a special way, so by having AP Houses in targeted cities where we know there’s a critical mass of enthusiasts, we can look after people in a very private, informal way, sometimes having almost no watches on display and just chatting about anything.
We’ll have the sport on television or have some music that’s being played live or we’ll just have a bartender mixing some cocktails.
The point is there may be a few watches around, but that’s not the main purpose to be there. You’re in the family. You’re in the club. Come and join us to spend your afternoon with us here. It’s OK to have fun!
We still have boutiques, absolutely. We’ve got two thriving stores in Sloane Street and Harrods, but AP House is where we can concentrate on real long-term relationships with the local clientele. Clients are our best ambassadors, and once they have chatted to their friends about being on a golf day with us or spending an afternoon at AP House listening to a jazz pianist live, others will want to see what the fuss is about. That means so much more to us than having 50sq m at street level, with watches lined up in a window.
It’s almost as much about being inclusive within that exclusivity…
I think that’s the easiest way to say it. Exclusive isn’t necessarily our favourite word – it means excluding, and we don’t want that. But AP House is definitely about creating an experience that you wouldn’t otherwise get.
We have a lot of customers who might come in with their teenage kids who actually know more about watches and watch movements than their parents – it’s not about excluding them, but rather showing an interest in them early on in their watch journey. These are kids who grow up in a digital age who in theory should have no interest in a mechanical piece, and actually have more interest than their parents, so we have to cultivate that.
I genuinely think there’s a huge potential for very bright people from 14 years to 18 years old who our industry can do very well with if we manage things correctly.
Give me one prediction for the future of the watch industry in ten years.
I think the way that watches are retailed will change hugely – not just AP House-like concepts, but private appointments, off-site locations, pop ups. I think that the traditional way of retailing watches in a kind of arcade style, soldiers lined up, I think that we increasingly will be moving away from that.
AP House is just the beginning.
For more information on Audemars Piguet or AP House, see audemarspiguet.com