Page 18 - The Summit of the Americas 2021

INSIDER

2020 Watch sales in Travel Retail and a look toward the future

Let’s start with some good news.
Despite whatever catalytic effects
the global public health crisis had on
online purchasing of consumer goods,
e-commerce only accounted for a relatively
small percentage of retail sales. According
to Stats Canada, for 2020, Total U.S.
retail purchases were $5.6T with 14.1%
attributed to e-com, and Total Canada retail
was $606B with 8.1% attributed to e-com.
What might one infer from that? That
the “retail apocalypse” is not nearly as bad
as anyone imagined. That the brick-and-
mortar retail location is still an important
point of sale, and cogently, an important
point of experience.
So while watch sales in travel retail
definitely took a shocking blow, it will
not remain so forever. Granted, cruise
ships have been laid up, and based upon
geographic regions, travel bans have
delimited transit through international
airports.
Early bright spots include Hainan
duty free in China, where most serious
watch brands are investing, hedging their can see 2020 sales were affected differently preowned) platforms, and the wearable
bets that this destination will be of major by price segment. The assault on entry (smart watch) segment.
importance in helping sales recover from level Swiss watches by wearables, and Duty free operators should focus
2020. According to a report on March dominated by the Apple Watch, shows no on best-performing price segments,
22nd in the Moodie Davitt Report, sales sign of abating. Duty free operators may introducing some sort of experiential
continue to soar in this market. While want to look at which pricing segment(s) interaction at the POS, solid value
this will help, it is not a cure-all for what deliver their best sales results, and focus propositions for the traveler, and an
ails the global watch industry. Let’s look on those segments, as every cubic foot (or assortment of current collections, including
pictorially at some recent figures from the meter) must deliver KPI results. novelties. An overwhelming smorgasbord
FH (Fédération de l’industrie horlogère In conclusion, we can likely safely of aged inventory from the COVID period
Suisse), as reported last month in the online assume that once travel resumes via air will likely not generate the sort of sales
newsletter, Horas y Minutos: and sea, sales results will steadily climb results desired, and could reflect negatively
From the main markets, we can again, though it may take several years for on the retailer. This challenge will require
see that strong sales in China in second figures to recover to pre-COVID levels, an investment of capital and clever
semester 2020 helped bolster sales, making if they ever do. There continues to be an planning, strategic alliances with brands,
the net figure slightly positive. 2021 sales evolution of competing enterprises that and a capable sales staff.
in China, and especially Hainan, continue include growth of brand-owned boutiques, Finally, those interested in the
to help. But looking at the graph below, we D2C (direct to consumer), CPO (certified important KPI of sell-out figures should
consider the subscription based Mercury
Report, which includes data on over 10 key
markets, including travel retail. See: www.
mercuryproject.ch

Mark Lewis-Jones is a member of the
Board of Advisors, Watch Trade Academy,
Neuchâtel, Switzerland
Caribbean / LatAm Representative, Watch
Distributors Directory, Switzerland.
mark@watch-trade.academy

The Virtual Summit of the Americas Issue April 2021 18