I have had the privilege of speaking with many micro brand founders in all price ranges and varying degrees of success. They are inspiring and many of them I look to for their thoughts and analyses on the micro brand industry. One question I like to ask founders is “who buys your watch?” or “who is your target customer?” I have heard very detailed responses all the way down to “I, for one, would definitely buy my watch” . . .”people that like watches” . . .”we won’t know until we start selling them!”…..
While these are a range of possible answers, they can also signal some pitfalls that can come with launching a watch brand. There are many types of watch buyers out there and every brand should be targeting one type and designing their watch in look, feel, and price to appeal to that customer. Some micro brands know their customer very well and do a great job, while others miss the mark. Below is my summary of the types of watch customers out there. Which type of watch buyer are you?
WHY MICRO BRANDS?
I have always been inspired by micro brand watches mostly because they are made by entrepreneurs willing to go out and try. They put their career, their money, and their time on the line to turn a passion into a job. I’ve sampled and reviewed many micro brand watches sold by some of the best watchmakers in the micro brand business. This winter, Watch Ponder even awarded the . However, for every brand that does it exactly right, there are many other brands that design a watch without identifying who their target customer is. When they do identify the customer, sometimes there is a mismatch between what the micro brand watch company is selling and what that kind of customer actually buys.
A NICHE VS. AN ATYPICAL CUSTOMER
Try to avoid thinking of the one counter example to each of these customer categories. I acknowledge that there are always exceptions. However, selling to exceptions is tough, especially in luxury retail where marketing can be very involved and expensive. There is a huge difference between targeting a niche customer and targeting an atypical customer. A niche customer is a clearly defined group that cares about very specific things. In contrast, an atypical customer is a one-off or a unique example– and there are very few people similar to them. If you are targeting an atypical customer within a segment, finding that customer and selling to them will be very difficult. You should focus your attention on the “polling averages” of each segment. Which type of customer are you? Which type of customer is your micro brand intended for?
Here are the basic segments of watch buyers. These categories are not exhaustive nor all-inclusive. There are many hybrid combinations of these categories. This is merely intended to summarize the primary large segments from my perspective. There are also specific niches within these segments that I have tried to specify where appropriate:
THE UTILITY “DOES IT TELL TIME?” CUSTOMER
This is the customer that buys a watch because it tells time. They very much care about function over form, but more importantly, they care about value. This customer is completely rational and sees a watch for what it is — a way to tell time. Even as a fashion accessory, this customer wants value. After all, there are many things people spend money on and not everyone wants to spend a lot of money on a wrist-size hunk of metal, plastic, and glass.
Accordingly, this could care less where the watch is made. This person cares strictly about the utility of a watch and is much more likely to buy a Timex than a Rolex. They might buy a Citizen or a Seiko, but only because they like the solar-charging features. 99% of watches look fashionable to them because a black rubber sports watch or a leather strapped dress watch all do the job. This person will only respond to advertising that shows more utility and value; they won’t respond to messages highlighting parts sourcing or complications. In fact, parts sourcing or complications are likely to turn this customer away because they tend to signal price markups. All this customer cares about is utility and value. The smart watch is a very appealing watch alternative to this customer.
FASHION ACCESSORY CUSTOMER
This person wants a watch that looks good. Mostly, they care about the watch as a fashion accessory and are not too concerned with the mechanics or parts sourcing. This customer really likes the idea of minimalist design (such as Daniel Wellington) as well as fashionable color combinations (e.g. the blue and green mix). The watch has to be eye catching, but remain an accessory and therefore cannot be the main show. This customer doesn’t care about brand names (unless it’s something trendy that their friends also own such as Daniel Wellington). Most importantly, this customer isn’t willing to splurge. They are generally young and aspirational but may have limited disposable income. They are interested in buying a watch as long as it doesn’t cost more than $300. They typically won’t ask where it’s made and if you tell them it’s an automatic movement, they may be indifferent or even prefer a quartz battery instead. Therefore, worrying about parts sourcing or type of movement for this watch will only cut into your margins and will be a selling point that the customer doesn’t care about. On the flip side, the buyers who do care about movements or sourcing will know that anything in this price range is not of premium origin. That’s why 95% of watches in this category are very nice looking, nondescript quartz watches. To try anything else is a product-market mismatch.
THE “LIKES WATCHES” CUSTOMER
This person will clearly identify themselves as a “watch person.” This is the customer that stops in the watch store in the mall every time they see one. They also like to cruise watch forums online and check out the latest watches. They’ve recently discovered Kickstarter and are not afraid to back a project. This customer doesn’t care as much about brand as much as they care that the watch looks cool, maybe has a story, and has some amount of heft to it (i.e. they can wear it daily without worrying about breaking it). They have a slight preference for mechanical movements, but it’s not enough of a selling point to break the bank. They own a variety of Seiko, Citizen, Casio, Invicta, and a few micro brand offerings and could have 20-30+ watches in their arsenal. However, they rarely spend more than $500 on a watch and have never spent more than $1,000. They would rather save that money to buy two or three good watches in the future than one over-priced offering today. These customers care about the story, the inspiration, the design, and the uniqueness — they are not afraid to try something new.
FIRST TIME SWISS BUYER
This customer started off as one of the previously mentioned customers but has decided it’s time to upgrade. They are now willing to spend a little more, but they are not willing to spend above $2,000 and that is likely a stretch. They aren’t as up to speed on the Swiss brands as a independent but well-known brands. This customer cares that a watch is an automatic, but could really care less that it has a movement made by ETA or someone else. They care mostly that it is reputably “Swiss Made”. This customer is willing to read about a micro brand and become more educated, but when it comes time to actually buying the watch, they always go with a brand they know., but they are interested in learning more so they do a fair amount of research before buying. They care that a watch is “Swiss Made” and that it comes from a brand they’ve heard of. No value offering from a startup micro brand will sway this person from buying the Swiss offerings from Swatch Group, Richemont Group, or the other
THE IDENTITY CUSTOMER
This is another key customer group for micro-brand companies. This customer wears a watch because it is an identity statement. They either work in a profession where the watch-as-identity is prominent (such as aviation or diving) or theywith those hobbies or professions. (While a harder identity to foster, it could even be that the customer likes the founder’s story and identifies with it — this has led me to become an admirer of many micro brands). This customer deeply cares about the heritage or the development behind the watch and the story that goes with it.
The watch must have some key physical characteristics that make it aor a “dive watch” or a “racing watch”, but outside of those key features, they want something that will stand out as a conversation piece. On the flip side, if a watch has those physical characteristics but there is no correlating story or identity association, the customer is not interested. This customer really enjoys the watches put out by Breitling or Bremont and might also strongly identify with the Omega Speedmaster or Seamaster. To some of these customers, the brand is very important, to others, the brand is secondary (or tertiary) and they are open to trying something new and unique. However, micro brands have to have a clear and correlating identity for this customer to be interested. They will not even notice a brand if the identity is not a clear message. (For example, many Swiss companies make pilot watches that no pilot ever buys because that is not the identity of the brand).
“IT’S A GIFT” CUSTOMER
This customer is buying a gift for someone else whether it be a spouse, partner, significant friend, or their son/daughter. This customer segment diverges in two directions.
There is the prestige gift buyer who is going to buy a well-known Swiss brand no matter what. They will start with Baume & Mercier and might shop their way up through an introductory Rolex. This customer cares solely about brand reputation and wants something safe they know the recipient will like and be proud of. They are risk-averse buyers and not willing to take any chances. If they have any concerns that the recipient is a watch snob, they might even let the recipient choose the watch they want instead.
The other flavor of the gift-buying customer is the budget shopper. They are only in the market to spend a maximum of $300-$400. They are not a watch snob by any stretch and already feel they are spending too much for a watch, but are willing to splurge for a loved one. They are brand-agnostic so they would be willing to buy something bold and new –as long as the design is safe. The problem with “safe” designs is that they look like every other watch out there and garner little attention from other customer segments. These gift-buyers are most similar to the fashion watch customers (see above) except they don’t really care about watches themselves, they just feel like it’s an appropriate gift.
THE BEDROCK MANUFACTURING CUSTOMER
This customer cares about the source of the product or the company making it more than anything. “Swiss Made” doesn’t matter to them. Is it an American company? Is it German? Are the parts 100% made in Switzerland? Does it qualify for “Made in USA”? This customer comes in two niches.
The first cares about the company being American or German or Norwegian or etc. They want to know the company is (at a minimum) assembling in that country and that the company is employing locals to do the work. Shinola is a great example of building this as their value proposition. The bedrock customer cares about the company more than the watch design itself. As long as the company offers a good looking watch, this customer is interested. However, they want to KNOW the company is owned and operated by people of country X. These customers operate in all price ranges and might not be traditional watch buyers. However, they are most likely to buy in the $1,000 ~ $5,000 range. Below $1,000, this customer falls into other more predominant categories of customers (see options above). Above $5,000, the average buyer begins to look into prestige brands (unless the bedrock manufacturer is also a prestige brand or watchmaker such as Arnold & Sons, A. Lange & Sohne, Roland Murphy of RGM, Jeff Nashan of Montana, etc)
The second (and very small customer subset) is the person that cares about where ALL the parts come from. They will email you before they buy to make the founder put in writing where all the materials came from. They genuinely want to know where you sourced the case from and what model movement is inside. They don’t care as much about sourcing from a bedrock identity perspective, rather they care because they feel it is implicit in the quality of the final product. The downside of this type of customer is they are tough to please. No matter the efforts you went through to source your parts, a global economy makes sourcing too gray for most of these customers to be satisfied. If you go to the efforts to produce and verify 100% sourcing, your watch will cost so much that these customers will be tempted by more prestigious options. They will go with a brand they know instead which offers watches in similar price ranges with brand recognition. Additionally, the information campaign is tough for you to manage. There are too many forums where people will unintentionally say incorrect information about your brand. Despite efforts of blogs to tell your story (such as this article I wrote about “Made in America”), people searching the web for information will get nervous about your brand because of what the forums are saying about your parts sourcing. This is an extremely difficult and expensive segment to operate in.
This customer is a serial watch buyer. They own a little bit of everything, but mostly luxury watches. They have their nostalgic pieces as well as their show pieces. This person wears watches that you think they could never afford, but that’s because they live in a tiny house, drive a used car, have a 10-year old TV, and spend all their money on nice watches. This buyer regularly participates in watch forums and blogs. They are always in the market for the right watch at the right price. Whether the company is Swiss, American, German, Dutch, Japanese, etc., this buyer cares about quality, design, and uniqueness. This buyer is a tough sell though; they do a lot of research and know their options. Because they have quite a few watches already, refreshes of existing models from the traditional brands aren’t that appealing, yet when an actual new model hits the market, they are the first in line to buy it. To sell to this customer, the offering must be mechanical in movement, it must have a unique or bold design, and lastly, it has to offer a high quality to value ratio. Look-alike watches or “new” takes on existing styles are quickly ignored. This customer might also care about the same things as the “Bedrock Manufacturing” or “Identity” customers. They generally spend $2,000+ on watches (sometimes more, sometimes less) but definitely won’t buy a watch unless it clearly stands out.
WEALTHY BUT NOT THAT INTO WATCHES
This customer is very wealthy and appreciates a nice watch but may not know a tremendous amount about them. They are willing to buy a Patek Philippe, Rolex, or even something nicer. They are practical and own their Timex for running as well as their one or two nice watches. Whenever they buy something new, they trade in the old watch for the new one. This customer goes with recommendations from their trusted salesperson in their favorite store. In fact, they probably don’t do a whole lot of shopping around, rather they have their trusted store and they shop there every time. This customer will usually not buy a micro brand watch unless they have a special connection to brand or the founder (e.g. it’s a local company or they know the founder). A micro brand competing in this sector must have something extremely unique, luxurious, and high quality. To compete in this sector, you have to be on par with Jaeger LeCoultre, Vacheron Constantin, or Audemars Piguet yet offer a better quality to price ratio. On the flip side, these customers are extremely hard to convince to try something new, so trying to aim for these customers could mean very involved selling and relationship building.
THE WATCH SNOB
This customer is a Kickstarter.. They will tell you they are a watch snob with no qualms. This customer only buys Swiss (with the exception for A. Lange & Sohne, Grand Seiko, or RGM). To buy anything else would be to defy their own standards. This person cares about everything from the watch, the strap, the buckle, and the box it came in. They spend $10,000+ on multiple watches and they care that every piece and part is correct. This customer must always know that their watch is premium and is not afraid to get involved in a “which is better” debate. While a few of these customers would be interested in micro brands, most are not. Some even view micro brands as a tarnish on watchmaking. The customers in this segment that are interested in micro brands are very few and the only micro brands that appeal to them are the prestige micro brands that are actually closer to independent watchmakers. They would never buy a watch off of
The targeted customer segment matters. Above I have laid out the major segments of watch buyers (though there can be many hybrids or combinations of these). A brand must know who they intend to buy their product and then design the product accordingly with appropriate features and pricing. Remember, targeting a niche is great, especially if there are no others operating within that niche. However, targeting atypical customers is where things get risky. Too many micro brands come onto the market with an “if I build it, they will come” mentality. There are too many watches being made without specific buyers in mind. My final thought is know thy customer.
If you want to know more about, read this other article and check out the recommended articles below.
The post The Different Kinds of Watch Buyers. Which Are You? A Critique of the Micro Brand Watch Market appeared first on Watch Ponder.