How To Move Forwards While Looking Backwards – Innovation In The Watch Industry Part.4
In Part.3 we looked at how young watch-maker Romain Jerome is attempting to turn a concept into an icon, with the on-going development of their DNA of Famous Legends series. Today, we turn our attention to another, far more established brand who has already achieved all that and so much more. The challenges they face are somewhat different yet overcoming them are just as integral to the brands continued success.
The question is, how can you be innovative and forward-looking when so much of your brand’s identity is so inherently linked to one particular series ?
The Icon
It’s fair to say that when most people (well watch people anyway) think of Audemars-Piguet, they think of the Royal Oak series. To such an extent some might argue, that it almost seems like the other references live in the shadow of their famous big brother. Rest assured though that these other magnificent pieces, such as the Jules Audemars or the Millenary, are alive and well, and continue to reflect the sublime expertise of this highly respected Manufacture.
Nonetheless though, is it possible that the Royal Oak in someway inhibits the brand’s ability to grow, its ability to create and attract new interest? Arnaud Vidal, General Manager of Audemars Piguet France certainly doesn’t think so:
“Without any hesitation, no. The Royal Oak is for us and for our clients an iconic product and it’s important to remember, from a market perspective, that some brands struggle all their life to be associated with an iconic product. We, we have it, and our clients are very attached to it.”
Developing Not Just Creating
Certainly no arguments here, but what impact does this have on innovation? Especially when you consider that more than 50% of the brand’s revenue comes from one single model, what incentive is there to be developing new models? However, as Vidal rightly points out, innovation isn’t just about developing new models. It also involves developing the models you already have:
“Even at the unique scale of the Royal Oak and its declensions Royal Oak Offshore, we are in constant innovation, following three different axis : materials, finishing, and complications.”
Indeed Audemars Piguet owns one of the most powerful and productive R&D departments in the industry (Renaud et Papi) and it utilizes this facility to great effect. A perfect example of what Mr. Vidal is talking about is the Millenary Carbon, which features a case made from a combination of aluminium, steel, nickel, and forged carbon (the last of which is the equivalent of more than 100 kilometres of compressed carbon fibers!)
On the complications side, Audemars-Piguet also demonstrates their know-how, for instance with a superb tourbillon and a double cylinder which ensures 12 days of regulated autonomy.
Still though, this Millenary Carbon is a limited edition, a tactic which is becoming increasingly common in the industry and in this context makes us question whether the brand is relying on the Royal Oak for its core business and then creating limited editions to generate buzz for the brand?
Although many would consider this a commercially sensitive topic Vidal does not shy away and answers us without any ambiguity:
“No, and for four reasons. The first one is that we don’t need limited editions in our product range, as we unveil around thirty new items per year, amongst which limited editions are just a part.
The second reason is that our limited editions are designed as a special attention, a thanks for our closest customers. As a proof, each limited edition is almost completely sold out even before we produce it.
The third reason is that we don’t markup our limited editions, except, of course, with the potential additions we made to the standard version and that could impact the final price.
Last but not least, the fourth reason is that the limited edition concept, often seen as a sales booster, is on the contrary, for us, a constraint; we are a traditional manufacture with limited production (editor’s note: 25.000 units / year), and each limited edition that we make requires the use of our production tools and consequently slows down the production of our standard models.”
The Final Word
It seems that unlike some of the other brands we have looked at so far, Audemars-Piguet invests in innovation (at least in part) as a way of rewarding its loyal customers. Arguably a key difference here is that AP is a very established and well-respected brand and therefore isn’t as concerned with proving its merit as a watch-maker.
Regardless though, the knowledge and expertise gained from these special editions still flows down to the standard range, ensuring the company continues to produce innovative timepieces of the highest quality.
Category: Special Features
IMHO there’s a lot to be said for one-trick ponies and clearly there’s always room to improve a mainstay product line. In a way, it’s a bit like Hublot isn’t it? It’s certainly simpler to manage from a messaging standpoint – more focused. It’s like having a painting you keep touching up and re-positioning vs. a multitude of still-shot photos.
Also it gives people a sense of “security” – notwithstanding popular assumptions, people don’t really like choice very much – too much choice that is (and 3 or more is too much choice)- this is just my personal experience and in no way reflects the opinion of my employers
Bonjour Jérôme,
I do agree with you ! The industry is like moving towards smaller range of products : AP bets on its Royal Oak, Hublot has only 2 references, etc.
Usually watchmakers told us they wanted to capitalize on their historical references, but the fact is that they just want to reduce the number of references in the catalogue.
But at the same time, we must admit that well-known brands still have a large number of references, still alive after decades : Breitling, JLC, etc.
So IMHO, we have in some ways two kind of business models : very high-end watchmakers with only 1, 2 or 3 models. And then, mass-market watchmakers with still a large numbers of references (see the Chronolog of Breitling : 100+ pages !!).
This is not really new. But the new thing is that there is no space any more in-between for a “best of breed” approach. Well, to date, at least.
I must admit that I was very sceptical about Romain Jérôme, but their new CEO, Manuel Emch, is really impressive. Sounds like he has learnt everything from people like Mr Biver, and goes one step further. So, IMHO, we have to closely look at what he does – for RJ, or, maybe, later on, some other brands. Some people has an opinion on the market. This man has a vision.
Au plaisir de vous lire et merci pour vos commentaires toujours très intéressants,
Olivier Müller – The Watch Lounge
I think you’re right Olivier. Like in any business, watchmakers want to reduce their range and focus their attention on their most profitable pieces, although some of the bigger brands can’t do this as easily as the expectation remains from their customers that they will continue to offer all (or most) of their different references. Still as brands like Hublot are demonstrating, a limited reference approach can prove hugely successful if done correctly.