The U.S. watch and clock market shrank 3.7 percent between 2001 and 2005 to $8.6 billion in retail sales, but should rebound to more than $9.5 billion, a 10.6 percent gain, by 2010, says Packaged Facts, a consumer goods research firm. Those evaluations come in the seventh edition of its “Watches and Clocks in the U.S.” report.

The U.S. watch/clock market has “faced extraordinary circumstances” since 2001, notes the report. “Nothing is more basic to modern life than having the time ready at hand,” but increasingly, cell phones, cable boxes, laptops, personal computers, personal digital assistants (PDAs), iPods, even DVD players and fax machines “provide all the time readouts one needs.” They also “siphon off” consumers’ discretionary dollars through their purchases and monthly payments for usage and services, which means “Americans have less to spend on watches and clocks,” it says.

Watches alone slipped 4.9 percent between 2001 and 2005 to $7.6 billion (and almost 90 million units), says Packaged Facts, facing what calls a “struggle” with personal electronic devices which give the time. However, the report expects U.S. watch sales to bounce back to $8.4 billion in retail sales by 2010, a 10.5 percent gain.

Clocks finished 2005 with $990 million in U.S. retail sales, a 3.6 percent drop from 2001. Influencing that, in part, is their “banishment” from public spaces (like restaurants and offices), which Packaged Facts calls “the casino effect” (because casinos have no visible clocks inside, so that people stay longer). However, a turnaround for clocks is also expected by 2010, reaching $1.1 billion, a 10.5 percent gain.

Reasons for these turnarounds, says Don Montuori, publisher of Packaged Facts, are that “watch and clock marketers continuously rebound with sophisticated fashion-inspired, high-tech and sports designs to keep consumers coming back for more. High profile licensing, particularly pervasive in kids’ watches and clocks, will continue to be a strong sales driver, [as will] designer names and logos” in all price tiers.

Other reasons, says the report, include the strong sports, kids and high-tech watch sectors; America’s “ever-greater sophistication” in personal appearance (and hence, fashion brand licensing opportunities for watch marketers); and (for clocks) the growing number of households and more sophisticated interior decoration.

Other highlights of the 284-page report include:

* A third of U.S. adults (69.9 million people) bought watches between 2004 and 2005. Two thirds were women. Others with “notably above-average” purchasing included students, people earning $10,000-$20,000, and members of ethnic minorities.

* Twenty-one percent of adults bought watches priced $100 or more. Young adults (aged 18 – 24 years) have “a surprising affinity for pricier watches,” from $50 to $500-plus.

* Watch and clock marketers spent $233 million on advertising in 2005 (almost all for watches). That’s 50.7 percent over what was spent on advertising in 2003 and 2.7 percent of total watch/clock retail sales in 2005.

The seventh of “Watches and Clocks in the U.S.,” priced at $3,000, examines U.S. market trends, distribution and retail channels, consumer behaviors and industry leaders. Go to MarketResearch.com or http://www.packagedfacts.com/pub/1208059.html.

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