Retailers Still High on Watches

Are watches passé?

That’s what many news and blog reports worldwide claimed in recent months, citing widespread use by young people of cell phones and iPods, which have time displays. In March, JCK reported on watch industry leaders’ reaction to that.

Now we turn to those who actually sell timepieces and deal with the watch-buying public to find out what they think. Earlier this year, JCK surveyed hundreds of U.S. retail jewelers of all sizes in all regions across America. We asked them about their watch business with young people (under 25 years of age) and whether they agree that wristwatches’ days are numbered.

By an overwhelming majority, they believe the watch business is thriving. They cite three reasons: fashion, status, and convenience.

Here, in their own words, are retail jewelers’ answers to our questions about cell phones, young watch buyers, and the future of the watch business.

Is the watch business dying?JCK‘s poll of retail jewelers who sell watches finds four out of five (81 percent) say no. They don’t agree that watches are being made obsolete by cell phones, iPods, and similar devices. Many cite their businesses as proof, some using the same word—“steady”—to describe their watch sales.

“People are still buying [watches] at our 50-year-old store,” says Ken Corey, Dubes Jewelry, Janesville, Wis., while Michael George, of M.S.G. Jewelers, St. Louis, notes, “We still sell watches of style regularly.” For some, watches provide significant revenues, such as Traditional Jewelers in Newport, Calif., where they represent 50 percent of sales, says owner Marion Halfacre.

One measure of demand for wristwatches, say some jewelers, are watch batteries. “By the amount of batteries we replace, they’re still selling,” says jeweler Steven J. Bartle, Mukwonago, Wis. “We have people bringing in multiple watches at a time.”

Even those who acknowledge that watch sales to young adults are slipping (30 percent of those polled), say that doesn’t affect overall sales. For three out of five jewelers surveyed, young adults represent 10 percent or less of their watch buyers (though the remainder, they’re up to 25 percent). “The young-adult watch business is dead—but we’re selling more watches,” reports a jeweler in Virginia. “[Watches] are dying a natural death with young people,” agrees Jann Anderson, Erik Jewelers, Tonawanda, N.Y., but “our generation still likes time close to the wrist.”

Consumers over 25 years of age continue to buy watches. “My older customers have multiple watches,” notes Hy Goldberg, of Safian & Rudolph Jewelers, Philadelphia. Gift buyers also buy watches. “We still sell [watches] as gifts [for young people] from parents and grandparents,” says Dana Matheny, owner of Star Jewelers, Broken Arrow, Okla. In Springfield, Mo., “We have parents buying graduation gift watches, which the kids usually choose,” says Jane McElvaine, of Maxon’s Jewelry.

Young professionals’ widespread use of cell phones and iPods hasn’t hurt sales of more-expensive watches, either, note many jewelers. “The high-end watch business has a different customer and isn’t affected,” says Phoenix jeweler Tom Schmitt.

Are cell phones and iPods replacing watches as time tellers? Many jewelers—like many watch brand execs—say that watches’ raison d’être is no longer simplyto provide the time. “For many people, a watch isn’t a practical need, but a fashion statement,” says San Antonio jeweler Aaron Penaloza. “If it was only about practicality, we would all be wearing Timexes.”

“If watches have become less important for their timekeeping function, they’ve become far more important for their ornamental value and as fashion and/or prestige icons,” says Stephen Alie, A.E. Alie & Sons Inc., Portsmouth, N.H. That’s why, even if “the practical use of a wristwatch is declining with the universality of cell phones, fine watches will always have a place in one’s wardrobe as a fashion item,” notes Keith Rivenbark, CMI Jewelry, Raleigh, N.C.

Some jewelers suggest watches shouldn’t be promoted primarily as “time” pieces, but as fashion accessories and, as many say, “jewelry that tells time.”

“The wristwatch is still considered by men and women as an item to have when people get dressed,” notes jeweler Steven Reiner in Houston. “Many of my customers purchase several different styles from us.”

For women, the wristwatch has become a trendy, stylish fashion accessory, say respondents, while “it’s an accessory and a status symbol for men of any age,” says Colorado Springs, Colo., jeweler Charles Zerbe. “A watch is one of the few jewelry items many men consider OK,” notes Aaron Peñaloza, of San Antonio. “They won’t wear a bracelet, but a gold watch is acceptable.”

“Men love to wear a nice watch,” says jeweler Barry Peterson in Ketchum, Idaho. “I have customers who have large watch collections and keep adding to them.”

What do watches have that cell phones don’t? Many jewelers cite convenience. “Most people like the ease and availability of looking at their wrist [for the time],” says Randy Wolgemuth, of Kosers Jewelry, Mount Joy, Pa., while jeweler Phil Silverstein in Anderson, N.C., notes, “The convenience of looking at your wrist is a lot better and faster than reaching into your pocket or purse to see what the time or date is.” As Kathy Dinner at Wright Jewelry in Hudson, Maine, puts it, “People still like their wristwatch habit.” And Ebensburg, Pa., jeweler Dan Decker says, “Until you can wear your cell phone or PDA on your wrist, it won’t be convenient.”

Survey respondents also note that many consumers buy a fine watch because they appreciate craftsmanship or consider a watch a status symbol or fashion statement. “That it also tells time is a bonus,” says Gary Hill, Leo Hamel Co., San Diego. “An individual who respects the length of time, precision, and patience to hand-assemble a timepiece sees no similarity to [getting] time via a cell phone,” states David Mazer, of Bernie Robbins Fine Jewelry, Newtown, Pa.

Just as important, a fine watch—unlike a cell phone or iPod—can be “an icon of wealth and stature,” as Nick Fratto of Anthony Jewelers, Palmyra, N.J., comments, echoing many jewelers. “They’re status symbols,” says Bradley Marks, I.W. Marks Jewelers, Houston. “People know the kind of person you are by your watch.”

Freehold, N.J., jeweler John Ballew notes that an iPod can’t indicate status the way a Rolex does. “An iPod or cell phone isn’t a piece of jewelry,” says Phil Silverstein. Many jewelers stress that a watch can be.

Have young people stopped buying watches? That depends on whom you ask. While 30 percent of jewelers see fewer young adults buy watches, 19 percent see more of them, both young women and young men. Of those, 35 percent say the number of young female watch customers is increasing, while 65 percent are seeing more young men. Fifty-one percent have seen no change in watch buying by their younger clients, whether or not they own cell phones and iPods.

Many jewelers commented on their personal experiences with young people. “I have a teenage daughter, and her friends all wear watches,” notes Diane Cooper, of Parks Diamond Jewelers, Texarkana, Texas. Lon Hardy, Riddles Diamond Centers Inc., Minot, N.D., says, “I still see young adults in the store on a regular basis, looking at and buying new watches. Several have more than one. Watches are still a useful tool and jewelry fashion item [for them].”

Some suggest the roles of watches as status symbols and accessories may be more important to young people than to adults. “It’s true young people use cell phones for time, but they still wear watches for fashion and prestige,” observes Kettering, Ohio, jeweler Fred Weber. “Young adults are very style conscious, and stylish watches are very much in vogue,” notes Alan Meltzer, Arts Diamond Jewelers, Canton, Ohio. Ann Arnet, of Arnet Jewelry, Yazoo City, Miss., agrees. “Most young people have several watches in different styles,” she says.

“The young buyer is much more aware of brand recognition,” adds Jim Rogato, Sawyers Jewelers, Laconia, N.H. “They want what they see on the small and big screens, these symbols of status.” Other jewelers point out that many brands use celebrities as spokespeople for their watches, a ploy they wouldn’t use if they thought young adults weren’t paying attention. As Jerry Gause, Gause & Son Jewelers, Ocala, Fla., observes, young adults “still want brands and status and still dream of TAG Heuer and Rolex watches.”

What about the future? Are wristwatches’ days numbered? Most jewelers surveyed don’t think so. Even if young people in their late teens and early 20s don’t buy watches now, they will as they get older, many say. “As young people graduate and go into the business world, they desire a watch for time, and women will get more into the fashion aspect of a watch,” says John Hayes, of Goodman’s Jewelers, Madison, Wis. Meanwhile, the high-tech features of many watches will appeal to adults, especially men, in their 30s or older, says Mark Binkley Sr., of Cooper & Binkley Jewelers, Brighton, Mich.

Not everyone is confident. Twenty percent of respondents agree with Sumter, S.C., jeweler James Markides that “the watch business as we knew it is dying.” But the reasons they give have little to do with cell phones. Some cite online competitors. Another reason, says Markides, is that some watch brands popular with young people “prefer high-traffic department stores over a small ma-and-pa jeweler.”

David Coll, of Montclair Jewelers, Oakland, Calif., suggests that jewelers didn’t “change with the times and continued to sell a higher grade of watch than the consumer was willing to pay.” Another “leading downfall,” he adds, are watchbands integrated with watches, because consumers opt for “a cheap new watch instead of buying a new watchband.”

Still, most jewelers say the watch business is healthy and will remain so, especially as wristwatches continue to evolve.

“People still like to buy watches as a special occasion/remembrance gift for graduation, anniversary, retirement, corporate, and so on,” notes Joyce Welken, Bixler’s Jewelers, Easton, Pa. Echoing many respondents, jeweler Scott Ayres in Casper, Wyo., says confidently, “I believe there will always be a market for the wristwatch.”