Seiko Corporation of America (SCA) is expanding its Seiko watch market upward into the $500 to $800 range, reducing the large retailer base for its Seiko and Pulsar watches and Seiko clocks by more than 10% each, and focusing more attention on “key retail partnerships.”
Details of the changes and how they will affect jewelers were discussed in company statements and a JCK interview with Les Perry, SCA executive vice president for sales and marketing.
Seiko has been repositioning its Seiko brand since 2003, putting more emphasis on innovation, refinement, and distinctive styling. In the U.S. market, SCA in the past year has expanded beyond its traditional category—under $350—where it dominates the men’s market.
“We’re not ignoring the under-$300 category,” says Perry, “but the industry has seen tremendous growth in the $500-$800 price range. There’s real opportunity there, and Seiko wants to be a strong player in that category.”
Since late last year, SCA has introduced Seiko’s Arctura collection for men ($400-$700), showcasing Seiko Kinetic technology and new design approach; the upscale Coutura Collection ($300-$500), some with diamonds, for men and women; and Sportura sport watches ($600-$1,000, with a limited edition at $3,500). Thanks to their success—the Arctura Kinetic Chronograph is a top seller for many accounts—Seiko already has about 13% of the $500-$800 niche, Perry says. Building on that with “plenty of products to support the category,” he expects Seiko to have 25% of that market—now dominated by Movado—within a few years. Overall, Arctura represents about 8% of SCA’s total business, but could also reach 25% within a couple of years, he says.
SCA eventually may introduce watch lines priced “north of $1,000,” says Perry. Seiko has been selling luxury-priced watches in Asian markets, including Japan, for a number of years, and all 400 pieces of Sportura’s $3,500 U.S. model are sold out.
As Seiko has expanded its market and repositioned its brand in the U.S. market, SCA has looked closely at its key retail partners—and where they’re located. Price points on its elite collections are now substantially higher than some retailers were used to, and SCA wants a consistent, active representation of its watches.
“We looked at two years’ worth of purchasing history and determined that some of our accounts did not fit the re-imaging criteria,” says Perry. “We’re marketing watches, not just selling them. So, we want key retailers who are partners with us in that, who understand the differences in looks, prices, and appeal of each of our lines, who give proper space to the brand, whose lines turn well, who have a balanced assortment of our collections and actively market the brand.”
About midway last year, Seiko began reducing doors in its major national accounts. During the first half of 2004—which Perry called “Phase Two”—SCA closed about 1,000 independent retail accounts for Seiko (about 1,250 doors, leaving less than 10,000) and almost 1,000 each for its revived under-$250 Pulsar brand (now under 7,000 doors) and for Seiko clocks (now less than 3,000). “A great deal of thought and research went into this decision,” says Perry. “We’d rather be important to fewer doors than unimportant in many,” he says.”
Strong relationships. The streamlining has cut across SCA’s lines of distribution, but the ratio of distribution remains the same: a third are chain jewelers, a third independent jewelers, and a third department stores. “We aren’t abandoning our core retail base,” says Perry. “On the contrary, we’re growing our business with our strongest retail partners, doing more business with fewer accounts.”
SCA is strengthening its relationships with these key retailers, he says, with more national, regional, and local TV and print advertising, including the new ad campaign tagged, “It’s Your Watch That Tells Most About Who You Are.” There also will be more events with retailers in-store or in key markets; more billboard campaigns; and more case displays, POP, advertising, and retail support programs.
The repositioning also means some changes in the marketing and media Seiko uses to promote its lines—”more InStyle magazine than People,” as Perry puts it. “With TV, for example, rather than take a shotgun approach, we’re doing more targeted marketing, or what the networks call ‘appointment programming.’ Advertising is directed to specific demographics which view specific shows, or is focused on specific cable channels. For example, we’re advertising actively to women on shows on the Lifetime network.”
Something else SCA may offer its key retailers is Seiko shop-in-shops, which Seiko has successfully tested in some stores in Europe.
SCA, based in Mahwah, N.J., is a wholly owned subsidiary of Seiko Corp., headquartered in Tokyo.