Study: Affluent Consumers Will Buy Watches Online
Affluent U.S. consumers are enthusiastic buyers of fine watches, and a growing number of them are purchasing their timepieces on the Internet. Those are among the major findings of a USA Today report on ?American Affluence and the American Watch Consumer.? The report was released this spring at the international watch fair in Basel, Switzerland.
Among affluent U.S. adults, two of five (38%) bought a watch in 1999, and the ?average household expenditure? for a watch was $519, according to the report. ?Affluent adult? is defined as one with $75,000 or more in annual household income.
Among affluent USA Today readers (who earn more and spend more than the average affluent consumer), 44% own three to five watches, and the same proportion ?frequently look at watches when they are in a store.? Seven in 10 own a dress watch and an ?everyday? watch, half own a ?casual? watch, and four in 10 own a sports watch. The maximum they are willing to spend on a watch is $1,300.
Although 64% of affluent adults consider luxury watches to be a status symbol, and 62% consider them to be fine jewelry, they say their watch purchases are ?motivated by practicality, the desire for diversity, and individuality.? Three-quarters (77%) say they want a watch that reflects their personality, and 80% say they don?t seek out watches simply to impress other people. More than half of the affluent watch buyers surveyed (58%) would rather own several moderately priced watches than one expensive one.
The study reveals the Internet?s growing influence on watch consumption. It found that two of five (38%) affluent consumers consider the Internet a prime source of information for watch purchases. That?s close to the percentage of affluent consumers who cited magazine advertising and advice from family and friends as prime sources of information.
Ninety-two percent of survey subjects have shopped online, and 80% go online daily. Three of four say they would buy a watch online, and one in four say they would purchase a luxury timepiece online. Only 15% say they would buy a watch in a jewelry store, and 31% would shop for one in a department store. Ironically, watch retail shops, the choice of only 7% of respondents, rank lowest.
The most important reasons for shopping online, say these watch buyers, are ease of ordering (83%), price (82%), ?user-friendly? Web sites (72%), product information (70%), and brand name (48%).
The USA Today 2000 Retail Watch Survey of affluent consumers was taken in December 1999. The newspaper polled its 5,000-member reader panel and received 752 replies.
Skagen Named Winner of Chamber of Commerce Award
Skagen Designs Ltd., an international fashion watch company based in Reno, Nev., has been named a national winner of the ?Blue Chip Enterprise Award,? given annually by the U.S. Chamber of Commerce. The award is presented to recognize inspirational achievement in business.
Skagen was founded more than a decade ago by owners Charlotte and Henrik Jorst, who moved to the United States from their native Denmark. Since beginning the business in their garage, the Jorsts have expanded it into a major global brand that competes with the largest watch companies in the world and appears in major retail stores worldwide. The brand?known for its clean, elegant Danish designs?has expanded beyond watches to include sunglasses, jewelry, and home and office accessories. The firm employs 120 people at its Reno headquarters, its office in Copenhagen, and other locations around the world.
The Jorsts received the award in ceremonies held in Washington, D.C., in June at the U.S. Chamber of Commerce Business Summit Meeting.
The judges noted the challenges the Jorsts had to overcome and cited Skagen as ?a prime example of how small businesses have succeeded in the face of adversity while creating unique opportunities within their communities.?
Last year, Inc. magazine named Skagen to its ?Inc. 500? list of fastest-growing private companies in America.
Egana Acquires STI, Merges Operations
Egana of Switzerland (North America) Corp., whose mid-priced watches include Pierre Cardin, has purchased ST International, a maker of popularly priced watches, and merged the two firms. The integrated company will launch ?a major initiative to jewelers? this year, say company officials. It also plans to expand its operations in North America.
Egana of Switzerland (North America) is a wholly owned subsidiary of EganaGoldPfeil Ltd. of Hong Kong, whose products include watches, jewelry, and leather goods. Its portfolio includes the Pierre Cardin, Paolo Gucci, Cerruti 1881, and Dugena watch brands as well as GoldPfeil leather goods. Retail prices range from $30 to $250.
ST International, based in Fort Lauderdale, Fla., makes the watch brands Field & Stream, Outdoor Adventures by Field & Stream, Madison Gems, and Argento 925, a sterling silver line. Retail prices for its watches range between $19 and $169.
Egana will create a single management team to address marketing, merchandising, product development, and distribution of all brands. Thomas Clarkson, former ST International president, is the new president and chief executive officer of the new company?s Egana (USA) division.
The combined company will maintain Egana?s New York City marketing office and showroom. Development, design, and distribution operations will be handled at the ST International facility in Fort Lauderdale.
Movado Moves to Strengthen Supply and Retail Operations
The Movado Group opened its first ?shop-in-shop? at Macy?s Herald Square store in New York City in April. Features include an interactive unit with monitors that let customers view watches in close-up and at different angles, computer printouts about specific watches, videos of Movado?s products and activities, and a contemporary design using frosted Plexiglas and metal watch displays and special lighting. Movado also operates five boutiques and 22 outlet stores in the United States.
In May, Movado signed a 10-year lease on a 100,000-sq.-ft. facility in Moonachie, N.J., where it will consolidate distribution and warehousing operations now based in Lyndhurst and Wood Cliffs, N.J. The new and larger center will enable Movado to ?significantly enhance? distribution procedures, product handling, security, efficiency, and customer service, says executive vice president Rick Cote. Movado is looking for a separate site for its management offices, which are located at the Lyndhurst facility.
Reasons Affluent Consumers Buy Watches
|Source: 2000 USA Today Retail Watch Survey. Multiple answers allowed.|
Why Affluent Consumers Would Pay the Maximum Price for a Watch*
|* The maximum price is $1,300, as defined by affluent consumers who responded to the USA Today study.|
|Source: 2000 USA Today Retail Watch Survey.Multiple answers allowed.|