You’ve surely seen the movie trope of the reluctant first-time paratrooper, right? Shaking out of their boots, the crewman had to jump up to the struts on the airplane, swing like a gymnast, and kick the terrified trooper, launching them flailing into a vast cloudy expanse.
In these early days of the Great Recession of 2020, brand teams from luxury watch companies are clenching the sides of the airplane, looking far down but unable to see the ground through the thickening clouds. Unless you’re Warren Buffet, it’s nearly as terrifying as the first-time jumper. But, like absolutely everything that’s ever happened to you–think about this for a brief moment—this is transitory, and will surely pass. Where will we land? What can we get started now, so as to land gently, or maybe even where we were supposed to?
You and your team are probably brainstorming over Skype or Zoom, in a kind of haze, productive only in the way that groups support each other through a tough time. But we’re fast approaching a need to get our collective shit together and in times like these, “the way we’ve always done it” can thankfully be challenged with little risk. And yet the ideas are everywhere and nowhere; here’s our goal: what can we do in the next 18-24 months to ensure the brand is relevant and lively going into 2022 as well as the next several decades?
Let’s focus on one link of the luxury watch market’s distribution chain: the AD – the authorized dealer network, which, absent a Plan, will surely be gasping for breath when we emerge from the recession. Most importantly, what can we do to not only revive the channel to its past glory, but also leverage it to expand our market to excite future buyers, all while keeping the unofficial markets at bay?
Lessons Learned from 2008
Online industries, established but nascent prior to 2008, gained a decades-long foothold in the midst of the recession. Netflix, offering a variety of convenient, price-sensitive options, methodically hammered the nails in the coffins of brick and mortar video stores. Online travel agencies decimated the personal travel agent network, reducing their numbers by 13,000 in just one year. The watch industry fared no smarter. With bulging supply, watch distributors and brands “destocked” to online resellers like Watchfinder. This was like fueling a rocket with which to escape the gravity of the-way-it’s-always-been-done. Then with scant energy needed to nudge online retailers into the vacuum of the retail space, this parallel market actually saw growth of 10% from 2008 to 2009 while Swiss exports of watches fell by 24%. This shiny group of online competitors ended up comprising 25% of the overall market that year.
This emergent unofficial reseller market is fragmented, however, with a small group of large vendors (like Watchfinder) succeeded by hundreds or thousands of people selling watches on eBay or Instagram from their living rooms. These small resellers buy stock at a discount from dealers primarily in APAC, then sell it online. But the number of these resellers will almost surely diminish dramatically, given the supply problem (travel to the Far East) and the demand problem (recession). This will shake a nagging pebble from the watch companies shoes but just for the time being; luxury markets have a unique characteristic: they recover quickly from downturns. But this reversal may be different from the last.
No Help This Time Around
Lore has it that the rich barons of the depression era deliberately dented their expensive cars to appear more relatable to the poor. The wealthiest of consumers are never really bothered by trifling events like a global recession, of course. But they are less conspicuous with their spending; it wouldn’t do to lay off thousands of workers and have the CEO pull into their reserved parking space with a new Maybach. This small, but fickle consumer class will always be around to keep the luxury industry afloat, if only just barely.
The 2008 global recession dented the luxury markets for only two years, with little thanks to those discreet CEOs. In 2010 the rescue of the luxury industry was largely impacted by the emergence of a new wealth class in China. Between September 2009 and September 2010, the Asian-Pacific market (excluding Japan) saw sales grow from €771 million to €1.2 million compared to sales in North America that increased from €325 million to €489 million. Will a new cohort of conspicuously wealthy Asian-Pacific buyers appear in 2021? Not likely.
But with some managerial courage and a plan, brand teams can, however, accelerate the recovery with an unlikely hero–you guessed it–the authorized dealer.
A watch, especially a new model, needs to be seen and tried on to know if you’ll like it. You see, case sizes and shapes don’t work for every wrist. A watch that’s 14mm in height might actually slip under your cuff more easily than one that’s 12mm. Or a watch with a 42mm diameter might look smaller than one that’s 38mm. And buying the right watch can be confusing; which Speedmaster limited edition would be right for you? Today, sadly, the primary benefit to the AD is finding the right watch then buying it online that evening. But it’s not just price that keeps buyers from pulling out their credit cards at the AD.
ADs have a couple perception problems. I went into a local Rolex dealer to have my 1971 Submariner pressure tested, which I do annually. The only clerk in the watch section had no idea what it was, which was only slightly surprising – it is an unremarkable watch. But more telling was a gent perusing the Omega counter, wearing a Patek Philippe Nautilus. While the clerk, tongue between teeth, was focused on writing my service ticket, she had not even acknowledged the potential Omega buyer wearing the €65k watch. Finally, feeling a wave of compassion, I whispered to her that “that guy over there is wearing a €65k watch. You need to go over there, now.” She casually slithered away towards him.
Some people also perceive condescension at authorized dealers. YouTuber Adrian Barker is not the only legitimate buyer who feels like they need to dress up when going into an AD. And Adrian is a good looking man, albeit a couple decades younger than the luxury watch age demographic. Even if the reality is that the clerks at ADs feel no superiority whatsoever over a guy in a t-shirt and jeans, this widespread perception is reality: in order to get respect at an AD you’ll need to look and act “wealthy”.
So here’s the good news and bad news. The good news is that the very apparatus which is systematically dismantling the travertine stones of the AD can revive their relevance. The bad news? Watch companies will have to undergo a substantial marketing mindset makeover – one that will transcend the gravity of doing things, “the way they’ve always been done”.
Stripping Wallpaper Is So Rewarding
Authorized dealers need to get smart, shed the perception of looking down on casually dressed patrons, and offer enough value so the client is overjoyed at paying full retail. The education of clerks is completely do-able, even if remembering every obscure reference number is not necessary. With passion comes a desire to learn, and brands can do a lot to stoke appreciation for a brand and its mechanical watches. There is a model to follow to get this done in 12-18 months worldwide.
Approachability will be the tougher nut to crack. How do you strip off all those layers of dated, exquisite wallpaper to see the plaster of a kindly, grand old manor? Every company has a few Brad Leones – the goofy, fun, but seriously experienced food editor fermenting everything from egg yolks to kombucha at Bon Appetit. He may be more of an entertainer than chef, to be sure, but his passion has teenagers preparing roasted tomato flatbread instead of ramen. I’m not advocating that brands or their ADs post goofy content, but to put a point on it, your brand story needs to be…younger. In fact, major brands need to own a narrative that’s grounded in “Swiss Made since…”, but built on with compelling, updated elements.
Watch brands need to start stripping away the layers of dated, exquisite wallpaper. And if you’ve ever actually stripped wallpaper, you know it takes a plan, the right tools, and lots of patience. But, if done methodically with the full support of the brand owners, the image and perception problems of the big brands can be overcome more quickly than the education deficit.
More good news for the brave leaders is that, judging by the Instagram accounts of every established luxury brand, there’s nowhere to go but up for an early mover to stand out. I’m reminded of an Instagrammer who loves to post pictures of his Grand Seiko from the North Pole – garnering only about 30 Likes and no acknowledgment or amplification from the brand. Meanwhile, followers see wallpaper on their Instagram feed.
Discarding the stuffy perception of a luxury watch dealer will do more than open its doors to the watch enthusiasts – it will open new markets. Young women are just as inclined to be fascinated by the permanence, craftsmanship, and workings of a mechanical timepiece as men; they’re just not marketed to. Would a couple of fun-loving young women with southern US accents be taken as seriously at an AD (or boutique) in Geneva as a well dressed man in his fifties? Let that question linger a bit as you wind your Calatrava, because that answer could be, “yes”.
Combining the more approachable demeanor with a genuine passion and compelling narrative for the brand will go a long way to justifying the full retail experience and cost for customers.
The New Business as Usual
Luxury brands have quite narrow consumer segments. Unfortunately for watch brands, that segment is older, and younger buyers will need some formative marketing. But unlike the younger consumer in the 1980s, Millennials are no longer constrained by a suit in the office (or even an office). If you think they’re being marketed to effectively by the big luxury brands, take a look at some content from a few established independent brands like Bremont, Farer, or Autodromo. They are selling an experience with a product. They each have a defined narrative–whether it’s racing vintage Porsches at the Mille Miglia or going Mach 2 in an F-15 fighter jet. They celebrate and repost user generated content from enthusiastic buyers. Big luxury brands shouldn’t copy what the independents are doing, of course. But sponsoring golf championships and celebrities worked for the last generation.
Will watch brand teams use this moment in history to fuel a marketing strategy that sterilizes the online market before it has a chance to re-multiply? Will they become more relatable to younger and more diverse buyers? Or will they return to business as usual once the fog of this health and financial crisis lifts? Unless the answers are “yes”, watch brands and their authorized dealers will continue to be marginalized in both perception and profits.
Lower your risk, improve your results, and save budget with Mattr’s influencer advisory service. A world top 50 marketing company since 2011.
Your show is cancelled and you need to spread the word about your new products: watches, over-the-counter drugs, tech solutions and apps, cars…the list is large. And this may be the beginning of the end for shows like Baselworld, a premium watch and jewelry show located in Basel, Switzerland. Brands had already begun pulling out; its exorbitant prices for vendors is well publicized. Covid-19 simply flipped up its hood, rolled its shoulders like a prizefighter, and swung its scythe. This reaper quite possibly changed the way we will do business forever.
The confusion was evident for companies such as the Seiko Corporation and its “Lexus” division, Grand Seiko. The release schedule appeared to be uncoordinated; slapdash. For example, Grand Seiko released four watches in one day, including a 60th anniversary edition in three colorways. Seiko, not to be outdone by its Zaratsu-polished brother Grand Seiko, released six watches over two days, each in multiple configurations. And oddly, one release was a 55th anniversary edition of three divers watches.
(Grand) Seiko was surely not alone in its PR tachycardia. Check out the dizzying number of releases from Timex, for example. As with (Grand) Seiko, their mission was to gain awareness. Did they achieve it? We’ll never really know (nor will they), because of the fuzziness of billboard attribution. To survive into the next decade and beyond, the watch industry will need to do what other consumer markets have figured out: get organized, gain consumer trust, and most importantly, expand into new segments such as millennials and women.
They are sharply cynical. But you need them
Millennials, now between the ages of 20 – 40, spend more than any generation of their age in the past. They are educated, expect to buy online, and sharply cynical consumers. The authorized dealer distribution strategy is not relevant to millennials and quickly losing its place among older buyers as the grey market matures. So Influencers would seem to be a solid strategy to market to the watch enthusiast segments.
But the premium watch industry has a mobile phone-type relationship with influencers. Currently, brands send watches to YouTube reviewers, who mostly offer up surprisingly unbiased opinions. This strategy is dead-on perfect for watch enthusiasts who sometimes need to hear an opinion, especially about how the watch will “wear”. So how will they excite new segments? Digital ads? Social? Celebrity endorsements? None will be effective with younger markets because of their voice: the brand.
So-called “negative influence” occurs when brands post ads viewed as cliche or deceptive or when consumers see the ads too frequently. Like the glee and catharsis which occurs when consumers post a vitriolic negative review, they will go out of their way to screw you. This goes for the influencer channel as well, so you better choose wisely.
Sorry, you just don’t have it
Influencer Marketing, as we know it today, has been around for nearly ten years. The growth curve is phenomenal: when my company first entered as a provider in 2011, the market was estimated to be under $500 million. Now, brands are looking to spend upwards of $10 billion on influencers. It truly is the fastest growing marketing channel since digital arose in the early 2000s.
The channel is quite mature, although still fragmented, and influencer rates are becoming slightly more standardized (based on the data we keep at Mattr). It is compliant enough so that even prescription drug brands are beginning to feel comfortable with it.
But most importantly, it possesses that which, in this age of negative influence you cannot, authenticity.
Expand into new markets
Let’s face it: discretionary buying is going to take a hit over the next one to two years. And when you have saturated your prime segments, it’s time to move into more to lay the foundation for the future. The data is certainly available – platforms such as ours can tell you what percentage of an influencer’s audience is 25-44, where they live, and what their adjacent interests are. Targeting younger audiences is just a matter of finding the right group of influencers who can be genuinely excited in your products. The even better news is that it is far more cost effective than using large, macro influencers who may have fewer of the audience segments you’re targeting than a niched semi-professional influencer.
The luxury watch and jewelry industries, especially the mid-market brands, are particularly susceptible to market downswings. Now unable to release their products at a large show filled with journalists and buyers, the time may be here to shake off the 20th century cobwebs and market more authentically, and to a larger audience.
Lower your risk, improve your results, and save budget with Mattr’s influencer advisory service. A world top 50 marketing company since 2011.
It’s time for another Interview With an Influencer. We love getting insights from many of the influencers we work with by asking them the questions brands want to know. And also asking them what they want to know most about brands. Our jobs at Mattr are to be that liaison between the influencers and the brands and that doesn’t just mean during the campaigns. We also want to be able to go to our clients and to our influencer community and help them better connect with one another for successful campaigns.
This month we were able to chat with one of our favorite foodie influencers who we’ve been lucky enough to work with in the past. Philly-based, Sarah Schutz runs the very popular TheCuttingVeg, and has a huge growing audience of nearly 140k followers. We wanted insight from her on growing into a bigger influencer and how she is dealing with all of the recent Instagram changes.
Mattr: Do you find it easier to get sponsorships as a larger influencer? Or easier when you had a smaller, more mid-level audience (since so many brands are moving towards micro)?
Sarah: I have a mixed answer on this. On the one hand, micro influencers are definitely making a name for themselves in the social media spaces. When I just started out in 2016, there was no concept of influencer marketing for smaller accounts. I personally did not have partnerships with brands until I reached 35,000 followers. I do see the value in having micro-influencers as part of a marketing strategy and feel the effects of more brands moving this way. However, I also find brands appreciate influencers like myself who have existed in the space for a long time. Many of my followers have been with me since the beginning and, as a result, know me and trust my opinions about certain brands. This is especially true because I entered and grew on IG before the advent of influencer marketing. I would promote products on my site not because a brand was paying for me, but because I was genuinely excited about the product. Especially for micro-influencers, there are different expectations of compensation now versus in 2016. Therefore, I find brands appreciate the levels of trust larger influencers have built with their audiences over the years.
Mattr: Have you noticed any positive or negative changes since Instagram has rolled out testing the hiding of likes?
Sarah: Personally, I think hiding likes is a great step forward for society at large as well as content creators. While my likes have not gone away personally, I find myself less anxious about producing content that will get likes versus producing content that is true to my brand. My followers are a lot happier as well, as I am not focusing on creating content for an algorithm. However, it can be frustrating to see likes decrease sometimes, especially if a brand is hyper focused on post statistics. However, a lot of those quantifying measures can and are bought by fellow influencers. Therefore, I hope hiding likes forces brands to focus on how engaged an influencers’ audience is versus how many likes a post receives.
Mattr:Have you seen a change in your engagement with new algorithm changes on Instagram?
Sarah: I have seen both a decrease in likes as well as an increase in comments and story views. I think what is most important for brands is not just focusing on likes per post when determining if an influencer is a good fit. People want to see a genuine person behind the lens and, thus, will develop stronger ties with a person and, thus, their recommendations for products. I think the algorithm change forces influencers to show off their unique personalities versus just posting pretty photos. I think this will be beneficial in the long run for brands, creators, and their followers.
Mattr: What platform, besides Instagram, do you think will be big in influencer marketing for 2020?
Sarah: Youtube and Pinterest are 100% the best places besides Instagram for content creation and influencer marketing. Both platforms are internet based and not primarily through an app. This makes their staying power much more certain than other platforms. I have also explored Tik Tok as a potential. However, since most of Tik Tok’s users are 18-24 and from China, it is uncertain how advertising on Tik Tok might be beneficial to brands.
Mattr: Do you have any big goals as an influencer for the 2020 year?
Sarah: Like every year, I want to connect with my followers more in person. I have a couple of brand sponsored meetups planned in 2020 but want to do more throughout the year. Honestly, the best part of being someone on social media is having the opportunity to connect with my followers outside of the apps.
I also would love to do more travel-focused collaborations this year. My followers love when I take them along to different places that I travel to, along with when I share guides about what I am doing and, more specifically, where I am eating. Travel is actually where I get most of my food inspiration from! One of my goats is to navigate that space and figure out how to pitch brands from that community.
Mattr:How could brands or agencies make your work easier?
Sarah: Brands could make my work easier and my content better suited for them by being incredibly upfront about all expectations. Too often, brands will realize mid campaign that the content I created for them based on the creative is not exactly what they wanted. As a result, we run into time delays and I am requested to reshoot content. This creates unnecessary stress for both influencers and agencies that could be better addressed by clear, solidified expectations about campaigns.
Also, if a brand wants a photo to have a certain “look” please allow the influencer to do the editing themselves with your requests. Sometimes, a brand will edit a photo or place a filter on it so it will not fit in well to the person’s feed. As a result, it does not look natural to the influencer’s followers. Giving the person behind the camera a bit more agency over their content for a brand collaboration will probably mean better engagement and return for brands in the long run. Remember, a blogger will probably know how to best tailor the content to fit in with their feed and, therefore, win the trust of their followers.
Mattr: Finally, what is something you want to know from brands? Any burning questions that you have for brands and agencies getting into influencer marketing?
Sarah: Something I want to know is the thought process brands go through to choose influencers to promote products. I know not all influencers are good fits for certain campaigns vs others. However, I am sometimes confused about how a brand settled on particular content creators whose personality and mission do not align. Do brands look at an influencer’s stories or comments to see the connections they make? Do they see how they are engaged on other platforms? Deciding on a particular content creator, in my opinion, is more than counting statistics.
We’ve said this before but can now, with data: influencer marketing is here to stay. According to recent research, budgets for influencer marketing will grow by over 30% in the next 5 years. And most of that budget will come at the expense of television and digital.
As influencer marketing matures, so should your strategy. Influencer Marketing is markedly different from digital or social because it’s so human and utterly reliant on the whims and business plans of the big social platforms.
So time to get smart and learn how to maximize your budget.
Do the Math: Qualified Engagement
Tech has come a long way for IM but slammed into a brick wall with programmatic offerings. Brand teams just aren’t going to relinquish content control to programmatic platforms, no matter how good the automatic safeguards.
Instead, tech has given us insight into the influencer audience, which offers our most meaningful area for cost savings.
Let’s take a high level look at an example. A brand is trying to reach 18 – 24 year old females. Which should you go for? A macro with over a million followers or a mid-level influencer with 33,000 followers?
Yes, we’re focused on engagement and not impressions because that’s where the market is going. While we’re at it, ensure you’re paying by the engagement, too, so you further maximize your budget.
This smart tactic really shines on campaigns with conversion tracking, for coupon downloads, for example. We have seen engagement/conversion rates of over 5% for our campaigns with audience targeting.
There are other ways to save money, but this time it’s on you, the client.
Reduce the Biggest Cost of Influencer Campaigns
The most expensive aspect of influencer marketing is not their fees, or technology. It’s the resource time needed to find influencers. And yes, platforms help but won’t get you all the way there, especially if the campaign is tightly targeted.
Modify influencer constraints like prior competitive posts, gender, parents, etc. Remember that you have access to influencer audiences; you should therefore be looking at that data for geography and brand affiliation, both of which are available in detail. Finding a group of highly specialized influencers whose audience is located primarily in Utah is considerably faster than finding very specific and rare influencers based in Utah.
Going this strategy can mean a resource savings of several person-days to find influencers. Pricing will reflect your requirements so you’re bound to save considerable budget.
Adding it All Up
When you focus on Qualified Engagement and ease up on your influencer requirements, leveraging audience data, you could be saving 10-25% on your budget. And even more if you insist on cost per engagement pricing.
Seems like only yesterday we were predicting trends for the 2019 year. From micro-influencers to IGTV, to all the Instagram changes, a lot happened this year in the world of influencer marketing. It’s hard to believe 2020 is soon approaching, but not hard to believe that influencer marketing has no plans of slowing down. We want you to be fully prepared for the new year when it comes to your influencer campaigns. In such a quick moving industry, it can be easy to fall behind or get lost in the clutter. The New Year is the perfect time to revamp your marketing strategies, get creative, and test new ideas. Here are some ways to do that:
Go Long Term With Your Influencers
You’ve heard it time and time again, but it’s time to go long term with your influencers. It’s a strategy that benefits you and your influencers. Audiences have shown to engage more with sponsored posts when they find it to be authentic to the influencer, when an influencer promotes products several times throughout the year their audience trusts that it is something they truly love and believe in. On top of that, it can be harder than you think to find influencers who are easy and fun to work with and that create engaging and high quality content. So when you find them you should really take advantage of the opportunity.
Try an Always On Approach
It can be difficult to start and restart new influencer campaigns. Especially because things are always changing and sometimes brands need campaigns to start quickly whether it’s for a new coupon or promotion going on. It can be beneficial to work with an agency on an on-demand basis. With this strategy, you can activate a campaign in a matter of days. An agency or a provider, like Mattr takes care of the heavy lifting and can have your creative brief and influencers ready to go at a moments notice. Your campaign can be live far more quickly than you were expecting.
Try Something Other Than Instagram
We’ve discussed this before, but Instagram and influencers are not synonymous with one another. This can be the time to start something else for your brand. YouTube, Pinterest, or even Twitter can all be great social media platforms to try out. TikTok is a fast growing platform for influencers, especially GenZ. If you’re looking to get even more creative, you can try having influencers at live events or hosting house parties for your brand. Influencers just mean a person with impact and influence, they don’t need to be on social to share your brand with the world.
Try Stories Only
Especially with the new algorithm and Instagram threatening to take away likes, in-feed posts and can hard to determine and predict when it comes to engagement. Stories are becoming a more reliable way to get your brand in front of audiences. Some influencers with only a few thousand followers can still get around 25%-50% of their audiences viewing their stories. Stories are also great when it comes to conversions, since it is easier to simply swipe up rather than read a static post caption, click the user’s profile, then click the link in bio. We are at a great time right now where story views and engagement are on the rise, but because of their simplicity can be half the cost.
Try Different Sized Influencers
Micro-influencers may be all the talk right now, but there are benefits to all sized influencers depending on your brand and the goal of your campaign. Use macro for more awareness or to jumpstart a campaign, micro for more hyperlocal based campaigns, mid level can be great for awareness and for strong engagement. The more global you want to be, the more macro you should go. If your audience is a huge range, why not leverage a big influencer with a strongly connected audience? However, if your brand is niche or your target is specific to certain locations, there is nothing more powerful than a micro-influencer.
Influencer marketing is a great industry to experiment in and sometimes you never know what exactly is going to work for your brand; which influencers connect the best, and what type of posts reach your audience. The new year is the perfect time to test out some new ideas for your campaigns to set up for a successful 2020.
About MATTR: MATTR, leaders in influencer campaigns for highly regulated industries, is the only full-service influencer marketing provider with detailed audience insights from PersonaMesh™. We go beyond demographics into psychographics such as values and interests so that your influencer campaigns align with your campaign targets.