Circa 2017, the once proud luxury watch industry is in its weakest position since the late 1970s and early 1980s. At that time, the prevalence of inexpensive quartz movement-powered watches produced in Asia versus Europe almost completely decimated the mechanical watch industry. Cost and better technologies prompted an event called the "quartz crisis" which assaulted an industry that specialized in the production of spring-powered versus battery-powered timepieces. In short, better, cheaper watches unsurprisingly outsold less accurate and more expensive products to a mainstream market.
Some compelling evidence of strong consumer interest and demand for timepieces can be seen in the relatively high performance of online watch retail. The ironic reality is that despite the fact that watch companies are notorious for strict control of their brands, the kings of watch sales today are unauthorized retailer transactions - mostly online. This is in contrast to the way that most watch brands prefer to sell their goods, via authorized watch retailers (i.e., transactions that mostly happen "offline").
The biggest problem in the area of satisfying consumer demand for watches is the "minefield" of online watch retail options available. Consumers are regularly confused about how or where to buy a watch, and at what price. The watch industry has created an extremely "dirty" marketplace where the same timepiece might be available at any given time online via a series of different retailers for vastly different prices. This causes severe erosion of consumer confidence, which leads to fewer sales, as well consumers who feel they need to be in a constant "holding pattern" prior to buying a watch they otherwise want - with the intent of waiting for the right price. Said in another way, consumers want watches, but the watch industry has made it confusing and uncomfortable to know what to buy, where, when, and at what price.
As I've tried to illustrate, the luxury watch industry will need to shrink its number of ineffective employees, shrink the number of factories and production employees it has, shrink the number of retailers and distributors it has, shrink its pricing margins, and shrink its reliance on outdated ways of approaching marketing and advertising - prior to being able to first plateau and eventually recover. The winners will be those brands that authentically take risk, get real about the failures of the outdated business practices, get to know their consumers better, and embrace the fact that the appeal of beautiful old-style items must be met with a modern approach to doing business.
The whole article can be found at: "https://www.forbes.com/sites/arieladams/2017/06/23/despite-consumer-demand-the-luxury-watch-industry-will-have-to-shrink-before-it-recovers/#7a50eb2f2c75"