So-called “affordable” luxury watch brands such as Coach and Michael Kors must manage a delicate balancing act. They target younger adults and are constantly expanding their ranges, but they must also offer prestige and quality.
These brands’ watches often share features, for example, rose gold-toned or oversized silver-coloured cases and tortoise-shell faces are regular details. In many ways, the look is similar to that of luxury Swiss watch brands, but these watches are cheaper, usually costing about $300.
As well as offering lower prices than their luxury rivals, mid-market brands target young consumers through social media. Michael Kors, for example, has a strong presence on Tumblr, the short-form social network. Michael Kors, chief executive, even writes his own tweets, distinguishing them from the brand’s main feed by signing off “xxMK”.
Michael Kors declined to comment on its strategy, but its marketing activity suggests it is targeting young affluent adults.
Last month, the brand, which launched its first watch collection in 2006, published an online style guide to watches for young women, in which consumers learn how to select the right watch for social occasions, ranging from going out for ice-cream to meeting a boyfriend’s parents.
Michael Kors was also the first brand to run an advert on Instagram. According to Totems, the Instagram marketing analytics platform, the brand gained nearly 34,000 followers in the 18 hours following publication of its sponsored image.
Coach, the US luxury leather goods and fashion brand, has also broadened its range to include watches in recent decades. The New York-based company began as a leather goods maker in 1941 and has expanded to include an extensive fashion and accessories range.
Greg Unis, global head of men’s merchandising and licensing at Coach, says: “We introduced our first watch collection in 1996 as a licensee of Movado Group. Since then, the business has grown substantially. Watches now represent between 1 and 2 per cent of sales in our Coach stores. We also have a substantial wholesale watch business in more than 2,000 points of distribution.”
Mr Unis says Coach sets out to give its watches a high-end feel at a reasonable price.
“The styles in the collection range from sport styles that capture current market trends, to modern luxury styles in round and tank styles. In the end, our watches blur the line between a functional timepiece and fashion jewellery.”
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Affordable luxury brands such as Michael Kors and Kate Spade can monetise brand equity by branching out into product categories such as watches, suggests Luca Solca, head of luxury goods at Exane BNP Paribas.
“These products are not sold on the back of the brand being a specialist or technically credible in that [category] — but on the back of the brand being very popular and cool,” he says.
Non-specialist brands such as these, he says, tend to take two distinct approaches to their watches. The likes of Chanel, Louis Vuitton and Hermès, for example, developed watches that were technically ambitious and distinctive, “typically associated with a rather ambitious price position.” Others have focused on design and “a more compellingly lower price point”.
Ultimately, he notes, today’s affordable brands are no different from those of the past. “Today, it is Michael Kors and Kate Spade; yesterday, it was Armani and Cavalli.”
Does the success of the affordable luxury brands in this category pose a threat to the Swiss watch brands?
Mr Solca thinks not. “I don’t expect these forays to be a threat to Swiss specialists—even at the lower end.”
He also notes that Swiss specialists have the advantage of leading on innovation, and have a stronger technical story to tell.
“Even Swatch, as the most compellingly low-priced brand in the Swatch Group, has come forward with System 51: a breakthrough innovative product, that no designer or leather brands would ever be in a position to offer,” he says.