Dubai: Nothing suggests that you have made it in life better than a Rolex on the wrist… or any luxury Swiss watch of your choice.
For three generations of UAE’s citizens and residents, a trip to the Ahmed Seddiqi and Sons store was as much a part of that transition as actually trying on the Rolex of one’s choice for the first time. And with it the thought that one has earned the right to do so.
Even in a year when the whole world was fixated on a virus, there were enough citizens and residents making that entry into an Ahmed Seddiqi store. Clearly, some experiences can withstand even a pandemic.
“Most of the buying that took place in 2020 was led by UAE nationals and expatriates,” said Mohammed Abdulmagied Seddiqi, Chief Commercial Officer of Seddiqi Holding. “Our local clientele continued to purchase locally, which contributed substantially. We saw this as an opportunity to be agile and building our long-term relationships with them. We created a luxury home delivery service for clients and focused on enhancing their experience with us.”
But the market still missed those jetsetters, who wouldn’t think twice of adding to their collection of pricey Swiss watch labels. The sort who will not limit themselves to window shopping, whether in the city or at the airport duty free shop.
But as soon as international travel got cut down, luxury brands everywhere had to focus exclusively on domestic shoppers to see through a year that turned out to be even more difficult than what they went through in 2009, after the Global Financial Crisis cut into demand. Back then, there were markets that still pulled their weight, such as China and its army of luxury craving shoppers.
But in 2020, the hit on buying at the top end of the market was near total in the first-half of the year. Swiss watch exports dropped to 17 billion Swiss francs in 2020, compared to 21.7 billion Swiss francs a year prior to that. Between April to June, the decline was 61.6 per cent, according to industry stats, and for the rest of the year, brands were trying to make up for that horrendous second quarter.
Win and lose
“We saw a major spike in demand for certain brands - Rolex, Patek Philippe, Audemars Piguet, Richard Mille, and a number of independent brands,” said Seddiqi.
“Having said that, there were various brands that were unable to position themselves in a competitive market. Either they were not able to connect with their audience efficiently - or they tried to reach out to many segments of clients at once and continuously changed their strategy and branding approach.
“These brands experienced a steep decline… hence it was a tumultuous year for all.”
Cope with less
It wasn’t just demand caving in once travel restrictions got imposed. “Indeed, the economy in 2020 was stagnant with limited travel,” said Seddiqi. “Clients were being prudent and cautious due to the uncertainties of 2020.
“We also have to bear in mind Switzerland went into lockdown, which meant a decrease in the number of watches being produced. Fact is various brands had cut down production by 30-35 per cent, [and] all this certainly resulted in a dip in average transaction value.”
More change coming
But even without the pandemic, Swiss watchmakers were bringing about changes to the way they and their retail partners were operating. The belief that the industry was immune to change was itself going through a makeover. That craftsmanship and legacy – the sheer timeless appeal – alone were not enough to sustain brands through the various market cycles.
Did the need for change extend to pricing as well? “Both Swiss watchmakers and official retailers have always been mindful of pricing,” said Seddiqi. “They work towards ensuring that a client is not charged a premium on purchasing a watch from an official retailer, bearing in mind the CHF (Swiss franc) retail price as per the exchange rate and VAT implemented.
“However, there are also unofficial retailers and resellers who are selling at very high prices, and charging clients a premium on watches that are in high demand in the market. This is something that needs to be more regulated to ensure it does not continue to happen.”
Extend the channels
Ahmed Seddiqi and Sons represents over 60 luxury timepiece and jewellery brands at its network of 50 plus stores. Recently, it opened a mono-brand outlet for Tudor, a brand that’s been picking up some prominence in shopper wish-lists for some time now.
“Historically, visiting luxury boutiques has been the ideal choice for clients,” said Seddiqi. “Thanks to technology, clients are content with buying products directly from an online platform. However, I believe we are moving to a more 360-degree physical and online experience, where a client will see the product online, visit the boutique, try on the watch, and then chose to make the purchase at the boutique.
“Or go back home and purchase from the store’s online platform and have the watch delivered to their home. The future belongs to those who can seamlessly utilize both online and physical stores. Although, I do believe that a high-spending VIP client is more likely to want that physical in-store experience - of being attended to and explained the intricacies of the watch, thus elevating their overall experience vs. e-commerce.”
That sentiment obviously suggests that the retailer will be on the lookout for more physical store possibilities.
“We have been a brick-and-mortar luxury retailer for over 70 years now. Our plan is to continue to open luxury boutiques where we will engage with clients, providing the highest form of luxury and overall experience.
“With each new store we learn more about our clients, their changing preferences. And this allows us to adapt to market trends…”
In the rarefied world of luxury Swiss watch making and selling, some experiences do stand the test of time.