Guido Terreni of Bulgari: Stealing market share to grow
The year 2015 has been quite a tough one on the luxury market in general and on luxury watches in particular, as per testimonials from industry executives.
The export levels of Swiss watches have dropped and numerous factors, such as currency fluctuations, geopolitical threats and economic downturns, are pressuring the industry.
In an interview with Aficionado, sister publication of Luxurymena, Guido Terreni, managing director for Bulgari Watches, spoke about the shifting distribution of the luxury buyers around the world, current trends in the market and what it takes to survive challenging times.
What are some of the top trends you have picked up on throughout 2015?
In the recent past, there has been a little bit more refinement in the styles – you don’t have the tacky, big, bulky and chunky watches that you had before.
[You don’t know] when creativity [strikes] the constructer. The constructer is somebody who works on a movement and is not always looking at the aesthetics of the design, but rather at the techniques.
So, I like complications that are immediately understandable even though they are complicated; they should have a touch of elegance, otherwise it would be too difficult.
Is the industry continuing to shift back towards more classical designs?
Yes, brands are pushing for certain standards in the industry by being a little bit more discreet. The Chinese probably are responsible for this because they don’t really like chronographs. So, this is like going back a little bit towards tradition. But, now that the Chinese are understanding what watchmaking is really about, their tastes are changing very quickly.
What about the consumers and the current trends?
It’s a roller coaster of trends in a market where ten years ago, there was a very consistent evolution of certain customers and nationalities. Now, you really have two regions where customers are growing very fast – one is China and the other is the Middle East, and the two are very different from each other.
Can you give us a breakdown of the current distribution of luxury buyers around the world?
The Americans are coming back. In this particular moment, there is a contraction with the Chinese, because there is a lot of pressure – using the watch as a symbol of anti-corruption, they are now paying more attention on international pricing. So, earlier you could have a spread of 30 price points between China and Europe, now it’s 15, so, there has been a push to limit the difference. There is also a push by authorities to make the Chinese buy luxury goods at home and that’s why the industry is quite affected.
The Russians are gone for evident reasons, but they are still influential, especially, at the higher end of the market. Overall, it is a world that is moving very fast in terms of usage.
What is your outlook for the near future?
In terms of brands, I see it as more concentrating, less fragmenting, so the lower, smaller or niche brands have a tougher time these days than they did five years ago.
The industry, as a whole, is no longer one where you have a tail wind and everybody is growing. For the past two to three years, we have entered a different world of stealing market share to grow.
This is a different mindset, because there is more competition; it’s tougher and the brands that are growing are doing so because other brands are not growing or are decreasing.
This means that you have to be more creative, be true to yourself, not dilute the essence of your creativity and hit the market with the best you have. So, when you have sales people in front of a customer, you have to be able to showcase the DNA of the brand, so it is also the way of working internally that has to improve.
First published on Aficionado, sister publication of Luxurymena.