As the most prestigious watch brand loses to a more modern competitor Audemars Piguet
New Watches & Wonders 2022 Patek Philippe Annual Calendar Travel Time Ref. 5326G
Friends! If you ask watch collectors to name the largest Swiss brands, most of them will first name Rolex and Patek Philippe, and then, most likely, Omega, Cartier and Audemars Piguet. This is a kind of unofficial rating of commercial success and prestige. At the same time, few people will believe that in the official ranking of Morgan Stanley, the most prestigious Patek Philippe paradox occupies only the 5th place, losing ground to the aforementioned Audemars Piguet.
For a very long time, no one questioned the superiority of Patek Philippe in the watch industry – watches of this brand are like a bar of gold on the wrist. But morgan Stanley’s annual report, published in March, explicitly indicates that Patek Philippe’s golden halo is flickering intermittently.
At first glance, the picture looks rosy. In 2021, the company’s revenue increased by approximately CHF 470 million, which is 32% more than the industry average. The high position of the brand on the watch Olympus is confirmed by the fact that for some Patek Philippe models waiting lists are formed as much as 12 years ahead. But behind these figures are calculations, according to which the company’s market share for the same period fell from 5.8% to 4.8%. Having dropped from 4th to 6th place in the ranking over the year, Patek Philippe is inferior in revenue to Longines and, more importantly, to its main competitor Audemars Piguet.
Interior of the Audemars Piguet Museum
The similarities between the two brands are obvious. Both are family companies, both produce high-quality watches in relatively small volumes, both have a bright background in the 1970s, when their legendary sports flagships in steel cases were born.
However, at these points the similarities end. Patek Philippe paradox has a well-equipped new manufactory in Plan-les-Ouattes, but in the eyes of the consumer remains the same as it was 10 and even 20 years ago. It may sound a bit exaggerated, but in fact, nothing has changed during this time.
Manufacture Patek Philippe
Now let’s take a look at Audemars Piguet. If Patek is committed to the old Swiss traditions, then Audemars Piguet has long relied on modern culture, turning it into its muse. Over the past 2 decades, the company has produced watches together with Arnold Schwarzenegger, LeBron James and Michael Schumacher, and also focused on modern music, art, golf and even, oh horror, the Marvel universe. And apparently, this approach works.
Audemars Piguet Royal Oak Concept Black Panther Flying Tourbillon
Going back to Morgan Stanley’s ratings, the last 4 reports show that Audemars Piguet’s revenue has grown by 50% since 2018, while Patek Philippe’s is up just 13%. Only the news headlines of recent years are more eloquent than the figures, which state that in their niche, competitors for the title of the largest family watch brand in Switzerland have switched places.
In defense of Patek Philippe, I will say that this problem (whether this situation is a problem is a big question) is not unique to “pathetics”. Let’s take for comparison another pair – part of the Swatch Group Breguet and belonging to the Portfolio richemont Vacheron Constantin.
According to Morgan Stanley, Breguet’s sales grew by 15% last year. As good as that number sounds, it’s less than half the industry average. In other words, the brand is moving backwards. Since 2018, the brand’s revenue has decreased by 40%. To give you an idea of what we’re talking about, in the top 50 watch companies, only 4 brands performed worse. Vacheron Constantin’s revenues for the same period, by contrast, grew by 26 percent, thanks in large part to a 72 percent surge over the past year. Vacheron Constantin’s market share grew last year, while Breguet’s, on the contrary, fell.
Why? Again, the difference is in the approaches to self-presentation. Vacheron Constantin, while doing the same thing as before, does something new from time to time. Attracts the Louvre to cooperation, organizes joint campaigns with Abbey Road studio and National Geographic photographer Corey Richards. Breguet continues to exhibit tourbillons and still tries to ride on a hackneyed narrative about the queen of Naples.
Watches from the collection of Breguet Reine de Naples
The production of luxury watches has not changed and will not change. Nor will the consumers of this product change, they still want what they can’t have. The mechanics of the process that excites this desire in them has changed.
“Desirability,” as marketers call it, can’t be caused by the product itself alone. Design, innovation, experience – all this is important, but it is important to focus on the future, to see the situation in perspective. If the Patek Philippe paradox website presents a list of new watches and rare handmade models, then Audemars Piguet on its page tells about the Grammy winner and stamper of percussion hits Mark Ronson or, say, about the sculpture that the company ordered to the artist Meriy Bennani. Can you see the difference?
And yet it’s not so clear-cut. Remember last year’s hype on the new Nautilus 5711 with a Tiffany dial? Among the first celebrities seen in this watch was rapper Jay-Z.
Jay-Z in Patek Philippe Nautilus 5711 with Tiffany dial
In addition to him, patek Philippe’s customer base includes Drake, Cardi B and Conor McGregor. Plus, at the recent Watches & Wonders exhibition, the company introduced a couple of new Calatrava models aimed at the younger generation. Does this mean that Patek Philippe paradox has realised the need to change its marketing strategies? We’ll have to wait and see.