Yearly Archives: 2015

Wearables Halo Effect

Recent research confirms that popularity of wrist- worn wearables provide a halo effect for traditional watches. Morgan Stanley announced the findings of its latest research survey that show positive news for the Swiss watch industry. The survey, the latest in the Firm’s AlphaWise Evidence Series, is taken across US consumers.

The number of respondents who already own a wearable are significantly more likely to purchase/wear a traditional watch.

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When looking at the purchasing/wearing intent of traditional watches by respondents who do not currently own a wearable device: 20% of respondents who fall in that category are significantly more likely to purchase/wear traditional watches, further supporting that the popularity of wrist-worn wearables adds to general interest in the watch category.

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Caveat is that the survey is taken only across US consumers, a relatively small market (~10%) of total Swiss watch exports. Key will be to monitor coming months, to learn appetite for wearables and purchase behaviour towards the category from the larger markets (Europe, Asia).

Credit: Morgan Stanley AphaWise

Haute de Gamme

Swiss watches can be categorized in three families: LUXE for watches priced over CHF 8000, HAUTE DE GAMME for watches priced CHF 1500-8000, and ENTRY LEVEL for watches below CHF 1500. Typically brands have most of their models in one segment, for Frederique Constant is that the Haute de Gamme segment. In an article by the prestigious newspaper Le Temps, Frederique Constant was ranked 5th place.

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Source Le Temps May 27, 2015

Frederique Constant’s continued growth can be attributed to its long term Accessible Luxury strategy. Frederique Constant offers beautiful watches at an accessible luxury price for younger people and watch enthusiasts who don’t necessarily have thousands of dollars to spend, as well as the more value-conscious customer in all kinds of categories today. The company held this positioning for 25 years and Frederique Constant watches have never deviated from it, so people know what the brand stands for. Unlike some other brands that have changed their strategy or tactics over the years, becoming less credible.

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Slimline Moonphase Manufacture FC-705S4S6 – Public Price CHF 3190

See here the overview for the Luxe segment:

Screen Shot 2015-05-29 at 09.37.22Source Le Temps May 27, 2015

Baselworld 2015

 

Thank you all for the great reactions on our Horological Smartwatches in Basel! We are very happy to see the very positive enthusiasm to the concept that we introduced end February in Geneva, Tokyo and San Francisco. frederique-constant-montre-connectee-cover_0 The Horological Smartwatch is a Beautiful Swiss timepiece with connected functionality. It has all the attributes of a beautiful Swiss watch, characterised by the fact that it is based around a dial rather than a screen. The watches connect to an app on Android or iOS phone, allowing to track activity, measure sleep cycles, and get reminders to be more active if sitting too long. Activity and sleep quality can be seen on a secondary analog dial on the watch face itself. The health benefits of being more active and getting better sleep are well understood. Activity monitoring and sleep tracking are the most successful wearable application of today, used by over 20 million people. We are now combining a beautiful Swiss watch with the advanced MotionX technology platform. MMT_Web_NewSlides2 Traditional watchmaking uses applied technology (five centuries of research in mechanics), the smartwatch uses embedded technology in the form of dynamic firmware that is in constant communication with the world. It is a long way from the mechanical calibre hermetically sealed inside its case, only to be opened every few years to add a bit of oil. We very quickly realised that we couldn’t do this on our own. So we set up the MMT joint venture with our partner Fullpower. MMT designs the circuits and manages the production of the modules in Switzerland. Fullpower developed the schematic, firmware, the apps and the cloud. MMT offers the technology platform also to other brands in the watch industry.

We have 2+ years battery life, an extremely important advantage compared to other smart watches. We always focus on improving battery life over time and we expect we will see further improvements. For comparison, most popular smartwatches run for less than 12 hours in continuous usage, and the longest lasting smartwatches run for at most a few days before needing to be recharged.

Modules for Swiss Horological Smartwatches have been developed, manufactured, and assembled in Switzerland. MMT is a Geneva based Swiss manufacturer. Modules are made to stringent quality and legal requirements. MMT Horological Smartwatch Modules already meet the new legal requirements for “Swissness” that will become active as of January 1st, 2017.

Google Methods

Most probably you have recently heard about the new book : ‘How Google Works’. Reviews are rather negative; readers’ expectations should be suitably low. The book however describes interesting themes, some I would like to write about in this post.

Intriguing is the strategy to motivate ‘Smart Creatives’: those intelligent, self-motivated employees who are responsible for coming-up with next technologies, methods, and products. They are those we call true A-Players at Frederique Constant, they are our fuel for growth. We need to hire and retain them. Salary and perks do not motivate them. They seek meaning in their work and approach their careers with a missionary zeal ‘to make a difference’.

Company Culture is essential to retain ‘Smart Creatives’ and ensure continuous fuel for growth. At Frederique Constant our mission is ‘To let more people enjoy luxury’, it is a purpose beyond individual members of our company. It is a purpose that we expect will outlive us. We think of our mission daily.

smart-creatives

‘Smart Creatives’ are obviously motivated by Creation, an incredibly important aspect of our innovation strategy. We trust our engineers and watchmakers, we say yes to them as much as possible. We stay flexible in communication and approach. ‘Smart Creatives’ power derives from merit and in-sight, not tenure or salary. We have thirty something watch geniuses assembling Perpetual Calendars with ultra complex patented mechanisms. At other watch manufacturers, only very senior (and old) watchmakers would be allowed to touch such complicated mechanisms. Being involved in creation and manufacturing of high-end luxury watch mechanisms motivates all watchmakers at Frederique Constant.

Another Google strategy that resonates is their approach to product launches: Launch quickly, iterate and don’t be afraid to fail. This is not necessarily the strategy of most Swiss watch manufacturers… At Frederique Constant however, we have never been afraid to jump-in. In 2001, we started to develop our first mechanical caliber with the Watchmaker Schools in Amsterdam and Geneva. Later we added students from the Ingenieurs School in Geneva. Developing and manufacturing our first mechanical caliber was a three year very intense effort with many ups-and-downs. We were driven to create a ‘perfect’ Heart Beat and introduced the first, most simple version in 2004. Ten years later we are an independent Manufacture that created 15 calibers, representing over 25% of our annual turnover. If we would not have started with what looked like an impossible project in 2001, we would never have reached where we are today. Innovation is at our core and a key motivator for ‘Smart Creatives’.

Lastly, Google’s hiring practices are of interest. Hiring processes are extremely important at any company. Companies should pursue versatile ‘Learning persons’ whose private passions suggest dedication and personal pride. Decisions on hiring and promotions should be peer-based, reached by committees of employees instead of individual hiring managers. Keep interviews to the point and revealing.

Results 2014

Manufacture

Frederique Constant Classics Manufacture

We are very happy to report that we have closed the year with 16% sales growth compared to 2013. This is an enormous performance considering that the watch industry exports only grew approximately 2% in 2014. We are very proud on this result! All teams in the company, our distributors, and our retail partners have been working very hard to realize maximum sales in an often-difficult environment. Thank you very much for this hard work!

Not only has the result been good in 2014, very important is also that we have made structural changes last year in our management approach. Aletta and myself have stepped back somewhat from day-to-day operations and this work has been picked-up increasingly by our Management Team. With hard work, help of coaches, planning meetings, and various IT systems, our overall accountability culture has improved significantly. This is very important as it creates a solid base for the future. We thank all at the company for this new way of working.

With more time available, Aletta and myself have been able to focus more on external relations, collection creation, and strategy. Never before have we had our new collection so well developed at this stage, more sophisticated, all details fine-tuned to a new level. Our merchandising strategy is showing increasing strong results.

All this gives us strong confidence for 2015. As always, we have great ambitions and we are sure that we will have another year of excitement and strong growth.

With our target to grow production and sales from 135K to 150K in 2015, we will let more people enjoy luxury. This core purpose is our reason of being and the driver to live our passion.

Thank you for your interest in Frederique Constant, thank you for your support. We wish you an excellent start of the year and are looking forward continuing our journey with you. Together we are strong and together we will be living our passion!