Watches of Switzerland CEO, Brian Duffy CA, shares how he kept business ticking through lockdown
Watches of Switzerland kept things moving during the pandemic. CEO Brian Duffy CA explains how an expanding market, married to quick thinking and canny CRM, have helped to make recent years a time of rapid growth for the luxury retailer
The luxury watch industry is one of the oldest in modern history. Like most businesses, the sector was not immune to the effects of the pandemic, but, thanks to some smart leadership, Watches of Switzerland Group was able to match – and even surpass – previous levels of success.
Brian Duffy CA, CEO of the British multi-brand retailer, is credited with leading the group’s pandemic recovery. One of the industry’s leading figureheads, the ICAS-trained leader has significant retail and international experience, and combines his training and financial acumen with a great understanding of the global luxury watch and jewellery sector.
And that market is certainly there for the taking. The company’s share price soared during the pandemic, pushing its market cap within sight of £2bn, around five times higher than in 2014, when Duffy was appointed CEO. “We’ve obviously grown hugely during that time and we’ve outperformed the market,” he told a packed room of luxury sector business leaders at the Walpole British Luxury Summit, held in central London in May. So what is behind the company’s robust results and successful growth?
According to Duffy, while luxury can be viewed as frivolous, when it comes to watches “you’re also buying products that can last forever, like family heirlooms. And these are products that maintain their value – certainly better than a handbag.” In short, watches are for a lifetime not a season – which puts the sector a step above other luxury industries such as fashion and cars. Citing the example of the famous advertisement for a Patek Philippe timepiece, he says: “You never actually own a Patek, you’re looking after it for the next generation.”
The key, he says, is “rational indulgence”. The list of reasons to invest in fine watches is long. “Everybody yearns for a beautiful watch or a beautiful piece of jewellery,” he says, adding that they’re a surefire conversation starter in both social and business settings. “I find, from experience, that everybody has an interest in, or curiosity about, watches. So that’s been our strategy and our conviction – that we should kind of reach out and stimulate that latent desire.”
Inclusivity sits at the heart of the retail experience, he insists: “We are non-judgemental about it – it’s very much an aspirational category. I think one of the mistakes that traditional retailers make is focusing on the high-end elite or tourism – both of which are important, but not to the exclusion of the broader market.”
During the pandemic, travel restrictions removed a key demographic for the luxury market – international visitors. As a consequence, Watches of Switzerland successfully pivoted its business to the domestic sector by using its customer relationship management (CRM) systems and analysing its database to better target customers.
“We thought, since everybody wants a watch, let’s stimulate them to let them know about new products that are around,” explains Duffy. “We had remote events, we empowered all our salespeople to present remotely. We gave them all licences on Zoom and taught them how to effectively engage clients.”
This ranged from setting up shots where the watch was shown correctly and properly lit to lessons in how to present virtually. Looking to the US, the firm opened in Hudson Yards, in the West of Manhattan, in March 2019. Despite having to close its doors when the pandemic hit in April 2020, by the summer, sales figures were up 25% year on year.
Duffy credits much of this success to the company’s CRM system. “People were quickly engaging in CRM, contacting clients, doing remote presentations and delivering… while we gave them all the systems and support they needed, the fundamental that drove it all was the energy and enthusiasm of the salespeople themselves.”
Though the pandemic was a concern for the bottom line, after looking at projections the management team knew they’d be okay from a liquidity standpoint. Their next priority was looking after people and giving them the assurance they were going to stay fully employed and fully paid. The team were also kept entertained with a “virtual pub”, online gigs and digital games. “It was really quite inspiring,” says Duffy.
“From a business point of view, the strength of our social media presence was hugely advantageous,” he adds. “We have a great online business that we got behind.” While some e-commerce businesses closed down due to social distancing concerns, Watches of Switzerland was in an advantageous position, with small products making packing and distribution more manageable. “At the end of it, we more than doubled our online business,” he says.
As a multi-brand retailer, Watches of Switzerland is valued by its consumers for its independence: their clients often come to them for trusted, impartial advice. During the pandemic, the business also thought on its feet to expand its offerings, including opening a virtual boutique run by Heathrow airport teams who were unable to work in store.
“We brought them into London and fully equipped them with headphones and computers and they became our virtual boutique,” Duffy says. “The conversion-to-sales ratio was 60 times [that of other ecommerce traffic]. We brought 20 [of the Heathrow staff] initially and now we are heading towards 50 – and that’s now a permanent part of what we do.”
Appointments are another new and permanent offering – Duffy reveals that Watches of Switzerland now conducts 40% of its business via appointments.
While the UK has the best luxury watch market in the world, Duffy says that there has been “a significant increase of interest in watches” in the US. Online media platforms covering watches and jewellery report that people are spending a lot more time researching and learning about different brands.
Another big change is that while watches have been traditionally regarded as a men’s market, there are now many more women buying mechanical watches. Similarly, while it’s often assumed that young people do not buy watches of any kind, preferring to rely on their phones, the data (which Duffy loves, and checks daily) suggests otherwise – the age of buyers is getting younger. “There’s a very vibrant, young audience,” he says, “particularly in the US. Young guys are the real experts, they have a real interest. Two weeks ago, we did an exclusive product with a $4.5k (£3,700) price point – we sold 100 of them in 24 hours. The appetite for quality watches definitely climbs in line with people’s knowledge of them.”