Domestic Watch and Clock Market Sustained Growth for 3 Consecutive Years
Yano Research Institute (the President, Takashi Mizukoshi) conducted a survey on the domestic watch and clock market and found out the trend by product segment, the noteworthy market trends, and the future perspectives. This press release reports the analysis results of domestic watch (wrist watch) market.
According to the data from the Japan Clock & Watch Association, size of the domestic watch market for 2019 was 886,700 million yen, 108.0% of the size of the previous year, based on the retail price.
Driven by the two big demands, demands by Japanese wealthy population and inbound tourists, the market for 2019 saw strong sales. However, the brands polarized as many companies were affected by dampened consumer spending caused by uncertainties over economy due to the consumption tax hike. Divide in the market was also seen at channels: While department stores enjoyed good sales brought about by high-end brands, specialty stores without top brands struggled.
Sales was strong especially at airport terminal stores and online stores (e-commerce). In particular, airports that markedly became a shopping facility in recent years showed steady growth, as they reinforced opening of stores targeted not only to inbound tourists but also to Japanese, which includes brands for travel bags, suitcases, stationaries, and casual wear.
Brands that Wins at Marketing to Millennials and Digital Communication Increase Market Presence
While their purchasing power is not as strong as the wealthy population, the millennials* are the key customers for the watch market. As the watch brand that wins brand loyalty over the millennials becomes a trend of the season, ripple effect can be expected; popularity of the brands that have managed to become highly sought after by the millennials spreads to primary customer segment that has more purchasing power. The millennial marketing strategy is a rejuvenating strategy of customer segments, as it can be said that unless the brands are accepted by the young generations, it has no future. Therefore, it is important that the watch brands enhance their market presence by promoting brand collaborations and reinforcing digital communications to appeal to the millennials continually.
*Although there are several definitions for the millennials, in this research it indicates a generation born between 1980s to late 1990s that have gone into the workforce around 2000, the young people at the age of mid 20s to late 30s as of 2020.
In 2020, the domestic watch market faced predicaments, as they lost inbound tourism demand, which was stable till then, due to the influence of COVID-19. While uncertainty remains, there are companies moving on to promote new attempts, for instance, shifting to digital marketing and reinforcing communication among their fans through SNS or member groups.
A key to success hereafter will be how well the brands can provide customer value that is competitive with physical stores or the value that cannot be offered at physical stores, such as online events, online customer services, and improved e-commerce experience. It is assumed that companies that engage with customers directly and frequently though one-to-one communication will garner more attention. Moreover, as inbound tourist demand cannot be expected, reinforcement of overseas business will be urgent for domestic makers.
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