Jean-Claude Biver, CEO of the luxury watchmaker Tag Heuer, announced last week that the company will be increasing its production of the Carrera Connected Smartwatch from 1,200 to 2,000 pieces per week. According to Bloomberg, Tag Heuer recently received over 100,000 orders for the Connected Watch – all from dealers and retailers.
The Carrera Connected costs $1,500, with a titanium case and Android Wear. Purchasers have the option to upgrade their order to a mechanical watch – limited edition – for an additional $1,500.
Biver also indicated he is attempting to shift sales away from the Internet to actual brick and mortar stores in order to appeal to the best market for the watch – those who still like to buy their watches from retailers.
Under his leadership, Biver positions Tag Heuer as the first luxury watchmaker entering the smartwatch market with a “big bang.”
The watch world is currently in an interesting position. In the past, watch sales traditionally occurred at retail stores around the world. Moreover, watch manufacturers – at least the fancy ones – were very selective with retailers and only chose a limited number of stores to sell their watches. It was a sign of exclusivity.
However, as with everything else, the Internet changed things. Watch manufacturers lost control over the sales protocols of their watches. Retailers, who purchased the watches from manufacturers at lower prices, then sold the watches to their customers at prices lower than the manufacturer suggested retail price (MSRP).
Now, watch manufacturers realize that brick and mortar stores still sell merchandise, even if the real money is made via the Internet. While selling watches at retail stores is extremely expensive, it is now clear that the demand for the Carrera Connected – at least for wealthy watch enthusiasts – is focused on retail stores.
So, why is this so? Two reasons: in this case, price is no object – and customers are trying the Carrera Connected to feel fancy while trying the newest technology; and Tag Heuer customers are dedicated loyalists who will buy anything the company puts out.
This is all good news for the luxury watchmaker.