A new focus and growth area

Jan 18, 2012,12:51 PM
 

Hmmm,

Some interesting views so far, though mostly (naturally) from the enthusiast viewpoint. Given that the winner of the competition is to be chosen by chance rather than for quality, I will therefore take a slightly different tack. A bit of a ramble, I’m afraid, and I hope I don’t offend….

I can’t find out what the CEO of Piaget earns, but the highest paid director at Richemont last year was the CEO of Cartier and he made €7.2m, while the CEO Johann Rupert ‘only’ got €3.9m (albeit he part-owns the business). I’m therefore going to assume that Richemont pays well if you make the company money. Now as a collector with distinctly sub-€7.2m current earnings (!), the focus of my five years at Piaget will therefore be to deliver for Mr Rupert so that I can take home buckets of cash and accelerate my collection. Or position myself to take his job if he has retired by 2017 (he’ll be 67 when I’m finishing my stint). Or both, of course.

Delivery in my eyes means remaining consistent with the broader business strategy while delivering sustained profit growth as an autonomous maison.

The three things to be sensitive about here are:

  1. Different regions (and therefore types of customer) are experiencing different levels of growth. While the US is Richemont’s largest market, China is growing fastest (of course) and new Piaget boutiques in FY11 were in China, Singapore and the Middle East (plus London). Some may be unimpressed by the ‘year of the dragon’ bandwagon among luxury watchmakers, but I’m going to be riding that bandwagon hard and focusing on what buyers from “newer” markets want.

    • However, for the purposes of this question I’m going to ignore the thinking on what a collection needs to look like to appeal to Chinese buyers - just because I have no idea

  2. Boutique sales (as opposed to wholesale sales) are generally higher margin and are growing faster. I therefore want a watch collection that stands on its own in a Piaget boutique and is complementary and consistent with the brand

    • As I don’t have any particular comment about the comprehensiveness of the collection beyond what others have already said, I shall say no more about the specifics. But thematically, I want to ensure the link between jewellery and the broader image of Piaget and the watch collection. I’ll come back to this in a moment

  3. Lastly, I am running an autonomous maison, but Vacheron, Jaeger, Lange, IWC, Cartier, Roger Dubuis and Panerai are part of the same group (I'm ignoring B&M and Montblanc for these purposes); taking sales off one of them may benefit Piaget’s numbers but taking them off another company is better for Mr Rupert (and as we don't share R&D with our fellow maisons, I will be investing alongside them, too). A differentiated position within the group that does not overly cannibalise is therefore important. This leads me to some conclusions:

    • I don’t want to make big tool watches because Panerai already does that

    • Ditto for repeaters (VC), pilot watches (IWC) and uber-high-complications with finishing to die for (VC, Lange)

    • I think (personal view) that the Piaget Polo line is less compelling than the Vacheron Overseas for mainstream and RD for bling. However, I wouldn’t spend too much of my development budget on changing that relative position and therefore I intend to leave that sports part of the market alone

    • What I need is something that is ‘completely Piaget’ to build some new models/lines off

This, I think, is the nub of this question (how to market what we make is, though interesting, the subject of another contest!) What does it mean to be completely Piaget? I think anything we produced needs to express:


  • The appeal, look and standards of jewellery, whether it is jewellery or watches and, for the latter, whether the watch has stones on it or not

  • Slim, beautiful, understated elegance. Even where the maison does Bling, it is chic bling, if that is not oxymoronic. The female brand ambassadors reflect this

  • Femininity. This may be a controversial one (obviously not for jewellery), but I think even Piaget men’s watches are feminine – not a criticism, just a view!

  • Quality. The stones aren’t cheap, the manufacture calibres are refined, the design is excellent, the finish is high.

And these themes combine with my comment about brand positioning and the focus on boutiques to dictate my master-strategy for model-line extension for Piaget:


“Become the pre-eminent creator of beautiful, mechanical watches for women who want the best”


Now why is this an insight of genius that should enable me to out-earn Bernard Fornas (‘Mr Cartier’) over the next five years? I think there are lots of reasons but these four are key to me:

  • The demand for luxury goods from women is there.

    • Yes, China is a growing consumer of luxury goods, but almost all high-end mechanical watches are bought by men, and I'm sure there are more rich women in the world than there are rich men in China. There is plenty of demographic demand if we think they will buy

    • As any male purists knows, it’s not like women don’t like luxury consumer goods. Even using Richemont's own numbers, jewellery maisons represented 50% of FY11 sales and specialist wachmakers represented only 26%. More is spent today by women on jewellery than by men on watches and if you think they won't willingly spend on something else because they are already buying jewellery then you've not met my wife...

  • Quartz and high-end watches shouldn’t go together and women know this

    • Why would you buy a €50k watch with a €10 movement when you could have something beautiful beating beneath the face? Why should women be served quartz watches?

    • Women are not too stupid to understand or appreciate mechanical watches. In my experience, career women (and WAGs of purists?) in particular like mechanical watches, but they are not alone in this. They just get ignored by the industry

    • In short, the only hard, white stones in a high-end watch should be diamonds. Ditch the quartz…
  •  
  • Women are woefully served in the mechanical space today

    • When it comes to mechanical watches below about 33-34mmAP has the fabulous Jules Audemars Small Seconds and there are a couple of other brands (Patek comes to mind and Jaeger is okay if you want a reverso) who try, but most brands are just rubbish. This is why almost all career women either give up and buy quartz or go Rolex or Cartier…

  • Piaget has form here

    • Piaget has a few 34mm options in the Altiplano line already, though most of the others models (Limelight, Possession, Dancer) are regrettably quartz

    • We understand femininity and designing beautiful things for women. And those women trust us to do so

    • If you’re going to do a small movement for a small watch, it needs to be thin (a big issue for me on Roles). Piaget does thin – it’s in the DNA

    • We want to sell in boutiques because the margin is better. Our boutiques are already filled with rich women who like our jewellery and buy our brand. Why wouldn’t we want to sell them mechanical watches?
  •  
  • The rest of Richemont is pretty bad at this, too

    • Big women's mechanical watches do exist: some women want a Panerai or chunky RD and will buy one. We’re not going after them so we need not worry about this part of the market

    • IWC is man’s stuff, I think Lange has one nice (34mm) option in the form of the Little Saxonia and Vacheron has long-since focused on men to my mind

    • Cartier is closest, but has a different feel to the watches. Piaget could differentiate here. And anyway, we've established that the CEO of Cartier is doing something right...

    • As such, sales here are additive to Richemont overall


So I will give you a number of small, beautiful women’s watches. Some will be time-only and some will have complications, some will be skeletonised and some not, some will be jewel-encrusted and some plain metal. But all will be mechanical and all completely Piaget.

And then, in five years, I will start spending my cash...

Thanks,

simon

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Comments: view entire thread 

A game of chance! New Piaget contest courtesy of PuristSPro!

 
By: dxboon : January 12th, 2012-22:53
Hello fellow PuristS! In celebration of the upcoming SIHH where we will undoubtedly discover more delectable offerings from Piaget, your friendly neighborhood moderators have decided to stage another contest! The rules are simple -- in order to be eligibl... 

Simple and easy

 
By: nilomis : January 13th, 2012-04:08
I will maintain the current product line and, this is very important, will open a true sports/tool line, meaning: a) All sport/tool watches will carry two sizes (40 and 44mm) b) Stainless Steel cases, standard strap sizes and adapters (yes, the customer l... 

First of all

 
By: dsgalaxy1 : January 13th, 2012-04:57
I want the Piaget Upstream to get back to life, with a new opening system. we have ( i'm the boss but i'm nothing without my team) plenty of good calibers, so the altipiano's size is decreased to 40mm at maximum. The skeletonized black edition is in curre... 

then...

 
By: dsgalaxy1 : January 13th, 2012-05:44
we are a milestone in watchmaking history, so we have to focus more on extra-thin waches and i will introduce the altipiano: -chronograph -annual calendar -perpetual calendar Stop the big cases, sometimes the same reference available in only 2 different s... 

Don't laugh...

 
By: webtimer : January 13th, 2012-07:59
If I had the pleasure of being named Paget CEO, I would go back to one of the maison's greatest creations in my opinion, and create a new (and complicated) version of the coin watch. It probably sound weird, but as pocket watches are coming back, I think ... 

I wrote several time my dream...

 
By: foversta : January 13th, 2012-13:38
I would like to enjoy the beautiful chronograph movement in the context of a more "classic" case than the Polo one: Easy dream for my technical and design teams! Fx...  

Hmm...

 
By: crasian1030 : January 13th, 2012-20:52
As CEO, I would skeletonise all automatic watch rotors to a certain extent, use an exotic mineral for the moon phase dial on the Emperador line, and reduce the size and alter the case of the Emperador line so it's not as bulky and to make it more classic.

Easy ...

 
By: bimbeano : January 14th, 2012-15:41
I would concieve a special PuristPro Altiplano only available to Purists and for a very reasonable price ( 1000 euros). I would also create a complete new line of simple Altiplanos in several dimensions, materials, colors, dials , movements ... To me Piag... 

:)

 
By: VMM : January 16th, 2012-04:32
I would buy a pair of those non expensive Altiplanos. Vte

steel phoenix!

 
By: lien : January 14th, 2012-18:11
Dragons & a whole lot more in small round to boost awareness/desirability among public as the jewel sets rn't really meant for anyone cheers, Ed~

I would

 
By: Nicko16 : January 15th, 2012-04:38
give the chronograph a perpetual calendar module make it extra special. For Altiplano I would give a SS Skeletonised model. And I would peruse new means add ultra thin complications to the ultra thin models

I would try to expand the brand without losing sight of its core values

 
By: Brava : January 15th, 2012-09:22
The main USP of Piaget is their superthin manufacture calibres. I would try and build on that by developing some complications which would have to be the thinnest compared to their competition. A perpetual, with or without EOT, comes to mind but I would a... 

As CEO of Piaget

 
By: Bruce Banner : January 15th, 2012-11:25
I would do these things: 1. Number of Models Available Reduce the number of models available. There doesn't have to be 1000 variations for sale. Think more like Rolex or Lange and less like Tag. It will also reduce costs associated with manufacturing many... 

Well

 
By: Ares501 - Mr Green : January 16th, 2012-02:26
If - Then I'll go for Magnificent Seven 1. Every year a new movement - completely in-house to last jewel - ultra-thin of course 2. "Sound line" - Alarm, MR, GS, Striking watches 3. Line of Bespoke watches 4. Stop producing of "Sport Line" Watches 5. Marke... 

Keep it simple...

 
By: RJW : January 16th, 2012-14:15
Just more enamel dial altiplanos, including a non limited version/repeat of the 1957 re-edition in grand feu ... (credit to Daos for the photo) Regards, Richard....  

A new focus and growth area

 
By: Boccanegra : January 18th, 2012-12:51
Hmmm, Some interesting views so far, though mostly (naturally) from the enthusiast viewpoint. Given that the winner of the competition is to be chosen by chance rather than for quality, I will therefore take a slightly different tack. A bit of a ramble, I... 

I am not too familiar with the history of the brand

 
By: Tobi : January 18th, 2012-22:47
but I would dig deep in the history of the brand, try and identify the unique brand DNA and build on that. Ultra thin movements and jewelry comes to mind... T

A New Sheriff is in Town!

 
By: 1brian : January 19th, 2012-07:46
Letter to the EVP, Production: We have AD's that are completely SOLD OUT of product, and because my former job was managing a AD, to have a shopper come in, and not be able to see a single watch is terrible! We are going to make some watches for the next ...