Linde Werdelin’s Jorn Werdelin Paints A Grim Picture Of The Watch Industry In 2016
by Martin Green
In a world where marketing often gets the upper hand, an honest insight into the inner workings of the watch industry is a rare treat. Especially when provided by the co-founder of a brand and published in a world-renowned publication like The Financial Times (FT).
This is exactly what happened when Jorn Werdelin, co-founder of Linde Werdelin, was interviewed by the FT recently. In honest and straightforward words, he painted a picture of how he perceives the current state of the watch industry, and it’s a rather grim image with too many brands making too many watches for too few customers. The following highlighted quotes from the FT interview put the focus Werdelin’s concerns.
“In some ways, I think much of the industry has lost sight of the fact that we are making luxury goods, and that means things which should be desirable and at least relatively rare. But when I see the big groups pushing so hard to increase production, to make ever more models and to open mono-brand stores which squeeze traditional retailers, I start to become a little bit afraid.”
This honesty was not appreciated by every corner of the watch industry as Werdelin veered off the yellow brick road, revealing that the great and powerful Oz isn’t so great after all.
“Scarcity must remain the key — lose that, and I think the attraction [of a luxury watch] is gone.”
An independent watch brand often comes with an independent mind, and independent minds are hard to keep quiet. In my personal opinion, whether we like it or not I feel that Werdelin provided factual representation of the current state of the market.
“There has been an enormous amount of creativity during the past 10 or 15 years, but I can really see all that disappearing. If we face difficult times ahead, I expect the big groups will get bigger — and that makes me wonder whether or not we will see the beginning of the end of smaller, independent brands, which are often the really creative ones.”
However, I also had the impression that Werdelin’s Financial Times interview begged for a followup, so here it is!
Q&P: Recently you did an interview with The Financial Times, in which you talked about the current situation in the watch market. Some responses from the industry were not positive toward your airing of this. How do you feel about that?
JW: I feel good about it because I think it’s important to have a view. When doing the interview, I had customers in mind and I believe it’s only reasonable to share some transparency with them. I am a fairly upfront person and am thoughtful as to what’s going on in the watch market at the moment. We live in a digital age where the immediacy of information means it is impossible to fool the customers; they are smart, savvy, and well-informed. The fact that the industry is in trouble is not news.
Q&P: In the article you gave a more in-depth look into the watch industry and the way it functions, providing perhaps more information than is generally known to the public. Part of the watch industry leans on myths and marketing; what do you think is the effect of providing information that might take some of that magic away?
JW: Great myths or great stories will never really diminish in value. Their significance and influence will always overshadow any small truths exposed over time. Marketing plays its role in communicating stories to the public, but it should not be used to outright lie to or deceive the customer. Truth and authenticity are required.
Q&P: Do you notice that consumers are changing?
JW: Oh, yes. The consumer is getting younger, more knowledgeable, and is less concerned about actual ownership of luxury goods. Life moves at a faster pace and consumers are more centered on experiences. They have ease of access – for example, with vintage goods consumers can swap or sell their belongings as and when their interests change. With the accumulation of production, nothing is rare anymore. So I think this is a positive development. Mass consumerism is lowering and there is no longer the need to produce so much anymore.
Q&P: In the watch industry you have in general the large conglomerates and the smaller, independent players. How do you think both types of player will (need to) develop to cope with the new market conditions?
JW: Large conglomerates will cope because they are more powerful and have more control of the distribution channels. I think it will become increasingly hard for independent watchmakers to become “brands,” by which I mean established and respected. Traditional retail and wholesale have been squeezed, which has meant they are cutting independent brands and taking products to the grey market. For independents to survive, we should stay closer to the customer.
Q&P: Market conditions at this level are hard to influence as a whole, let alone as a niche player like Linde Werdelin, yet you still need to survive in this market. What is Linde Werdelin’s strategy to make this happen?
JW: Our aim is to innovate and instate new methods of communication with our customers. With the launch of LW Vintage, we looked to diverge from the traditional sales channels and incorporate our own based on current market trends. As with our Try It service and LW by Appointment, the end goal is to bridge the gap between ourselves and our customers.
So Werdelin does not think that market conditions are very good in the watch world; is that a bad thing? Conditions like this tend to spark ingenuity, new approaches, and further development of the product and the services around it. A great example is LW Vintage, which Werdelin already mentioned in the interview.
Here, Linde Werdelin facilitates the sale of a pre-owned Linde Werdelin timepiece by acting as the bridge between seller and buyer. Linde Werdelin verifies each watch sold and offers the new owner a 24-month guarantee as well as a new strap.
This might well be a side business different from the actual development and manufacturing of watches, but at the same time it can represent a vital service toward becoming actively involved in the pre-owned market of one’s own brand.
I am convinced that for many watch collectors and connoisseurs Werdelin was only stating the obvious.
However, those who criticized the initial interview in The Financial Times may only need a bit more time before they are ready for reality to set in. We can only hope that they don’t take too long, because as history has showed us many times before, waiting too long might end up in running out of time altogether.