IWC versus Rolex & Cartier: Brand Marketing

If you could just provide some background on IWC’s heritage and brand positioning when you joined?

When I joined, which was in 2002, IWC was a very niche luxury brand. That’s to say niche in terms of it’s positioning as a luxury watch brand in the Germany-speaking part of Switzerland, basically, the only one because all of the other well-known brands whether Rolex or even Breitling that sounds remotely German, but it’s not. They’re all in the Europe part of Switzerland, so in the very Francophone part of the country. All the way down to Lake Geneva. That already made the brand slightly different. Far more than that in terms of product, it was a brand that was very technical.

There was nothing about glamour, nothing about ostentatious luxury, it was all about the technology and watch-making and craftmanship, which in turn meant that the clients were very much people that were engineers, doctors, pilots, people caring about technology very much. Not people looking out for necessarily a status symbol, something of perfect quality, but very understated, down to earth, and very niche. The markets were the German-speaking countries and a little bit of Italy and that was more or less it. Even though the brand was distributed to a certain extent in Asia, it was never really done whole-heartedly. It was not a global brand, it was basically a Germanic, very niche technologically oriented luxury brand. Far away from the worldwide luxury global brand it is today.

Why was that the case?

IWC was always a company that never had the need to focus an to expand globally because the production was always sold anyway. It was most of the time a family owned business. It changed hands a few times over the course of the 150 years that the brand exists. At the end, it was part of the German management group Les Manufactures Horlogères SA ("LMH"). It was basically a toy of the managing directors who were happy to have that little jewel in their portfolio. Nobody really wanted to make it into a global brand before we bought it. Yes, it had a happy existence but never very much ambition to turn into a global brand.

What was the core strategy of Richemont when they purchased IWC?

They didn’t only purchase IWC, at the same time they purchased the two sister brands jaeger-LeCoultre (JLC) and A.Lange & Sohne. For at the time, created some money. People said Johann Rupert must have been completely out of his reasoning to pay that amount of money for it. They were all proven very wrong because the brands are now worth a lot more. Richemont just saw that there was a huge opportunity of uncut diamonds there that could be developed from a niche brand into a global luxury brand. You must also remember at that time there was no IWC boutique available or anything like that around the world. There were no online sales. It was basically just sold to the classical retail channel with jewelers in the Germanic countries. To have the vision that that brand had the right DNA to be turned into a global luxury brand was truly visionary Johann Rupert. He was proven right 20 years later.

What do you think it was about that brand DNA that made it possible to make it into a global brand?

It’s basically a heritage in credibility because customers even 20 years ago couldn’t be fooled, especially at those price points. We’re talking about products that, on average, would have retailed back then at around €5,000. It was very clear; the company was founded in 1868. Always produced outstanding time pieces. There was a real history there. Nothing fake. It was true. It could be traced back. There were archives there. There were spare parts available for pocket watches made 100 years ago. All the basics were there, there was a small museum, which later on we extended to a big museum. We could really trace where the company came from. It was all very clear. Much clearer than many other brands. There were no white spots in the history. The products today and the collector’s marker proves it. We’re always superb. It was clear the basis was there to build a brand that people could believe in and that they were happy to part with the substantial sums of money because they knew they were getting value. There were no fake marketing ideas. It was just a solid foundation.

Why do you think heritage is so important to building a brand?

I think it’s absolutely key. It doesn’t mean that you can’t build a new brand out of a brilliant idea or some superb design, but especially for hard luxury goods, say, watches and jewelry. The heritage is key because people want to buy a product that has a timeless value. That’s what’s so important about it. If you buy a piece of clothing, we’re not talking about fast-fashion, even if you buy a piece of clothing that’s worth a lot of money, you know that it’s going to go out of fashion at some point. With a watch, that’s not the case. If you buy a classic such as an IWC Portuguese or a Rolex Oyster or whatever, you know that you can probably pass it on as Patek Philippe says in the advertising, you pass it onto the next generation or even more than that. That’s why having the background, seeing the brand has been around for so long, it gives you the comfort of believing that the intrinsic value stays and you’re not squandering your money, it’s quite simple.

How do you bring that heritage to life when messaging to younger people?

It’s really about the message, not so much the channel. Back then, there was no social media the way we know it today. We really transmitted that message to all of our channels, be it online through the websites with the detailed texts that explained it, with printed books, with a magazine that the brand brought out. A printed magazine that was sent out to clients. I think it was four times a year, that always illustrated parts of the history. Books were made. A museum was launched for people that visited the brands. We made a lot of movies about the watch-making aspect, about the history.

Basically, it’s an omni channel approach to communication. You really have to play all the channels. Today, of course, it’s extended to all of the social media channels that we didn’t have at the time. The message hasn’t changed. The vehicles maybe are slightly more digital now than it was back then, but the message is the same.

You have the same message across all channels, just delivered in different ways.

Exactly. The message is really again about that authenticity, it’s probably the most important word. You want to be authentic. You want to have an authentic quality. Especially in newer markets such as in Asia back then for us, it was really important for clients to understand that this brand had been there for a long time, even if they had not heard about it before because otherwise they would have not spent that amount of money on the product. They would have gone to a brand, to one of the bigger brands, say, Rolex, because they were sure that that brand delivered this continuity and this heritage. That’s why we’ve had to convince these new customers that IWC had the same stature.

Moving on to look at the customer base then, how did you segment IWC’s customer base in that luxury watch segment?

Do you know what? We didn’t. We really believed in a product focused strategy. We’re not going to sit down and say, okay, we’re going to create this and that watch for this type of person with this age group and so on. There were some basics that were clear. We’re a very masculine brand. That was for sure. All the watches at that time were focused on men, even though there were a couple of female models, but that was very much sidelined. It was a masculine watch. There had to be a technical watch. It had to be clear, it had to be no diamonds. Classic. That was clear. We never sat down and said, we’re making a watch for a 30-year-old or a 30 to 40-year-old man that’s interested. We’re going to have the product and the product will find its fans. It always did. This was very much the product was there and the market developed around the product, not the other way around.

Is that unique in this space or is that just a sign of the ultimate luxury item?

It’s not unique to the watch world. I think it’s unique to high luxury in general across all product categories, but especially for watches and jewelry. For watches, probably even more because you see what your company is capable of in terms of technology, in terms of innovation and you create the most fantastic product around it. The price normally is secondary, so you don’t go out and say, we’re going to develop a product and it is allowed to cost so much. You first develop the product; you say how much are intrinsic costs and then you say that’s the price. For many years, it may change now that the world is changing, but for many years, that strategy worked really well for our watchmakers, so this is the price, these are the margins we need to have. This is the retail price. Again, the product is king and the clients flock toward the product when it goes out on the market.