In the Swiss watch industry’s version of retail 3.0 (shopping that utilizes new technologies to create a personalized experience), stores give way to bars and lounges, shoppers are no longer clients but guests, and sales are byproducts of the hospitality experience.
If that sounds farfetched, think again.
In early March, the Swiss watchmaker Audemars Piguet announced the opening of the first Audemars Piguet House in Asia, a 2,700-square-foot space located on the upper floor of a building in Hong Kong’s Central district. Open to the public, the house is designed to feel like the luxury apartment of a watch-expert friend, complete with a kitchen, dining area, and living room. And while timepieces are on display, the emphasis isn’t on sales.
“The whole notion is that this is not a boutique,” says Antonio Seward, president of Audemars Piguet North America. “It’s a place where we connect with our customers.”
The brand opened its first such space in Milan in November. A 2,000-square-foot New York lounge on the 29th floor of an office building in midtown Manhattan—located adjacent to the brand’s corporate office—is due to open in early April. More houses in London, Madrid, and Munich are expected to open later this year.
“We have a beautiful dining room with a full-fledged kitchen and a table that can seat 12 people,” says Seward. “We have a lot of young customers and part of the relationship is also having fun together. We’ll have a good sound system so we’ll put some music on. It’s a good way for us to connect.”
The concept places a premium on direct interactions with clients, something most Swiss brands have missed out on, given the industry’s traditional wholesale structure in which retailers act as middlemen. With brands increasingly going direct by opening their own boutiques and e-commerce channels, creating memorable hospitality experiences is an obvious way for them to expand their influence with clients—not to mention capture the margins they’ve long ceded to retailers.
“People will gather around things they identify with,” says Alexander Linz, head of content at Watch Advisor, a website that covers the Swiss watch trade. “If you wear an Audemars Piguet, you want to be around people doing the same. If you do that in an ambience that’s good and you meet people who help you do business or make friends, and the thing that melds you together is a wristwatch, well, I think that’s the future of retail.”
IWC Schaffhausen is also experimenting with its approach to retail. In late November, the Swiss-German watchmaker opened Les Aviateurs, an aviation-themed cocktail bar located next door to its boutique on the Rue du Rhône in Geneva. Run in partnership with the high-end department store Globus, the clubby space boasts its own dedicated entrance as well as an entrance accessible through the boutique.
CEO Christoph Grainger-Herr says the brand drew on its hospitality experience hosting clients at Geneva’s Salon International de la Haute Horlogerie. “The concept is very close to what we do at SIHH,” he says. “It came directly from the booth, and our themed menus with IWC-inspired cocktails.”
These sorts of brand extensions aren’t exactly new. In 2013, Blancpain unveiled its third boutique in Shanghai, drawing attention to a new lounge located above the store that would serve Swiss-made gastronomical delights “on the splendid terrace overlooking the entrance to the Xintiandi district,” according to a press release.
There is, however, a notable difference between the Blancpain lounge (and its ilk) and what next-gen retailers such as Audemars Piguet are doing. By disconnecting its houses from its boutiques, the latter is making clear that sales transactions are secondary to the experience of enjoying time in a brand-curated ambience—and that the word-of-mouth required to lure guests trumps all.
“We are not chasing traffic,” affirms Audemars Piguet CEO François-Henry Bennahmias. “We are chasing quality.”