Baume & Mercier-CEO Alain Zimmermann spoke to finews.asia about why selling fine jewellery on the Champs-Elysees is different from selling on Orchard Road.
Mr. Zimmermann, what does the recent pressure on the luxury goods industry mean for Baume & Mercier?
We cannot ignore that clients are much more questioning of what they are willing to do. The way you consider buying luxury goods is different, especially if you save up for a purchase you want to make sure you go for a brand you trust and that really matches your expectations.
And price sensitivity is quite important: clients are looking at how much value they get, at what price. This was always a strength of Baume & Mercier. It might not be the first criteria of things to look at, but when you want to make sure your hard-earned money is invested well, you want to ensure that you are invested in a good brand.
What other challenges have you been presented with in recent years?
After 2008 many brands disappeared. You want to make sure you can still get your watch repaired in 10 years – who will still be here?
It’s not an easy game and the entire context of the industry is tough: improving service, becoming even more client-centric, how to gain newer and younger clients, how to deal with millennials who think and behave so differently from previous generations, the importance of thinking digitally, and how much brand adaptation is needed for the new challenge without losing your authenticity and DNA.
What does Baume & Mercier or any luxury maker have to do differently when pitching to Asia clients?
In Asia, it is very important to understand who is who because it is linked to their culture and history and you cannot impose Versailles- or U.S.-style of selling to Asia, because you are fighting against a culture.
You need to understand the differences and take them into account, be agile enough to understand what you stand for, the service of your Maison and decide how much culture are you are willing and capable to integrate into your own way.
«Increasing trend in Asia towards buying what you believe is right for you»
Asian clients generally like more reassurance, the brands need to be known so brand awareness is very important. In many cases they give a lot of importance to the opinion of their peers, but there is an increasing trend in Asia towards buying what you believe is right for you, but the eyes of your first circle still remain important.
How are you dealing with the weakness in China?
It’s tough as in many industries, but every situation offers chances too and China is actually a nice opportunity for us in terms of our price positioning. Customers definitely don’t buy watches to tell the time: it’s more about status and an element of style. Our claim is that life is about moments, and in a short-term world cycle, your watch is key to becoming your memory-keeper.
«Maybe only you will understand the significance of your luxury good»
Every watch has this role to give this important dimension that maybe only you will understand. We still see opportunities because people still celebrate, even in tough times.
Of course it is harder and people are more price-sensitive, but if you provide more empathy and better service, clients will say «they are worth my money,» but you have to do it in a very authentic way.
With stations at Cartier, IWC and L'Oreal, Alain Zimmermann is a veteran of the luxury goods industry. He also spent three years in private banking, spearheading Julius Baer's marketing efforts until 2009. The native Frenchman who studied in France and Germany has run Baume & Mercier, a Geneva-based luxury watchmaker, for the past seven years.
At $4,000 to $5,000 for a Baume & Mercier watch, they are generally considered to be a gateway product to the wider luxury industry. The watchmaker is part of Swiss luxury goods group Richemont, which also owns Vacheron Constantin, A. Lange & Soehne, IWC Schaffhausen, Jaeger-LeCoultre, and Chloe among others, as well as 50 percent of online luxury fashion retailer Net-A-Porter.
