Luxury watches and tech: who is driving whom?

Luxury products, it seems, are being trampled over by technology-enabled products enticing luxury customers.

Apple created its own version of ceramic enforced gold. The real number of the Apple watches in gold casing shipped remains a mystery although an estimated total of 10M pieces are expected to have shipped by the end of 2015.

Apple approached Hermès, the 600 year old luxury marque for a collaboration. Possibly so Apple could open a new market for itself and Hermès could make its mark on tech savvy luxury buyers.

Hermès, however, is an odd choice, seeing as it is far from being the top luxury watch maker and seller. Apple gets to borrow Hermes’s aura, their channel and possibly their customer base — Hermès does not market aggressively to its masstige customer while its prestige customer may or may not like being sold to — and Hermès gets to sell some fabulous leather straps to Apple. The collaboration looked like Apple is driving it.

Meanwhile out of Rolex, Omega and Breitling, the top 3 luxury watch marques, only Breitling has dipped its toe in the smartwatch waters. With its Breitling B55 Connected.

Brietling’s vision is to make the phone subservient to the watch, to enhance the watch. To wit: “In creating its first connected chronograph, Breitling has applied a new philosophy placing the smartphone in the service of the watch so as to enhance its functionality and conviviality. The instrument of the future.” The Breitling B55 Connected builds on the earlier launch of B50, which is an an electronic multi-function chronograph movement, with analogue and digital displays. The idea was to serve pilots — Breitling’s primary audience, but also its aspirational audience — better and to pave the way for other developments.

A few others have made their first moves too. Gucci unveiled a high fashion version of Will.I.Am‘s smartband. Will.I.Am’s role as the creative innovation lead in Intel’s wearables business is not widely known. He is not afraid to fail or experiment. Movado has teamed up with HP to create an Android and iOS compatible watch – the Movado Bold Motion – which uses Bluetooth connectivity and vibrations and visual cues to upcoming important things, all while looking stunning as Movado watches do. At Baselworld 2015, Bulgari unveiled its Diagono Magnesium Concept watch. The watch uses WISeKey’s NFC chip to unlock an application that can store encrypted data on the cloud and communicate with other devices within its range. The data is reportedly secure in an underground bunker in the Swiss Alps. Um, ok. WISeKey’s technology works with both Android and iOS. Then there is Tag Heuer’s Connected, which runs Google Wearable OS, and the order numbers have just been upped significantly to serve the upcoming holiday demand.

With all these options, one wonders: What does a customer choose first — the watch or the technology platform/ OS? More to the point, will the technology platform ever drive a watch purchase?

Curious, I conducted an unscientific survey of (admittedly male) friends, who own watches each costing over £10,000. Unsurprisingly they are all eyeing the Tag Heuer and the Breitling, but not as their main watches.

“Look, I need the battery to last weeks not 6h. I sometimes have two flights to catch in a day and a tight meeting schedule in between.”, said one.

Another said, “As I become more senior, I am less interested in being available to all messages and people all the time. I need time to reflect, uninterrupted by pings and notifications, and as far as I can tell that is all smart watches are doing right now.”

“Whatever it is, I ain’t changing my mobile phone for a god-damned watch. Something will come along that suits me and does not ask me to suit it. Capiche?”, said another. Ooh, burn.

So, if the smart watch is not the main watch, is the connectedness spiel just another nice-to-have and not really a need-to-have feature?

What does that mean for the market that can actually afford luxury smart watches?

Who understands this subtlety of customer behaviour in the luxury market?

It sure ain’t Apple. Or HP. Or even WISeKey.

The luxury brand, on the other hand, owns the customer relationship and understands their customers’ behaviour and quirks. The brand also gets to choose which tech to use, and may choose technologies that are OS-agnostic so as to serve all of their existing customers. The brand, if not inclined to investing in development by itself, could always reach out to wearable companies such as Olio Devices, which were among the first to understand that the customer doesn’t want to change her phone OS, based on the watch she covets.

So, back to — who is driving whom as far as luxury watches and tech go?

Tech may have started it all but tech isn’t driving the conversation in this space any more.

As luxury goes, consumers rule, and luxury brands are expectedly showing a more subtle understanding of the consumer than tech players may assume.

PS: I am an all-in Apple ecosystem user.

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I occasionally play a game with my friends, where I rapidly say some words aloud and they respond with the first visual image that pops up in their minds. It is a rough version of the IAT and some fascinating conversations result from there.

With the word “creativity”. I hear responses ranging from names of luxury brands, to activities such as drawing or fashion design, to adjectives people associate with “creative people”. It is common though astonishing to me how so many people think creative people are different from them in ways they could not articulate.

This week’s readings are all about creativity.

While it is evident that announcing a creativity department does not help organisations, managing creative people has always been tricky. Not least when research finds how creative people are likelier to have dubious ethics.

However, being creative also has an undeniable dark side—one that can be very costly for companies if left unchecked. Research has shown that while creative people are adept at coming up with new ideas, they can also be more likely to engage in morally questionable behaviors. In a set of studies, Francesca Gino at Harvard Business School and Dan Ariely at Duke University found that creative thinkers are better at rationalizing dishonesty than uncreative thinkers. “Thinking outside the box” can lead to acting unethically.

The explanation sounds simple but worth pondering over.

The idea that creativity is rare leads to a sense of entitlement; if you are creative, you see yourself as more deserving than others. Leaders reinforce this when they don’t hold creative people to the same rules as those who are less creative, or when they give them special treatment.

Can we all be creative? Are we all already creative and just don’t know how to give expression to it? Here is an interesting perspective on broken sleep as a creative window. The whole essay is worth reading.

Night also triggers hormonal changes in our brains that suit creativity. Wehr has noted that, during night-waking, the pituitary gland excretes high levels of prolactin. This is the hormone associated with sensations of peace and with the dreamlike hallucinations we sometimes experience as we fall asleep, or upon waking. It is produced when we feel sexual satisfaction, when nursing mothers lactate, and it causes hens to sit on their eggs for long periods. It alters our state of mind.

Prolactin levels are known to increase during sleep, but Wehr found that (along with melatonin and cortisol) it continues to be produced during periods of ‘quiet wakefulness’ between sleeps, triggered by the natural cycles of light and dark, not tied to sleep per se. Blissfully zonked out by prolactin, our night brains allow ideas to emerge and intertwine as they might in a dream.

Wehr suggests that not only have modern routines altered our sleeping patterns, they have also robbed us of this ancient connection between our dreams and waking life, and ‘might provide a physiological explanation for the observation that modern humans seem to have lost touch with the wellspring of myths and fantasies’.

Ekirch agrees: ‘By turning night into day, modern technology has obstructed our oldest avenue to the human psyche, making us, to invoke the words of the 17th-century English playwright Thomas Middleton, “disannulled of our first sleep, and cheated of our dreams and fantasies”.’

This is an oldie but a goodie by John Hagel that I re-read this week – the manifesto for a passionate creative person.

… we celebrate the passionate and dedicated individuals in all fields who have both led us to where we are now, and are creating and shaping the future. They are explorers, pushing back the limits of our current understanding. They pioneer new ideas, discover new truths, and tirelessly innovate. They actively seek out new challenges and connect broadly with others to solve them. Though they come from every occupation and background, they are unified by the sincere belief that they can leave the world a better place than they found it.

And lest we should think all this is airy-fairy bunkum, I came across this heartening story of Cuba’s creative voices are dealing with constraints.

Very early on the second day, when we were working together to think about how our group might concoct ongoing meetings, one member, a self-described pedagogue who helps lead Cuba’s school of design, said ‘Of course all Cubans are designers. Take for example my car: it’s an old Peugeot from France with transplants, an engine from Russia, a German carburetor and a steering system from Italy. To live here, one has to be a designer.’

Constraints lead to creative solutions, something known as Jugaad in India. Making such constraint-led creative fixes sustainable and scalable is the problem definition, the chasm between creativity and innovation.

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This week’s links on design-thinking and design come right after I shared some observations made on a recent trip to India.

Apple is giving design a bad name, writes Don Norman, who established the User Experience Architect’s Office later becoming Vice President of Apple’s Advanced Technology Group. His co author is Bruce Tognazzini, a usability expert. A long read that Norman first said in August 2015 he was writing.

Apple is destroying design. Worse, it is revitalizing the old belief that design is only about making things look pretty. No, not so! Design is a way of thinking, of determining people’s true, underlying needs, and then delivering products and services that help them. Design combines an understanding of people, technology, society, and business. The production of beautiful objects is only one small component of modern design: Designers today work on such problems as the design of cities, of transportation systems, of health care. Apple is reinforcing the old, discredited idea that the designer’s sole job is to make things beautiful, even at the expense of providing the right functions, aiding understandability, and ensuring ease of use.

So, what is the special sauce that makes one an exceptional designer?

Exceptional designers have strong human values such as empathy, respect, and honesty. These values not only influence a designer’s approach to developing products, but also their approach to working with colleagues. After all, building great products doesn’t happen in a vacuum.

Here is another twist on design. Our desire to design humans has a long and peculiar history. With a presentist lens much of it is quite squirm-inducing. But a worthy read.

Not all Americans who supported eugenics were racist and nativist. To a first approximation, everyone was a eugenicist in the early 20th-century US. But for the core of the movement, the eugenic tenet that any disability was all in the genes also put scientific teeth into laws setting racial quotas for immigrants. Reformers pressed for mandated sexual sterilisation of those deemed unfit, including the feebleminded, the criminal, the deaf, the crippled, those with venereal disease and other conditions.

Finally this eclectic collection of one hundred quotes on design caught my eye. Here is one:

Design is thinking made visual. — Saul Bass

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This series took two weeks off due to urgent travels, but we are back now. This week’s readings discuss Purpose and Meaning.

Fast Company interviewed several entrepreneurs who believe they have created businesses that mean something to their customers.

These are not just stories about underserved consumers; these are stories about people who could not get on with their jobs or their family lives because brands were not thinking about their needs. “These are stories shared by millions of people,” Walker says. “We take a very consumer-centric approach to our innovation. It’s not about building it and seeing if they come; it’s talking to them and knowing that they will come.”

LinkedIn’s founder Reid Hoffman writes about the power of purpose at work. Purpose not perks.

According to Imperative’s research, purpose-oriented employees are:

* 54 percent more likely to stay at a company for 5-plus years
* 30 percent more likely to be high performers
* 69 percent more likely to be Promoters on Bain & Company’s eNPS scale, which measures employee engagement and loyalty

So how to find one’s own true purpose? Help is at hand from several corners, as curated by Maria Popova. Here, Paul Graham on the false metric of “prestige”:

What you should not do, I think, is worry about the opinion of anyone beyond your friends. You shouldn’t worry about prestige. Prestige is the opinion of the rest of the world.

[…]

Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. It causes you to work not on what you like, but what you’d like to like.

[…]

Prestige is just fossilized inspiration. If you do anything well enough, you’ll make it prestigious. Plenty of things we now consider prestigious were anything but at first. Jazz comes to mind—though almost any established art form would do. So just do what you like, and let prestige take care of itself.

Prestige is especially dangerous to the ambitious. If you want to make ambitious people waste their time on errands, the way to do it is to bait the hook with prestige. That’s the recipe for getting people to give talks, write forewords, serve on committees, be department heads, and so on. It might be a good rule simply to avoid any prestigious task. If it didn’t suck, they wouldn’t have had to make it prestigious.

A lot of times, pursuing and even re-focusing on one’s own purpose means saying No. No is a full sentence. Here is an interesting, rambling piece by Tim Ferriss who is taking a break from investing in and advising startups, and may do the same for conferences, interviews etc.

To become “successful,” you have to say “yes” to a lot of experiments.  To learn what you’re best at, or what you’re most passionate about, you have to throw a lot against the wall.

Once your life shifts from pitching outbound to defending against inbound, however, you have to ruthlessly say “no” as your default. Instead of throwing spears, you’re holding the shield.

On that business of saying “yes” to a lot of experiments, here is a bonus link — for one year, Shonda Rhimes said “yes” to everything. Here is how it started.

“My oldest sister said to me, ‘You never say yes to anything.’ And by that she meant I never accept any invitations,” Rhimes says. “I never go anywhere. I never do anything. All I did was go to work and come home. And she was right. My life had gotten really small. Once I sort of realized that she was right, I was going to say yes to all the things that scared me, that made me nervous, that freaked me out, that made me think I’m going to look foolish doing it. Anything that took me out of my comfort zone I was going to do it, if asked to do it.”

 

 

 

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The luxury sector is negotiating the tight rope between its traditional exclusivity and the open-all-hours, democratising nature of the web. It is a fascinating space to watch as new ways of enticing and engaging with the customer emerge.

This long Luxury Society piece explores the emerging influencers and how brands are finding their feet in this new dance. The most telling line in the piece:

“The internet is a chance for luxury, because in order to maintain the dream value of the brand, you have to permanently refuel that dream…”

Refuelling dreams repeatedly is easier when the shop front is really open-all-hours as the web makes possible.

Relevance. As thing go digital at a rapid pace, relevance is the holy grail for luxury brands too, as Rebecca Robins writes.

An even more fascinating movement among the legacy brands is the movement across brands – the “brand tangos” that boost their reputation through collaboration. Think the Apple Watch Hermès cross-over. Legacy brands are tapping into tech brands to increase awareness and connect with consumers. Tech brands are tapping into legacy brands for their heritage and exclusivity.

The resulting blurring of boundaries increasingly calls into question whether we will even be defining brands by sector in years to come.

Talent is central to this ongoing quest for relevance. Lately luxury brands have been poaching talent from among mass market brand leaders. The skills at a premium? Time to market and omni-channel reach.

“Traditionally reliant on in-store experiences, the luxury end of the market is slowly realising that online retail is a crucial factor in future growth. .. Luxury brands are looking for broader retail skills to match today’s omnichannel retail world, Twyford said.”

“Twyford explained that luxury brands pale in comparison to the likes of Uniqlo, H&M and Zara when it comes to their speed to market. As mass-market brands soar in their ability to maintain low-costs while still appealing to millennials, logo-reliant brands like Ralph Lauren feel static,..”

And finally, a luxury good we all desire more of — silence. The essay discusses advances in airlines and automotives, to create silence which may be physically nauseating — our vestibular system draws upon noise to give us a sense of balance and spatial orientation —  and ends on a note which summarises why silence is truly a luxury good.

The hushed halls of affluence buffer the rich from the hubbub of poverty, but for the poor, the clatter of modern life—like other forms of pollution—is inescapable. And as noise continues its inexorable advance into the quietest eddies of wilderness, even the rich may find a silent retreat impossible to locate.

Bonus link: An impossible to locate silent retreat is what Rachel Nuwer found when she set out to locate the last place on earth without human noise. Two fascinating nuggets stand out:

Hempton and Krause hope that nations will adopt a quiet area program akin to dark sky programs. They are pushing for the US National Park Service to adopt such regulations in 2016, in time for the agency’s centennial. “I absolutely believe we will have our quiet places,” Hempton says. “Just like we went through with water quality, things have to get really bad before we recognise them as a basic value and clean them up.”

Where others tend to become uncomfortable in the disconcerting silence, Foy relished the chance to be completely cut off. But minutes into his stay in the chamber, he noticed that the silence was in fact broken. His own body, it turned out – his breathing, his heartbeat, even the scratchy sound his scalp made rubbing against his skull when he frowned – was betraying his quest for auditory nothingness. “The only time you’ll hear absolute silence is when you’re in no position to hear it, because you’re dead,” he realized.