Watches - UK - December 2005

INTRODUCTION AND ABBREVIATIONS
Definition
Consumer research
ACORN
Advertising data
Abbreviations
PREMIER INSIGHT
Addressing the consumer dissonance
‘The flair ain’t there’
Trading up online
Converging with other technologies
EXECUTIVE SUMMARY
Changing consumer attitudes providing a fertile backdrop
Stylish innovation driving growth
Women’s segment growing fastest
New technologies
Disparate supply structure
Advertising and promotion strongly weighted in fourth quarter
Upmarket retailers growing
Price less of a consumer issue
Continuing market growth
MARKET DRIVERS
Needs versus desires
Changing attitudes towards fashion, style and dress
Figure 1: Agreement with selected lifestyle statements, 2001-05
Men more likely to wear a valuable watch as a status symbol
Figure 2: Agreement with statement ‘I often wear a valuable watch’, by gender, by age and socio-economic group, 2005
Differences by age
ABC1s can afford a valuable watch
Younger male consumers look for the brand
Figure 3: Agreement with statement ‘A designer label improves a person’s image’, by gender, by age and socio-economic group, 2005
The gifting occasion is key
Developing the gifting occasion
UK gentrification
Figure 4: UK population, by socio-economic group, 2000 and 2005
Consumer expenditure drives non-essential purchases
Figure 5: PDI and consumer expenditure, 2000-05
Changing distribution map
Figure 6: UK population, by age, 2000 and 2005
MARKET SIZE AND TRENDS
Value continuing to outstrip volume
Figure 7: UK retail sales of watches, 2000-05
Style and distinctiveness
Vigour and competition
Growing competition
£50-150 the most competitive price band
Product portfolios
Watches and cars
Gift purchase
 WATCH OWNERSHIP AND EXPENDITURE
Figure 8: Ownership and purchase of watches, 2004 and 2005
Older consumer are key owners
Figure 9: Ownership of watches, by age, 2005
Consumers are more likely to purchase for themselves
Figure 10: Bought for self or for someone else, 2004 and 2005
Younger consumers are key purchasers
Figure 11: Purchase of watches in the last 12 months, by age, 2005
Changing brands and fashions
An emotional treasure
 EXPENDITURE
Figure 12: Expenditure on watches bought new in the last 12 months, 2003-05
MARKET SEGMENTATION
Mainstream sector dominates in volume…
Figure 13: UK retail sales of mainstream and luxury watches, by sector, by volume and value, 2000-05
…but the luxury sector dominates in value
Figure 14: Mainstream watch sales as proportion of total watch sales in UK, by volume and value, 2000-05
The value split
Quality and rarity
 MAINSTREAM WATCHES MARKET
Figure 15: UK retail sales of mainstream watches, by volume and value, 2000-05
Strong real growth
Figure 16: UK retail sales of all watches, by movement/display, by volume and value, 2001-05
Quartz versus mechanical
The return of the digital?
Changing styles
Figure 17: UK retail sales of all watches, by sector, by volume and value, 2001-05
The women’s sector
Children growing older younger
NEW PRODUCT DEVELOPMENTS
Spring Drive movement
Seiko 2
Convergence with other technologies
Multi-functionality
Materials
Technology and the future
Technology as protection?
THE SUPPLY STRUCTURE
 FOREIGN TRADE
Figure 18: UK foreign trade in watches, 2000-04
Swiss exports to the UK
Figure 19: Swiss watch exports, by leading countries of destination, 2000-04
The UK as an importer
 COMPANIES AND BRANDS
Figure 20: Brand shares of new sales in the UK watch market, by volume, 2001-05
Accurist Watches Ltd
Casio
Citizen Watch UK Ltd
Fossil
The Inter-City Watch Company
Rotary Watches Ltd
Seiko UK Ltd
The Swatch Group
Time Products UK
UK Time Ltd
Zeon
Other companies
ADVERTISING AND PROMOTION
Figure 21: Main monitored media advertising expenditure on watches, 2000-05
Ad budgets rise through the market
Figure 22: Main monitored media advertising expenditure on watches, by media and quarter, 2004
Print is king
Seasonal spend
Figure 23: Main monitored media advertising expenditure on watches, by leading advertisers, 2003 and 2004
Luxury brands dominate
Seiko the most important player in the mainstream market
Recent campaigns
Other methods
Retailer initiatives
Reaching the trade
DISTRIBUTION
Static distribution map
Figure 24: UK retail sales of watches, by outlet type and volume, 2001-05
Retail change
Mixed news for the multiples
The Signet Group
The Goldsmiths Group
The MW Group
Other multiples
Even more mixed for the independents
Argos
Fashion outlets
Department stores
Gift shops and sports outlets
Online selling
The luxury sector online
The future for online
TV shopping
THE CONSUMER – PRODUCT ATTRIBUTES SOUGHT
Figure 25: Product attributes sought, 2001-05
Subtle shifts
Brand and function
Men like added-value attributes
Older consumers prefer traditional 12-hour watches…
…but younger consumers look for the brand
Figure 26: Purchasing attributes sought, by age, July 2005
 CONSUMER BEHAVIOUR
Figure 27: Purchasing motivations, July 2005
Discretionary purchase
Gifting occasions
Younger consumer purchase on impulse
Figure 28: Agreement with the purchasing motivation ‘Something caught my eye in the shop’, by age, July 2005
DETAILED DEMOGRAPHICS
 OWNERSHIP AND PURCHASE
Figure 29: Ownership and purchase of watches, by gender, age, socio-economic group, presence of children, marital status, working status, household size, region, lifestage and Mintel’s Special Groups, 2004 and 2005
 PRODUCT ATTRIBUTES SOUGHT
Figure 30: Product attributes sought, by gender, age and socio-economic group, July 2005
Figure 31: Product attributes sought, by presence of children, lifestage and Mintel’s Special Groups, July 2005
Figure 32: Product attributes sought, by marital status, working status and household size, July 2005
Figure 33: Product attributes sought, by region and ACORN category, July 2005
Figure 34: Product attributes sought, by media usage, commercial TV viewing and supermarket used, July 2005
Figure 35: Product attributes sought, by gender, age and socio-economic group, July 2005
Figure 36: Product attributes sought, by presence of children, lifestage and Mintel’s Special Groups, July 2005
Figure 37: Product attributes sought, by marital status, working status and household size, July 2005
Figure 38: Product attributes sought, by region and ACORN category, July 2005
Figure 39: Product attributes sought, by media usage, commercial TV viewing and supermarket used, July 2005
 DETAILED DEMOGRAPHICS – PURCHASE TRIGGERS
Figure 40: Purchasing motivations, by gender, age and socio-economic group, July 2005
Figure 41: Purchasing motivations, by presence of children, lifestage and Mintel’s Special Groups, July 2005
Figure 42: Purchasing motivations, by marital status, working status and household size, July 2005
Figure 43: Purchasing motivations, by region and ACORN category, July 2005
Figure 44: Purchasing motivations, by media usage, commercial TV viewing, and supermarket used, July 2005
THE CONSUMER – ATTITUDES AND BEHAVIOURS
Figure 45: Attitudes towards watches, July 2005
The duality of watches
Who is who
Figure 46: Agreement with ‘I have more than one wristwatch to wear for different occasions’, by Mintel’s Special Groups and household size, July 2005
Disposable income
Break down the obstacles to purchase
Developing the finer points
DETAILED DEMOGRAPHICS – CONSUMER ATTITUDES
Figure 47: Attitudes towards watches, by gender, age and socio-economic group, July 2005
Figure 48: Attitudes towards watches, by presence of children, lifestage and Mintel’s Special Groups, July 2005
Figure 49: Attitudes towards watches, by marital status, working status and household size, July 2005
Figure 50: Attitudes towards watches, by region and ACORN category, July 2005
Figure 51: Attitudes towards watches, by media usage, commercial TV viewing and supermarket used, July 2005
 ASSESSING KEY TARGET MARKETS – CONSUMER TYPOLOGIES
Figure 52: The consumer typologies, July 2005
Cluster 1 – Replacers (29% of sample)
Cluster 2 – Upgraders (17% of sample)
Cluster 3 – Gift Givers (16% of sample)
Cluster 4 – Impulse Shoppers (10% of sample)
Cluster 5 – Non Clock-Watchers (28% of sample)
Figure 53: The consumer typologies, by gender, age and socio-economic group, July 2005
Figure 54: The consumer typologies, by region, marital status and working status, July 2005
Figure 55: The consumer typologies, by presence of children, Mintel’s Special Groups and lifestage, July 2005
Figure 56: The consumer typologies, by media usage, supermarket used and commercial TV viewing, July 2005
Figure 57: The consumer typologies, by household size and ACORN category, July 2005
Figure 58: The consumer typologies, by purchasing features sought, July 2005
Figure 59: The consumer typologies, by purchasing motivations, July 2005
Figure 60: The consumer typologies, by consumer attitudes, July 2005
THE FUTURE
Previous growth forecast set to continue
Faster growth in volume than value
Will functionality become redundant?
Innovation-led growth
The evolving distribution map
FORECAST
Market growth set to continue
Figure 61: Forecast of the market for watches, at current and constant prices, 2005-10
Luxury watches forging overall value growth…
…but mainstream watches will remain critical to volume sales
Multiple watch ownership will drive sales
Figure 62: Forecast of the market for watches, by volume, 2005-10
Factors incorporated in the forecast