To the uninitiated, the Tourneau Watch Company appears to be in trouble. Pulling out of a rental lease obligation and closing their flagship store on 34th Street here in Manhattan didn't help their cause. Rumors are like that, once they get started people assume the worst.
Now most people are saying this is a sign of the recession, but high-end luxury brands such as Lamborghini, Cartier or Prada actually do better in bad economic times. Why you may ask? Well, as the U.S. Dollar takes a nosedive, our goods become more expensive to us, but cheaper to foreign buyers. Let me explain...
Although prices are fast becoming out of reach to an American who wants to buy using U.S. Dollar bills, that higher price becomes a bargain to a wealthy business mogul from another country who is paying for their item using a stronger currency.
It is now cheaper to fly to America, pick out the latest Ferrari Testarossa, have it shipped backed to their native country and pay the import fees, taxes and shipping costs!!! If they ship to Italy, there may not be an import or duty fee because the Testarossa was built in Italy. Imagine that - the value of our dollar is so low luxury goods become a bargain to people not using the U.S. Dollar. Usually foreigners flock here by the droves to buy some of the luxury items mentioned above...unless their currency is in the toilet as well.
So in the grand scale of luxury items, expensive watches should be THRIVING in our current market. So why aren't they? Or more precisely, why is Tourneau not reaping the benefits of a downtrodden dollar?
It is simple actually.
90 million Generation Y adults DO NOT WEAR WRIST WATCHES!
And that number is only in The United States. Imagine how many young people globally are not really into watches and that is a whole lot of lost revenue. BTW: Generation Y are not kids anymore...they are anyone who is 39 and younger. They stopped using a wristwatch as a time keeping device because they can use their smart phones to tell time. Now I might be exaggerating when I say not one Gen Y wears a wristwatch, but look around and see for yourself...not many huh?
The photo to the left is staged by a photographer...notice the big wristwatch on the young man? The belt on the young lady? Pay attention to subtle trends especially in fashion. What has the wristwatch become? A status symbol.
500 year old business models are being disrupted because of the habits of a new breed of adult.
What other business models—besides not wearing a wristwatch—are losing sustainability due to something Generation Y Millenials DO NOT DO:
Rarely wear a tie or belt (tie sales have slumped)
Go shopping on a regular basis as a social activity (Notice the empty Malls?)
Browse a bookstore for the perfect book (empty bookstores, full coffee shops)
Stay late at work
Save for retirement
Buy used
Sit for hours and watch television
Save to go on vacation (they just go somewhere)
Watch, buy or collect "old stuff" (Boomers do that)
Send Christmas Cards through the mail
(you know, that building called the Post Office?
It is becoming a relic of the past as e-cards are easier to send.)
(you know, that building called the Post Office?
It is becoming a relic of the past as e-cards are easier to send.)
Now if you know your business sector is shrinking, would you keep selling the old-fashioned way or reinvent your brand from the inside out? Since Gen Y is not brand loyal, but is brand driven, what would you do to win their business? You can hate it, judge it or point fingers while you go out of business, or listen with your ear to the ground. Here is one of my favorite quotes that I put in my book Liquid Leadership: From Woodstock to Wikipedia. It explains everything...
Time for reinvention. Time to create new opportunities. Time to listen to your younger employees who have a different method of operating and buying and you will understand your new customer. Listen for the big shift in buying habits that could save your business.
"You never change the existing reality by fighting it.
Instead, create a new model that
makes the old one obsolete."
—Buckminster Fuller
Tourneau is reinventing their brand with more modern stores like the Tourneau Concept Store, Tourneau Time Machine, Watch Gear and something new for high-end items, a less snooty attitude. Younger buyers love the bragging rights that come from buying the best, especially in their digital devices, but they hate the exclusivity that some of the more traditional brands hype as part of their ad campaign. Look at the high-end―Haute-Couture―brands that have made themselves open and available to a new consumer without destroying their high-end image: Hugo Boss, Gucci, Dooney & Bourke and Ralph Lauren.
Like I said before―Generation Y and Millennials
are not brand loyal, but they are brand driven.
are not brand loyal, but they are brand driven.
At work, you want someone raised on video games, karate classes and dance lessons to sit in a cubicle for 8 hours a day? Good luck with that. Generation Y are independent thinkers and they will not change. They are the ones driving all the digital devices and markets these days...after all, they spend regardless of the economy. Time for you to awaken and reinvent what you thought you knew.
Thanks again for reading...
Brad Szollose
PS: Sorry about neglecting my blog for so long...summer was exciting as I am sure yours was as well. Along with a hurricane named Irene and floods, and traveling to some amazing speaking opportunities we are all doing well here at Brad Szollose Headquarters. Thank you and I look forward to the end of 2011 and an awesome 2012;-)
Brad is the 2011 Axiom Business Book Award silver medal winner for his book Liquid Leadership: From Woodstock to Wikipedia: Multigenerational Management Ideas That Are Changing The Way We Run Things ISBN-13: 978-1608320554
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