The modern watch industry is often discussed in terms of changing consumer preferences, emerging technologies, and shifting market demand.
Beneath the headlines and broader industry trends, other factors shape the market and deserve closer examination.
Something I think is often misunderstood is the dynamic between consumers, smartwatches, and traditional watchmaking.
Within parts of the traditional watch industry, smartwatches are still perceived very differently from conventional timepieces. While they clearly serve a purpose and are popular with the younger generation, lines of demarcation remain.
For example, smartwatches are not necessarily appropriate for every environment or occasion. Someone may wear an Apple Watch during their normal day but choose a mechanical or traditional quartz watch for an important business meeting, formal function, or wedding.
The ‘switching off’ trend is also taking hold, with people aiming to live less connected, or ‘digital’, lives. We hear from many consumers that today’s digital world is “too much.”
Another rarely discussed factor that needs serious attention is security. People working with sensitive or classified information face restrictions on wearable electronic devices because of their recording, connectivity, and transmission capabilities.
Similar restrictions apply in mining, defence, and other specialised industries, where electronic equipment must meet specific certification requirements before it can be used in certain work environments, with some already prohibiting the entry of any transmitting or receiving device into the workplace. These factors help explain why traditional mechanical and quartz watches still hold an important place in the market.
I would also disagree with any broader suggestion that watchmaking itself is moving closer to jewellery.
Of course, there will always be some crossover between the two industries, particularly with watches set with colour gemstones. There are also businesses, particularly in markets such as the United States and the Middle East, that specialise in aftermarket diamond setting and customisation.
However, aftermarket modification is very different from traditional watchmaking.
In many cases, heavily modifying a recognised timepiece with aftermarket diamonds can negatively affect its desirability and resale value. Collectors generally place considerable importance on originality, provenance, and factory configuration.
In my view, the shift in watchmaking today isn't that it is becoming closer to jewellery, but that the industry's structure is changing.
One of the biggest problems is the shortage of skilled watchmakers. Traditional watchmaking schools simply do not have the intake they once did. This varies by country, and some regions still attract healthy numbers of students, including parts of Asia, the United States, and the Middle East.
At the same time, major watch brands are increasingly developing and operating their own training programs. This benefits those brands because they can train technicians specifically on their products and servicing procedures; however, it also means the industry is becoming less reliant on the traditional independent watchmaking education model.
The shortage of watchmakers has also contributed to significantly extended service turnaround times in some parts of the industry. Customers are becoming increasingly aware of this, and excessive service times can absolutely influence future purchasing decisions.
Another major change is the extraordinary growth of microbrands. Today, the watch market offers consumers far more choice than it did even ten years ago.
Every watch sold by a successful microbrand is potentially a sale that might have gone to an established manufacturer.
This matters when assessing reports of a downturn in the watch industry. Much of the data commonly reported relates to Swiss watch exports or the performance of major watch groups. That does not necessarily represent the entire global watch market.
Such figures do not tell the full story. They do not fully reflect domestic manufacturers in countries such as China, nor do they necessarily represent the performance of major Asian brands including Seiko, Citizen, and Casio.
Brands such as Orient Star are also continuing to build their presence in markets including Europe.
Even within groups, performance can vary considerably between brands and regions. Australia has its own unique situation!
We have seen many jewellery businesses reduce or completely move away from watches. However, that does not necessarily mean the customer has disappeared.
Instead, specialised independent watch retailers have increasingly filled that gap. Where an area may once have had three or four jewellery stores selling many of the same watch brands, today there may be one specialist watch retailer carrying five or more brands. That business consequently captures a much larger proportion of the local watch customer.
Another significant issue affecting the Australian industry receives very little attention, and that is the retirement of traditional family-owned businesses.
Many long-established ‘mum and dad’ jewellery, watch, and clock businesses are reaching the point where their owners are retiring, and the next generation simply does not want to take over the business.
We have already seen a considerable number of established stores close along Australia's eastern seaboard, with more expected to follow. Watchmakers and clockmakers are affected by the same demographic shift.
The result is that businesses such as ours are now receiving increasing numbers of enquiries from across Australia, not only directly from customers seeking watch repairs, but also from retailers and other businesses requiring servicing support.
So while parts of the traditional industry may report declining numbers, I believe it is important to distinguish between a reduction in demand and a redistribution of where consumers are buying watches. Online sales are now a major player, and it’s important to consider where customers are having their watches serviced.
From what we are seeing at the bench, the Australian watch industry is not disappearing. It is changing to the point where you can say it's starting to grow.
Name: Krzysztof Jakubaszek
Business: AJ Watch Repairs
Position: National Service Manager
Location: Canberra, ACT
Years in the industry: 30
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