Immersive Experiences Take Center Stage: How Luxury Watch Brands Can Boost Revenue Growth in 2024
The luxury watch category is undergoing a sensitive era. The industry reported a 14% increase in its exports between 2019 ( CHF 21,7 Billion) and 2022 (24.8 Billion).
The Chinese market is the largest consumer in the segment. However, owing to the sluggish economy in China the US topped the charts in 2022.
Even 2023 isn’t an exception to this trend. The first 8 months watch exports clocked a growth of 10.2% in volume and 9.2% in value.
To add to this, the luxury watch segment is reporting an interesting trend in their online sales. A survey by Deloitte reveals that 38% retailers in the lower and mid segment ( Less than CHF 15,000) are witnessing higher online sales as compared to their offline counterparts. Further, as per the report 46% consumers will buy their luxury timepiece online.
E-commerce sales have seen consistent growth. Hamilton for e.g. sold 40% of their watches online in 2022. To add to this, 26% of Chinese consumers ( the largest luxury watch market) purchase their luxury watches online.
Though social media has reported marginal sales, brands use social media to engage and interact with their consumer base world wide.
With this research, watch companies with low to mid range price segments, can no longer take a backseat on e-commerce sales. They need to scale up their e-commerce tech stacks to ride the wave.
The consumer’s perspective
Purchasing a luxury watch is often driven by emotional factors such as status, prestige, and personal satisfaction. The decision to buy a luxury watch is not solely based on practical considerations; rather, it’s about the experience and the emotional connection that the consumer feels with the product.
The Gap
E-commerce sites with their 2D photographs of products, struggle to convey the full experience and emotional appeal of luxury watches. Even though brands provide detailed high quality images and descriptions, they lack the sensory elements. This element is crucial in high-value and sentimental purchases. Consumers struggle with time and have a short attention span. This coupled with missing sensory elements does not catch the attention of consumers. This is the gap that companies need to bridge.
The Solution
To address this challenge, companies are exploring innovative ways to create a more immersive and sensational experience for consumers. This involves incorporating virtual reality (VR) or augmented reality (AR) technology to allow customers to virtually try on watches or visualize them in real-world settings. By leveraging these technologies, consumers can get a better sense of how the watch looks and feels on their wrist. Thus, this tech enhances their emotional connection to the product.
Furthermore, virtual consultations with watch experts or concierge services, adds a personal touch. This helps bridge the gap between the digital and physical worlds. It makes consumers feel valued, understood and well guided.
Luxury brands therefore combine technology, storytelling, and personalized services. The result is a more sensational and emotionally engaging experience for consumers purchasing luxury watches online. It ultimately drives sales and customer loyalty.
Here are 4 outcomes of immersive experiences that are positively impacting the luxury watch segment.
- Consumer engagement
In simple words, Consumer engagement is the level of interaction and involvement that consumers have with a brand or its products. It encompasses various actions and behaviors, including browsing, interacting with content, making purchases, and providing feedback. A high level of consumer engagement indicates a strong connection between the brand and its audience. This leads to increased brand loyalty, higher sales, and positive brand perception.
Immersive experiences play a crucial role in enhancing consumer engagement. These experiences provide captivating and interactive encounters. This phenomenon stimulates the senses and evokes emotional responses.In Virtual environments consumers can explore products in a way that feels more tangible and real fostering a deeper connection with the brand.
Luxury watch brands have reported remarkable increases in engagement rates immediately after implementing immersive experiences.
- Increased average time on website
The average time consumers spend on websites is reducing globally. In 2024, businesses globally are reporting 53 seconds – 80 Seconds as an average time on a website.
In fact, the average attention span of consumers is reducing owing to the advertising noise on every inch of digital real estate.
On the other hand, many luxury watch brands have reported a commendable increase in their average time on site when they integrated immersive experiences on their ecommerce websites.
Immersive experiences enable consumers to engage with your products, exploring in playful ways. This is the reason for prolonged interaction of the consumers on your e-commerce site. Longer the duration of interaction, the more the chance that your product is well understood. This drives the product into the shortlisting and many times into purchasing.
- Social Selling
Social selling is key for luxury watch brands. With immersive experiences consumers virtually try products on.
Snap their photos wearing products that they are exploring for self-confirmation. The consumers tend to share those photos on social media. It helps to take opinions from their friends and family members, a process that brings consumers closer to decision.
Social media sharing also positively impacts the brand as the product reaches an extended audience and new communities.
- Decline in product return rates
The primary challenge facing the Luxury watch e-commerce is the higher rates of product returns. It poses significant concerns.
Globally, the average e-commerce return rate stands at approximately 30%, while within the luxury segment, this figure escalates to around 50% as reported by 3D look.
Such high return rates adversely affect profitability. It also strains inventory and complicates supply chain operations. Importantly, they have a negative impact on the overall brand reputation.
Integrating virtual reality via 3D visualization and animation, along with augmented reality featuring virtual try-on capabilities, presents an effective solution for consumers to identify suitable products.
Particularly within the luxury watch category, these technological advancements contribute to reducing product return rates.
Conclusion
Immersive experiences are amplifying luxury watch revenues. Adopting this technology isn’t a choice but a compulsion for brands.
While it is understandable that companies do not know how to go about building immersive experiences, P-XR AG supports by offering free consultations and evaluations. Reach out to us at contact@p-xr.ch or visit our website: www.p-xr.ch to book a consultation.
