The Shape of Things to Come

[bpsmith]

Looks like what we have have been thinking is what the future looks like for TAG Heuer.

Less volume, higher price…

https://apple.news/Ab1x5wF1NQzalYtjqVB6TvQ

 

[Mspeedster]

As @Jemagloh would say, searching for that dislike button!

 

[matthew_VA]

He's got to dress better than that if we wants to elevate the brand... sorry had to!

 

[Hubert]

Fine. With higher prices, come higher expectations. Don't be surprised when people don't fork 10K for lazy or recycled designs.

 

[Pitfitter446]

Do these guys believe their own hype?

 

[bpsmith]

The more people buy at these elevated prices, the more TAG Heuer believe the hype!

My orange Aquaracer was £2,800 when I got it, but I got 20% off that. I was ok with risking the dodgy Calibre 5, as really like the design and colour.

7 months later…it’s been in for repair with the known fault that was allegedly no longer an issue due to supposedly being resolved with a revised movement…plus it’s now £ 3,050.

Would I buy it at current RRP? No chance!

Edited: Jul 24, 2023

 

[bpsmith]

TAG Heuer are not alone in thinking they are doing everything right. Many brands are experiencing record gains at the consumer’s expense currently, but it appears that not many customers are cutting back as much as you might expect.

Demand led game presently, but will it last the long haul once people realise what they’re (not) getting for their money nowadays.

Or is it just a case of us all wanting what we want, with price just accepted?

 

[Jim Dollares]

I don't understand the pricing strategy, which means I am not the target customer going forward. Surely there are plenty potential customers out there happy to spend crazy money on luxury items, and luxury in the 21st century means high price and branding. Quality and the actual product has nothing to do with luxury in today's world. A higher price means more exclusive and luxurious in this brand obsessed society of ours.

I really really wish we had someone on the inside at TAG or a similar big Swiss brand. What could the manufacturing cost be for a $9400 Monaco? Qualified guesses anyone? Perhaps $300, or even $450? Of course material and production cost of mass producing a cheap factory made product has nothing to do with luxury (high sales price and brand perception) but it is a curious thought what wonderful margins the luxury groups have for their products.

Anyway, what brand forum should we all move to? My next purchase might be a German one, German watch prices have gone up too but still reasonable compared to the Swiss madness.

 

[Mspeedster]

I can't see this strategy working unless they get rid of their quartz line up and Selitta based movements. They basically can no longer be that "first luxury entry watch" for the young buyer if they really want to move up the ladder.

 

[bpsmith]

That makes sense. Solargraph probably doesn’t cut it in that world either.

 

[abrod520]

While I think the detail work on the Skipper suggests good things to come, that $9000 and up space is very competitive with some serious craftsmanship. In my opinion TAG is not able to compete in that space at the current levels of finish, attention to detail and movement technology.

 

[YG_Rulz]

I think TH is focussing on aesthetics rather than quality. They don't want to be someone's first crush at 15, rather an Asian mistress who gives the girlfriend experience on holiday. It's all about celebrity lined parties, world championship endorsements and Hollywood targeted product placements. I'm actually glad that ever since the Carrera 60th anniversary, TH has taken a slight departure from milking the heritage cow.

I don't blame LVMH for trying to capitalise on the deep pockets of the new rich. The new target audience don't care about the heritage and history or how many man hours went into developing a movement and putting together a watch. The new target demography wants a watch they can wear for a night out or an instagrammed holiday. They don't want a quiet watch, but they don't want a watch that screams "come mug me" either. Hey, you have Style Editors for watch publications writing book reports about their experience with Monacos now. Enter ...... the new age TAG Heuer. A 10,000ish US$ watch is not cheap, but is also not so expensive that you want to keep protected.

Probably the age of the affordable TH is over, or possibly just that the band for affordable "swiss" mechanical watches has got elevated from 5-6000 US$ to 10,000 US$.

 

[Ara]

YG_Rulz

The new target demography wants a watch they can wear for a night out or an instagrammed holiday.

Curious what piece falls in this category?

 

[99LinkEd]

Good luck to Tag. I’ll be sitting on eBay and Chrono24 awaiting the 75%-off almost-new Tags.

Tag should just keep doing what they are doing - dominate entry luxury with a pathway up the food ladder to better made/designed models. Keep Tag fun and accessible.

 

[Mspeedster]

Ara

Curious what piece falls in this category?

The Skeleton Monaco comes to mind.

 

[Jemagloh]

Mspeedster

The Skeleton Monaco comes to mind.

I agree.

 

[Jim Dollares]

99LinkEd

Tag should just keep doing what they are doing - dominate entry luxury with a pathway up the food ladder to better made/designed models. Keep Tag fun and accessible.

But that makes no sense, the article says TAG has double digit growth thanks to increased prices. Clearly it seems to be a very wise business decision to move into the luxury space and keep increasing the prices.

 

[Jim Dollares]

abrod520

finish, attention to detail and movement technology.

I agree and watch collectors will in many cases not pay 10-20k for a TAG, but my guess is the customers TAG are targeting care nothing about those things you refer to.

 

[thingziliketoo]

They need to be very careful as they venture into this segment of the business. As quickly as those profits come, they can fall out of fashion as well.

Their cheapest products will need to start matching the high cost items in terms of fit, finish and quality. When entering this area you will always be measured against the big R. An entry Rolex OP has the same perceived quality as their Daytona. The difference in parts and movement add to the difference in end cost but both carry similar brand cache.

Like the American car manufacturers, they have a storied history to overcome. We will see how they navigate it. If they and other manufacturers keep on this trajectory of accelerated pricing, I may not have a “new watch alert” for quite some time.

 

[Mspeedster]

thingziliketoo

...I may not have a “new watch alert” for quite some time.

The way prices were rising at the start of last year ('22), I had already decided my next new watch would not be a TAG. Just too many better alternatives for the money (IMHO). Also, pre-owned or vintage is where I was looking for TAG Heuer/Heuer. Then they came out with the Panda and I couldn't resist. But now I'm back again to my previous stance. Perhaps this new strategy will garner TAG new customers, but I'm afraid it may also alienate some of us long time fans.