In a strong sign that they have confidence in the local market, late 2015 saw the appointment of Zenith’s first brand manager for Australia and with this, the brand’s appearance at what will no doubt be an expanding number of authorised dealers nationwide.
A brand with a storied movement history in particular, at Baselworld 2016 I had the opportunity to meet Zenith’s President and CEO (since July 2014) Mr Aldo Magada and to talk to him about the present and future of the brand.
Q : I’d first like to ask you about Zenith’s positioning within the LVMH Group. With Mr. Biver having repositioned and consolidated TAG’s offerings, is Zenith next up for his touch?
Since I joined the company I have had weekly meetings with him about product management and marketing; we need his help with that. What I am looking for is for him to speak more about Zenith. Today he is Mr Hublot, he will always be Mr Hublot. He is Mr TAG, but he will help boost Zenith’s communication.
Q : The luxury watch industry is in a more challenging period at the moment compared to a few years back, with numbers down and many brands worried. Do you see this as more as a market ‘correction’ or as a sign that there need to be some more fundamental changes made to how the industry has gone about the business of selling watches in recent times? Especially in terms of market reliance?
I think that in our contemporary society, in every product category, the consumer is looking for value. Prices are important, the price tag has to be at same level or under the perceived value. I think it was a mistake that we had too many products/ brands thinking we could sell at every price. Everyone speaks of Uber. Uber is about value. Everyone is happy to buy a product, even at high prices (we have a 70-80K CHF piece), but for people who can afford it, it’s about value – that they get a lot for the price (this is important).
The other thing we have to do is of course to listen to people and make sure that what are we selling is part of a great experience, a great universe. We are competing with experiences. I know friends who prefer an experience (five star trip etc to reduce stress) than to buy a chronograph. This sort of trip costs 1-2 chronographs. We are in charge of making people realise our product isn’t just a good product but it is also a real symbol of an experience.
We have a diminishing middle class – we go up or go down. The most important decrease will be the 5,000-15,000 CHF bracket because that represents people who are working, with good incomes, who can make some savings. Why spend 10k CHF on a chronograph if I don’t know if I will be employed in a year? It’s about general confidence.
Nobody wants to spend money if they don’t think they can afford to put this kind of money instead of into savings, into a watch.
Q : With the market not being as buoyant at the moment, is Zenith going to take a more cautious route and consolidate/ ‘play it safe’ or will the LVMH Group perhaps take the opportunity to be bold and invest in Zenith to create new product lines to generate some excitement during the ‘lull’ so to speak?
We have a big chance at Zenith. We have always been reasonable, we always had a competitive price for a Manufacture movement. Even with the El Primero we are lower price wise than more well known brands. Because we are still small (volume), not too big, we want to be loved by people who want to understand us. Our brand is here for a long time. It’s really a time where people understand that this brand is reassuring, offering a clear assortment of products, clear communication. People can feel, we hope they can feel, that Zenith is a product that they can place their confidence in.
Design positioning, not fashion. We don’t want to make watches where you look in two years and wonder if you were drunk. Vintage is important not because it is about nostalgia but because it is about authenticity. People need authenticity because there are too many messages per day, too many things they don’t know what is untrue.
We are against segmentation by age. We are willing to put people together. The Rolling Stones – the original fans are about 70 now. At their concert I attended I saw three generations together. We want to be trans generational. This involves understanding what ‘classic’ means e.g. classic cars.
Q : How difficult do you think it is for Zenith to look forward without looking back?
You know, that’s a good question. We are more or less a start up of 150 years. This means we have roots but we are not sleeping on what we did. It doesn’t work like this. Value has stayed the same but the way to express the value changes. We have to be careful to reinvent not just movements, not just aesthetics, but to also still speak the language people will understand at the time. Innovation is the only tradition we have.
It’s like in politics. If you don’t know the geography and the history you cannot understand the current situation. If you don’t know for e.g. the history of Australia you don’t really understand the value of Australians who are immigrants. You build up a country based on that. If you don’t know that then you probably miss a lot of richness of the country.
Q : What do you think younger customers are looking for in watches nowadays?
This is difficult to define. Let’s take an example the barber at the entrance (of the Baselworld booth). They were out of fashion when I was young, it was about being fast and getting clean. Now, young people want the barber experience, they are really enjoying it. Young people are always surprising. The Mad Men influence. The Distinguished Gentlemen Ride.
I think the consumer is looking for a meaningful product. The size of watch – people ask about this all the time. Who cares? The only unreasonable size we did was because we were offering the 5011 movement which was one of the most famous calibres, for precision competition (50mm).
Q : You have recently appointed your first brand manager for Australia, which I guess is a sign that you see great potential in the Australian market…
We were doing Australia through Singapore so you can imagine that a Singaporean visiting Australia to visit. You can maybe visit three times a year, but it’s not the way we thought we could develop a country and to give proper service, because luxury is about product and service. So we took the decision to have someone dedicated to it; to develop it and to give partners the attention they deserve. We are putting in place different things in Australia. We have someone in Australia who knows Australia. Le Locle to Australia is a bit exotic. Sam also is in Australia because we strongly believe we cannot only play the travel card; local implementation is important.
Q : You’ve been at Zenith for a reasonable period now – what has been the most unexpected thing that you’ve learned about the brand in that time?
This is difficult to say – I have had some good and less good surprises. I have been in the industry for 30 years. When I joined the company I learned that the company is less known than I thought. This has given me an opportunity to develop the strength of the brand.
The great surprise is that when you are a Manufacture you really are able to develop/ do in terms of movements incredible things, in such a short period of time. Not just an advantage but part of the DNA of the brand.
Q : What is your personal highlight of the Basel 2016 releases?
My highlight is looking at the booth, the feeling, the universe expressed. It makes a logical package. People are really seeing it. The Cafe Racer is doing well and our assortment is totally coherent.
[My thanks to Mr Aldo Magada for his time and to Sam Kan of Zenith Australia for the opportunity to interview Mr Magada]