The total U.S. wholesale watch universe grew 13% to $8.8 billion in 2018, driven by a 54% increase in dollar sales of smartwatches, according to the December 2018 Watch Total Market Report from The NPD Group. Traditional watches accounted for 56% of annual dollar sales, but smartwatches outsold them in Q4 2018, accounting for 55 percent of total watch sales during the final three months of the year.
“We have entered a new watch universe where smart options have become as significant as the traditional,” says Reginald Brack, watches and luxury industry analyst, The NPD Group. “Smartwatches are today’s growth engine, but there is still a place for traditional watches among consumers and in the marketplace.”
While three out of the top five watch brands offer only smartwatches within their assortment, the other two are traditional brands that play at the upper end of the market. Despite overall sales declines in traditional watch channels, the average manufacturer suggested retail price (MSRP) of traditional watches being sold increased in 2018. The most stable price point was at the high end of the market, among watches priced $25,000 and up.
Gender-neutral trends are also gaining popularity among watch consumers. Gender-specific products still dominate the traditional watch market, but smartwatches are bringing unisex option into the mix in a new way. Sales of watches without a specific gender designation were the only traditional watch segment to grow in 2018, up 35% in total MSRP dollar sales.
“Traditional brands who embrace the changing watch market, taking cues from consumers as well as products in the smartwatch segment, will be able to navigate the new landscape,” says Brack. “Both faces of the watch industry will benefit from creating a brand experience and building relationships with the consumer.”