Generation Z’s growing interest in luxury mechanical watches is keeping the pre-owned sector humming at a time of falling pre-owned prices and falling Swiss watch export volumes, according to analysts at sector.

Research shows that “Zoomers” – those born between the late 1990s and early 2010s – crave luxury watches and build fast-growing offline communities around them.

A YouGov survey commissioned by online marketplace Chrono24 found that 20% of people aged 18 to 24 were “likely or very likely” to buy a luxury watch in the next 12 months, compared to an average of 11% for all age groups. .

They also spend more. A survey for Richemont-owned second-hand retailer Watchfinder – conducted by pollsters Opinium – found that more than 10 per cent of Gen Z own a luxury watch valued between £1,000 and £7,500, more than the market demographic average of 8 percent. hundred.

But is this explosion of interest in expensive watches translating into sales of new watches? Not according to the UK’s largest luxury watch retailer.

“Generation Z is interested, but they don’t yet have the financing for what is still a luxury item,” says Brian Duffy, group managing director of Watches of Switzerland, which recently published annual sales figures for its retail operations in the United Kingdom and the United States. £1.54 billion, up 2 per cent year on year. “But the interest is definitely younger. During this period of excess demand (post-Covid), a lot of that demand was driven by a younger audience, which we believe is permanent.

Instead, younger buyers are taking advantage of the lower prices and instant access available in the second-hand market. Ben Staniforth, Watchfinder’s UK country director, estimates that 80% of Gen Zers buy their first luxury watch from second-hand sellers. “They are motivated by a blend of financial knowledge, a desire for unique and discontinued styles, and a commitment to sustainability,” he says.

Confidence helps too. End of 2022, Rolex has officially entered the aftermarket with its Certified Pre-Owned program, available through authorized retailers. Other high-end brands have done the same.

Christy Davis, co-founder of a UK-based watch trading platform Subdial and the Bloomberg real estate. “Previously, people put money in (real estate) deposits, but a watch is a cheaper investment,” he says. “You need $10,000, rather than $110,000.”

As a result, experts say the second-hand sector is growing, fueled by a younger generation of buyers. Charles Tian, ​​28, founder of the Texas-based price tracking firm WatchCharts, says his company valued the secondary market for luxury watches at $27 billion last year, about half of the size of the primary market, and forecast growth of between 10 and 12 percent per year for the next decade. “It’s a combination of an increased desire for instant gratification and a sense of desperation for the future,” Tian says of the appeal of high-end watches for Gen Z. real estate outpaces income growth. They feel that the more time passes, the more they fall behind.

This new generation of buyers could not have come at a better time for the luxury watch industry. After record years in 2022 and 2023, Swiss watch exports have reversed course. The Federation of the Swiss Watch Industry reported last month that the value of exports fell 12.4 percent in September compared to the same month last year. This indicates an acceleration of a decline first seen in late summer 2023, as shoppers tightened their belts or shifted their spending toward experiences.

Claudia D’Arpizio, a partner at consultancy Bain & Company and author of Bain’s annual luxury goods market study, says these record years owe a lot to younger watch buyers. “Growth has been driven by the younger generation discovering watches and watchmakers’ proactive approach to targeting them,” she says, adding that female buyers have also contributed significantly.

Working with Generation Z has become an imperative for the industry. “Even though they are not the main target from a purchasing or volume perspective, they are the main target for communication and storytelling because they have a huge influence on other generations,” says D’Arpizio. “You can become an object of desire for your customers and attract their attention even if they can’t afford it now. »

Brands that fail to produce something new face steeper drops in demand, particularly from Generation Z. “For these brands, secondary market prices are falling, diminishing their appeal as investment assets,” says D’Arpizio.

What makes Gen Z so powerful? “Gen Z are by far the smartest consumers,” says Austen Chu, 27, founder of Hong Kong-based online watch trading platform Wristcheck. “This is the first generation to grow up with a (smart) phone. Previous generations only had access to their local market, while they had access to the world.”

But large swathes of the watch industry risk being left behind, with many sticking to outmoded marketing schemes focused on craftsmanship and past glories. “If they only talk about heritage, people will get bored,” says Scarlett Baker, a freelance writer specializing in watches and fashion. “How many people want to know more about the Vallée de Joux (where many Swiss watch companies are based)? They want a unique story.

One of the few watch companies to have seized the opportunity, according to Chu and Baker, is Audemars Piguet, which has collaborated with a long list of high-profile figures in popular culture since it first created a watch for hip-hop artist. Jay-Z in 2005. “As digital natives, (Gen Z’s) comfort lies in digital platforms like TikTok, Instagram, Snapchat and YouTube,” says CEO Ilaria Resta.

Tag Heuer followed suit. Following the success of his collaboration with actor Ryan Gosling in the film barbie last year, later this month his watches will appear on the wrist of Gabriel Leone who plays Ayrton Senna in a new Netflix series about the Brazilian racing driver and watch brand ambassador.

“Kids will grow up knowing that Ryan Gosling owned three Tag Heuers,” says Baker, referring to a scene from barbie where the actor wears three watches from the Swiss company at the same time.

Luxury watches are also proving an unlikely staple for Gen Z communities and in-person gatherings. “For Gen Z, walking into a watch store is intimidating,” says Chu of Wristcheck. “I’ve been called a delivery boy, and that’s something we want to change. It doesn’t matter if you’re wearing shorts and flip flops or a suit, we’ll treat you the same. Chu claims that 70 percent of its trading platform’s clients are under 35 years old.

Gen Z’s interest in luxury mechanical watches may not have been anticipated in 2015, when the Apple Watch launched. But Chu says smartwatches have played a catalytic role, even as Swiss watch export volumes have roughly halved over the past decade. “The Apple Watch made my generation aware of the wrist,” he suggests.

D’Arpizio observed the same thing. “Everyone has a wearable, but luxury watches are seen as an investment, something that lasts, something that keeps memories, that has a different badge value than the previous generation. Previously, it was a status symbol.