The Next Generation Is Not the Problem

Either watch-industry executives have been reading Pointless Complication, or the same evidence has finally become so obvious it can't be avoided. Back in June, I pondered whether mechanical watches risked losing theircultural relevanceand suggested that the supposed market recovery might simply be a new clearing level. Last week at Geneva Watch Days, industry execs began talking publicly about younger buyers, shrinking volumes, credible Asian competition and what Georges Kern called the 'new normal'. The discussion of Generation Z is particularly interesting. They have less money and less inherited loyalty to familiar Swiss names, but they are motivated by emotional excitement and discovery, and are comfortable buying pre-owned. Honestly, Gen Z sounds like the dream watch customer. Surely this is an extraordinary opportunity for an industry that excels at storytelling and happens to make objects capable of lasting generations. Buy this. It can carry the history of its maker or the history of the person who owned it before. Its practical inadequacy is part of its charm and its point. This is familiar territory for Switzerland. The industry survived functional obsolescence by pivoting the mechanical watch into an emotional object. Jean-Christophe Babin told Bloomberg last week that younger customers place less weight on status and established loyalty. Their interest is driven more by emotion and the pleasure of discovery. This should be encouraging. Swiss watchmaking possesses an enormous store of technical history, industrial archaeology, forgotten design and human stories. The mistake is to assume that someone attracted to stories is gullible, because younger buyers have grown up surrounded by marketing and equipped to investigate it. The romance of the manufacture now arrives via several open browser tabs. They can identify the movement, check the transaction price, previous references, service costs and likely resale value. They can discover that the limited edition is followed by another limited edition six weeks later, or that a watch virtually identical became a series piece. They can find out who else uses the supposedly exclusive components. Heritage still matters. It is no longer opaque to due diligence. This does not make younger buyers resistant to luxury. It makes them unusually literate in the machinery used to construct it. A good story may still make a watch desirable, but the product must survive interrogation. The market will deliver and price its own verdict. There is also far more to discover than the Swiss brands presented by the nearest authorised dealer. A buyer can move from an obscure vintage watch to a contemporary Asian one without regarding either as a lesser stage on the way to Switzerland. Online communities reward finding the interesting object before wider opinion has approved it. Discovery changes the hierarchy. The novel and unfamiliar name can be an advantage. This is one reason the industry's sudden concern about credible Asian competition matters.Babin acknowledgedthat the quality of some Chinese movements is now comparable with standard ETA or Sellita calibres. Oliver Müller pointed to the strength of Japanese brands that have not spent every year trying to move themselves into a higher price category. Swiss Made still has cachet, but it no longer settles the argument. For a buyer who values discovery, choosing the less familiar maker may be more satisfying than buying the accepted right answer sanctioned by previous generations. That is not a rejection of watch culture, but watch culture behaving exactly as enthusiast culture normally behaves. The secondary market makes the contradiction clearer. Younger buyers are unusually comfortable purchasing pre-owned watches; somewhat out of necessity. TheDeloitte Swiss Watch Industry Studyfound that 40 per cent of millennial and Gen Z respondents were likely to buy one during the following year. It is tempting to explain this entirely through money. Younger people generally have accumulated less wealth, while Swiss retail prices have risen well beyond the comfortable reach of many salaries. Used watches provide access. It offers a wider field of discovery and prices established by actual transactions and without requiring participation in boutique allocation theatre. And the watch may arrive with a bit of human history rather than a campaign concept. For the curious Gen-Z buyer, this can be a better luxury experience. It can also be a better education, encouraging the customer to learn references, condition, service history and price discipline. The secondary market teaches the difference between price and value before the manufacturer has an opportunity to confuse them. From the perspective of watch culture, this could prove to be excellent. A young buyer can own several watches, follow auctions, trade regularly and become deeply knowledgeable. From the perspective of a Swiss factory, the position is less satisfactory. None of those purchases necessarily creates demand for current production. The money circulates between existing owners and dealers. The manufacturer may receive a service eventually. This is the distinction missing from much of the optimistic discussion about younger engagement. Generation Z may be an excellent customer for watches without being an excellent customer for new Swiss watches. Interest is not the same as conversion into the behaviour on which the present industrial structure depends. The Swiss industry needs enough customers buying newly manufactured watches at prices sufficient to sustain brands beyond the handful selling almost entirely to the wealthy. It also needs younger buyers to return rather than circulate indefinitely within pre-owned. Switzerland exported14.6 million watches in 2025, compared with 25.4 million in 2016. The strategy of raising value while surrendering volume has protected the strongest companies, but made recovering volume considerably harder. The upper end can remain successful with a small number of committed customers, while the middle market requires a larger population willing to buy repeatedly. It cannot solve weak demand by copying the scarcity language of brands that were genuinely scarce before the pandemic. It is comfortable to say that younger customers have changed. It is less comfortable to ask whether the product, price, route to purchase and ownership proposition still make sense for them. Perhaps Generation Z has not failed to understand Swiss watches. Perhaps it understands them rather well. The younger enthusiast sees no contradiction in wearing a smartwatch during exercise and a mechanical watch later. The same person can also move between vintage and independent makers without treating the traditional hierarchy as a map. The industry continues to look for a neat progression from attainable Swiss watch to more expensive Swiss watch. The younger customer might be constructing a collection sideways. That creates an awkward strategic problem. How does a brand turn a second owner into a future buyer of something new? Can an attainable new watch compete with a nearly new example from a more prestigious name? The answers will require more than putting younger ambassadors in advertising. A credible entry watch must feel worth its price. Second owners must be treated as prospective customers rather than cheap occupants. New watches need to offer something beyond the frisson of being unused. The industry needs to measure whether younger engagement creates demand for new production. Platform activity and social attention cannot answer that question. Kern's warning that present conditions may be the new normal echoed the conclusion I reached in July. Secondary prices had allegedly become more stable, but routine discounts and plentiful availability remained. The strongest references were protected while much of the market operated at a lower clearing level. If the market has found a lower clearing level, the next question is what happens to the prices established during the previous one. This is where the discussion about Generation Z stops being sociology and becomes economics. Consider a hypothetical watch offered at RRP CHF 7,000, available new for CHF 5,600 and nearly new for CHF 4,300, with the trade somewhere below CHF 4,000. The manufacturer may insist that its price remains CHF 7,000. The customer can see four prices and knows which one the market believes. The price has already been cut. It has merely been cut by the retailer, the first owner, the grey dealer and everybody else required to make the transaction happen. The manufacturer retains the list price and much of the margin, while the rest of the system absorbs the correction. This does not mean every Swiss watch is overpriced. The strongest references remain difficult to buy and some independents cannot make enough watches to satisfy demand. Nor is there a reliable public measure of industry-wide sell-through. Export figures record watches crossing the Swiss border, not watches leaving a retailer on a customer's wrist. There is nevertheless a list-price credibility problem across parts of the middle market. Persistent discounting, plentiful stock, immediate depreciation and routine grey-market availability suggest that the official price is no longer performing one of its most important functions. It is not persuading the customer that buying new is sensible. That matters particularly for the younger buyer described above. Someone able to inspect transaction prices in seconds is unlikely to regard a 20% discount as a generous favour. It is evidence that the opening number was fictional. A watch priced at the limit of affordability must carry more conviction, not less. For an ordinary product, weaker demand produces a lower price. Luxury makes this awkward. A visible reduction can anger existing owners, expose retailers who bought stock at the old wholesale price, weaken residual values and diminish the aura that the price was intended to create. Yet preserving an implausible price has a cost too. It teaches customers to wait, negotiate, buy the same watch second-hand or walk away. Walking prices back therefore need not begin with a red pen across the catalogue. The least dramatic method is to stop increasing them. Hold nominal prices while wages and general inflation do the work. A price frozen for several years becomes lower in real terms without announcing that yesterday's customer paid too much. The industry also has to deal with the watches already made. Production and sell-in need to follow genuine consumer demand, rather than the requirements of factory utilisation or wholesale targets. Unsold stock can be bought back, held, dismantled or moved through controlled channels. This has been done before, a few times, when some brands repurchased watches from retailers, accepting an immediate financial cost to protect the market and the brands. It was painful precisely because the correction had been postponed, but it also hints at the real cost of the goods. Another route is to put more watch behind the same number. Better movement specification, a bracelet and clasp that belong at the price, longer ownership support and sensible service costs can restore value without a formal reduction. This only works when the improvements are tangible. A new dial colour and an anniversary story cannot carry another increase indefinitely. Where the existing reference has become inseparable from an unrealistic price, it may be better to retire it and introduce a replacement at a lower level. The new watch has to be genuinely different in movement, material, construction or method of manufacture. Otherwise the customer will recognise a disguised reduction and the owner of the old model will recognise it too. Separate marques can also rebuild an entry point without dragging an established name down through its own price ladder. My review of Breitling's revival ofGallet(where we explore some of the subtleties not covered elsewhere) may prove interesting for exactly this reason. It creates room to address a customer for whom the main brand has become financially remote. The danger is producing a cheaper imitation whose principal message is that the real object remains elsewhere. Eventually some brands may need to reduce list prices directly. If so, the credible version is selective and accompanied by protection for retailers holding stock. It should look like the correction of a specific mistake, not a sale. Luxury customers can forgive an error. They are less forgiving of discovering that the official price was a negotiating position. None of these measures works without supply discipline. Clearing inventory while continuing to manufacture ahead of demand simply restarts the problem. Nor can better storytelling repair a price structure on its own. The story may explain why a good watch is important, but it cannot make the wrong number right. GWD 26 added another dimension. The new normal may include an active watch culture that no longer supports the old Swiss business model in the same way. Enthusiasm can grow while new-watch volumes fall. More people can discuss watches while sales become concentrated among fewer manufacturers. A lively secondary market can recruit collectors while competing with the factories that need to supply them. Asian makers can gain cultural ground without replacing Switzerland at the top. None of this means Generation Z is lost to watches. Quite the opposite. Young buyers appear curious and willing to spend when the object makes sense. They are using the market they have been given: high Swiss list prices, abundant pre-owned supply, credible Asian alternatives and immediate access to information. The Swiss watch industry does not need to teach them that a watch can carry emotion. They already know. It needs to give them a reason to buy the next one new. Subscriber note© 2026 Pointless Complication. This is a free subscriber article. Please cite, discuss and share the link, copy, forward or circulate the full text or PDFs. Reader support is what keeps this publication independent. Pointless Complication is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.