TAG Heuer’s CEO on “In-House Digital Expertise” and the Brand-New Connected Calibre E4
Frédéric Arnault explains everything that also makes TAG Heuer a Tech Company…
The “TAG” in TAG Heuer is an acronym for Techniques d’Avant-Garde. And with this in mind, the brand has always been at the forefront of innovation, whether as one of the first watch brands to have an automatic chronograph or as one of the first to create a luxury connected watch. For several years now, TAG Heuer has embraced technology and has even developed its own in-house expertise in this field. The launch of the 4th-generation TAG Heuer Connected Watch, the new Calibre E4, was the perfect time to talk digital horology… and many other things.
Xavier Markl, MONOCHROME – The watch industry has bounced back from the pandemic. What is your focus for TAG Heuer in this period?
Frédéric Arnault, CEO of TAG Heuer – The last two years have been very intense. Like our entire industry, we have been impacted by the pandemic, but things seem to be moving in the right direction, and we feel this very positive energy when it comes to our watches. We had a very good performance in 2021 that we want to continue in 2022 and beyond.
So the outlook for TAG Heuer is very encouraging: our product plan is solid and ambitious, our retail traffic has picked up, and we have accelerated our digital transformation, which enables us to cover 95% of our markets in e-commerce. And thanks to this digital world, we were able to find new and innovative ways to communicate with our clients and fans and implement new ways of working that have only made us stronger – even during these challenging times.
We have embarked on very ambitious projects in terms of the company’s digital transformation, the restructuring of our distribution network, and in-depth work to clarify our collections.
These are very important challenges, which are carried out over the long term, but we are already seeing the results, particularly through the success of our latest collections. This is very satisfying for me and for all the teams at TAG Heuer. We have strong ambitions for TAG Heuer and believe that the brand has enormous potential.
When it comes more concretely to 2022, we have successfully started this year with the launch of great timepieces such as the Aquaracer Professional 200 with a very impressive campaign as well the 60th anniversary of the Autavia collection. And we are very proud to introduce the new generation of the Connected Watch. We will continue on this avant-garde path and tell unprecedented stories about innovation in the upcoming months. A lot of new announcements and product stories are in the pipeline – but for now, I, unfortunately, can’t tell you more.
TAG Heuer joined forces with Porsche about a year ago with the release of a first collaboration, a Carrera Chronograph. What can we expect next from this partnership?
Stay tuned as we are launching something very exciting in collaboration with Porsche very soon. But I won’t spoil the surprise just yet…
TAG Heuer was the first luxury watch brand to embrace connected technology. How have you shaped the department in charge of the project to create relevant products and keep up with innovation?
TAG Heuer is recognized for its constant innovation and 160 years of avant-garde. This is in our DNA, and we will continue to push the limits in this field. Therefore, launching a connected watch was completely aligned with who we are. While we used to rely entirely on outside partners for the technology of the first two generations, we have since assembled our own in-house digital expertise to be able to offer our customers an experience that truly expresses our brand values and identity. Meanwhile, over 60 of the most talented digital minds work in-house on our Connected Watch. These kinds of resources are unparalleled within the luxury watch industry and allow for unique innovation and development potential for TAG Heuer.
Today I am proud that TAG Heuer also functions as a TECH company.
Of course, mechanical watches still represent a major part of our business, but we have great ambitions for this connected segment of product. The strength of this category is that it brings new customers to the brand and to our mechanical watches. We are reaching new audiences who, once in our universe, are then also interested in traditional watches. And our savoir-faire in traditional watchmaking plays a crucial part in the development of the connected as well, especially in the design. We have succeeded in developing a shared vision for both activities.
What are the main novelties for the latest generation of TAG Heuer Connected Calibre E4s you are unveiling today?
The first big evolution is the fact that with this new 4th generation, we don’t have one but two Connected Watches. So for the TAG Heuer Connected Calibre E4, the major novelty is the introduction of a new model in 42mm for smaller wrists. This new watch offers a very sophisticated and elegant look, including a thinner case and bezel that will appeal to a new audience. The 45mm has also been completely redesigned for a more ergonomic and sporting design. Compared to the previous generation, the design has significantly changed, making it easier to use for people on the go and is more intuitive. For example, for the 45mm version the crown has a large diameter, so there’s lots of room for a finger to access and adjust the crown. The pushers have a mechanical feel, highlighting TAG Heuer’s 160 years of heritage in making high-end mechanical watches.
We have also worked on new watch faces, which are a very key point of our expertise and our engineers developed a new screen that offers industry-leading quality and contrast, particularly outdoors, where watch faces and notifications and sports metrics will remain visible even in strong sunlight, thanks to a strong contrast ratio. We have also worked out a new sports ecosystem including a very innovative fitness program. Finally, we have improved the connectivity and battery life of the watch, which is now 30% longer on the new 45mm model compared to the previous generation. This new generation is really a strong statement for TAG Heuer both in terms of design and technology! With these two new and very different Connected watches, our goal is to bring a new generation of TAG Heuer Connected to a wider range of customers.
The smartwatch or connected watch market is highly competitive. As a traditional watch brand, how can you find your place and deliver this competitively with the right answers?
In 2015, the Connected category was just emerging, and there was little belief in the industry that connected watches had any real future. But we had our own vision – a vision that we live in a continuously more interconnected world – that consumers will want to be online all the time and get data to their wrists to manage their business, their leisure but also all sports activities – and the success since has proven us right.
We know customers of the Connected are driven by three key differentiators that we offer on the market, including refinement, and in particular the elegance associated with Swiss luxury watchmaking.
Activity and Sports, the Connected customers are driven by performance and committed to a healthy and fit lifestyle. And technology, as they are early adopters and tech-enthusiasts. With this new TAG Heuer Connected generation, we will also reach a new audience, thanks to a more feminine version.
So I believe that the brand was right to invest in smartwatches as early as 2015 as the digital lifestyle is driving such a fast-growing market. We see that as an opportunity for incremental business and the TAG Heuer Connected has been a key lever in opening the brand up to new audiences and strengthening our offering. We will therefore continue to build out this line and innovate as the technology progresses. For mechanical watches and for connected ones, our focus remains on creating beautiful creative and innovative timepieces for our customers that express our core values and will stand the test of time.
If we move to mechanical watches, what are your focal points in research and development? What type of innovations can we expect from TAG Heuer?
At TAG Heuer, we thrive on innovation and pushing the boundaries, so we are not afraid to explore new technologies and techniques if they bring value to our products and customers. We actually have an entire department dedicated to innovation, the TAG Heuer Institute, which is focused on these opportunities. In parallel, we strongly believe in the human factor to bring creativity, emotion, even passion to a task. For us, technology and craftsmanship enhance each other. We are, of course, focused on materials and are looking to building and inventing our custom look and feel. We are interested in cases, bezels, dials, but we also invest a lot in movement design and innovation. The Isograph carbon hairspring available in our TAG Heuer Carrera H02T Nanograph is, for instance, a true wonder. We have some of the most impressive scientific minds in the world working on the potential we don’t even realize in fields such as solid physics, compliant mechanics and nanostructure materials, so I’m very excited to see what the future holds. We also recently developed a revolutionary movement for the Only Watch Auction. The movement of the TAG Heuer Only Watch Carbon Monaco is the first and only Heuer 02 calibre which features our proprietary carbon hairspring.
We have a strategy of innovation – we want crazy innovations. That’s going to have an impact on the core product we’re launching in volume. We’re working on reliability and silent innovation that the customer doesn’t always see, but that has a lot of impact. But not just that, we’re also working on innovation that’s more visible. You’ve not seen anything from the Institute at LVMH Watch Week, but at Watches & Wonders in Geneva, we will reveal some groundbreaking innovations.
What is on your wrist on a daily basis? Mechanical or connected?
I actually wear both, it depends on the day I am having at the office or whether I am going to an event or if I’m planning to do sports. Today it is the new TAG Heuer Connected Calibre E4!
Distribution plays a pivotal role in the industry. What are your priorities to shape the brand’s presence from an omnichannel perspective? In what region do you plan to develop your presence?
In terms of distribution strategy, we will rebalance the distribution between multi-brand retailers and our own stores, which will increase. We also inaugurated a new shop concept introduced for the first time last September in Zurich. I am in favour of a harmonious mix between the two types of distribution, especially as some retailers are amazing partners.
Finally, TAG Heuer has launched its new website. All the watches online automatically set the time to the visitor’s time zone. Online interactivity allows a stronger bond. Digital is a relational channel that we create with consumers while helping our retailers by informing or referring them to their stores.
Regarding our presence in the markets, we are very strong in certain regions, like for example in the US, UK, Japan, Australia or Korea – but with a lot of room for progress in others like China – so this is only the beginning. Overall, our E-commerce experienced a double growth (x2) in 2021 vs 2020, + 700 % when it comes to 2019! There are no longer any barriers to buying luxury watches online. As a luxury brand, we believe in providing the best online experience to our customers. We are innovating a lot on all of our services, with, for example, a new way of presenting our products in 3D.
The watch industry fair landscape has changed significantly over the past years. TAG Heuer will be exhibiting for the first time at Watches & Wonders in a few weeks. In what respect are such events important for the industry, and what will they bring to TAG Heuer?
These positive results and this positive journey could not have been achieved without the efficiency and exceptional ability of our teams to adapt to an ever-evolving and challenging environment and always go above and beyond to fulfil the dreams of our customers. Our target is to offer our young customers their first watch but also the other customers one of a lifetime. And thanks to the digital world recently, we were able to find new and innovative ways to communicate with our clients and fans and implement new ways of working that have only made us stronger – even during these challenging times.
Having said that, we need to be where our customers are, and I am a big believer in a good balance of things. So we are definitely excited to be part of Watches & Wonders and hopefully get together again with many industry experts, our partners and media representatives to continue our avant-garde journey. The one important point that is a constant parameter for us is quality throughout the entire range. Growth is sustainable only if you can rely on quality products.
For more details about the brand and the new TAG Heuer Connected Calibre E4, please visit www.tagheuer.com.
The store in Zurich is only a unseless showroom only without service. If you want to quickly check whether a 6000 euro watch is still waterproof, you have already reached the end of the service possibilities. You have to leave the watch there. In the multi-brand store that also sells Tissot and Swatch, it was done in 5 minutes. After the purchase is just before the purchase.
The Autavia is a beaut! The Connected series sure is nice as well, but it’s already yesterday’s tech today… let alone in a year from now. With mechanical watches you might speculate it will hold its price well or even go up, with smartwatches, it’s all going downhill the moment it’s bought. But I never opposed having options and they wouldn’t make them, if they couldn’t find people to buy ’em, so hey, applause.
I’m not sure that I understand the market for connected luxury watches. In order to truly benefit from the functionality of a connected watch, you need to wear it 24/7. So if you want this to be your only luxury watch, then go for it.
Also, the technology will remain relevant for a year or two. 5 years from now? The technology will no longer be supported and you’ll be stuck with a $1,600 paper weight.