Patek Philippe’s unique business model – an exclusive interview with President Thierry Stern
Thierry Stern, President of Swiss luxury watchmaker Patek Philippe on the company’s unique business model and the secrets behind the brand’s continued success.
Patek Philippe has long established itself in a league of its own. What are the key elements which define the DNA of the brand? And what is the secret to this uninterrupted consistency in product offering, marketing communications, creativity etc?
Patek Philippe is unique for many reasons. We are a family owned business, which has been in unbroken production since 1839, when the company was founded. In addition, with every watch we have ever produced being individually numbered and registered in our archives, it also has genuine authenticity. Our history, that combines innovation and tradition, is also another reason that makes our company stand out in the marketplace.
If you had to compare Patek with a luxury fashion brand, which would that be?
Each company has its own history and heritage, so it is difficult to compare. The main difference is that we are not in the world of fashion and not in the world of luxury, a word that applies to many types of industries and products including mass production, we are in the world of exclusivity, niche market, the world of timelessness and lasting value, so as said it cannot be compared.
What is your strategic approach to education and awareness especially in emerging markets where wealthy consumers may buy a particular watch because of its easily recognizable design, to thus be able to show off, however, neither being aware nor appreciating the craftmanship, heritage, quality, durability and precision.
Patek Philippe is a symbol of watchmaking tradition with a unique heritage. These are characteristics that our customers are looking for when they buy a Patek Philippe timepiece no matter where they come from. They are not looking for a watch to show off or for social status, but they want to wear a watch that reflects their passion for watchmaking, a combination of traditional skills with precision of the watch. In this view our communication is rich content led as our customers are always looking for information linked to our product the company and our history, this is also the reason why we do not do any celebrity endorsement, our clients buy our watches for themselves as a personal well thought choice.
Last year you inaugurated a Maison store in Shanghai, in an unusual location – remote from traditional luxury shopping areas. Is this a single project meant as a statement or you plan to replicate this in other countries?
The main purpose of the Maison Patek Philippe in Shanghai is to reduce the geographical distance between Europe and China and create a new Patek Philippe home outside Geneva. Regarding plans to replicate the concept in other countries, for the time being there is no plan to do so, as the market situation in China is different from other long established markets, in China our present primarily aim is to inform, show our collections and service our watches.
How important is the auction market for you as a measure of desirability of the brand?
A Patek Philippe timepiece has an extraordinary amount of know-how and work behind it. Therefore, our watches retain their value or increase it over the years and some models reach record sums at auctions. We think these records are a recognition of the effort and passion we all have at Patek Philippe when creating, designing and producing a watch. Today, more than ever, luxury sectors must interact to be able to provide a 360 degree luxury lifestyle experience.
What would be the profile of the Patek most loyal consumer? What would he/she wear? Where would he/she spend her holiday etc?
First of all our best customers are our established customers, indeed most of our customers are repeat clients, we are often asked about their profile and there is no specific profile type of Patek Philippe customers, what they have in common is their shared passion for the watches they choose to purchase, they are mostly entrepreneurs, achievers in life, they appreciate quality and aesthetics in all domains, and they are cultured, well informed and well travelled.
Earlier this year you launched a distinct website dedicated to women. Is this the year of ladies watches?
This year at Baselworld we presented over 40 new models and half of the introduced watches were ladies watches. Traditionally the men’s versus ladies split was 70% men’s watches and 30% ladies watches, now we are at 65% men’s and 35% ladies’ watches. So, we are aware that ladies, in recent years, are showing an equal interest for the inside and the outside of the watches and we are fulfilling the interest not only in terms of number of watches produced but also producing watches with complications.
What is your view of online sales of luxury watches and also about the grey market?
Patek Philippe is not active in e-commerce at all and we have no plans to do so for the time being. We continue nurturing personal relationships with customers and the retailers network, which are often family-owned businesses like Patek Philippe who share the same values as our brand. We are aware that there are some unscrupulous grey market traders and to deal with these individuals is very risky for an end consumer. We, therefore, recommend only dealing with our worldwide authorised retailer network.