There aren’t too many independent watchmakers left in Geneva, even fewer that remain in the hands or management of the original family.
With the recent appointment of Elie Bernheim as CEO of Raymond Weil, the Swiss brand enters its third reign of family management. Elie succeeds his father, Olivier Bernheim, who has served as CEO since 1996.
On the 30th anniversary of the brand, Pierre and Elie Bernheim – Raymond Weil’s two grandsons – joined the company. Willing to add their own vision and know-how, they focused on the development of contemporary and technologically evolved collections that were to become huge successes.
Elie joined in 2006, shortly after his graduation from Lausanne’s famed Hospitality Management School. Proficient in watchmaking, marketing and business management, he was most recently charged with developing and enhancing the global strategy of Raymond Weil.
Less than one decade since joining Raymond Weil, Elie will lead the brand further into a watchmaking industry ripe with the promise of new markets, faced with the challenges of operating in a heavily saturated and increasingly consolidated space.
Our interview with the young CEO about his plans for the future …
“ I think that luxury can, or has to be, accessible in 2014 and especially 2015”
How do you feel about the concept luxury in 2014 and into 2015?
I would say that the concept of luxury for 2014 is very simple, because luxury can be very simple. In our eyes, during this very difficult period of time – I am talking about the economy – I think that luxury can, or has to be, accessible.
That’s the reason why, for example, we have this year launched a very important collection at a very accessible price point. The Toccata Collection starts from 700 Swiss Francs to 1000 Swiss Francs. It’s an elegant, classic piece with a very aggressive price.
That’s, for me, the concept of luxury for 2014 which as predicted, is a complicated year – especially with political events impacting the global economy. It shouldn’t be necessary expensive. It has to be nice, elegant, maybe a little bit classic, and perhaps more classical than before. This collection is very elegant, very refined – we are far from fashion.
Here we are reaching and speaking to people who want to approach watch making with no power and this is what we propose at an accessible price. It’s a perfect mix of elegance, aesthetic and cost, which is our brand positioning, and perfectly suited to progress into 2015.
“ It’s a perfect mix of elegance, aesthetic and cost, which is our brand positioning ”
As wealth centers shift and interest in timepieces becomes more international, how do you manage various interpretations of luxury and its aesthetic?
That’s the real challenge for every brand. I consider this the most important thing for a brand like Raymond Weil is to keep a certain consistency in our strategy and not losing focus by developing product in order to seduce or attract a certain niche of clientele in Russia or in Kazakhstan. We need to follow our strategy of development.
We have, as I told you before, important market share from a price around $1,000 to $3,000 – and this price point is where we need to be. In order to be in this position, we cannot be so extravagant and for me, this has been one of the key successes within our brand.
Even if we cannot satisfy every demand, it would be a mistake for us to bow to the desires of consumers. Yes, we need to take in to consideration the different needs and expectations in terms of credibility, but this is better managed through distribution.
Our Asian clientele for example, taking the example of automatic watches for ladies, we will tend to sell more black dials, gold pieces. Whereas in the U.S. for ladies, they tend to buy mother-of-pearl dials, and only quartz products. So it’s important to have that product variation to satisfy global demand, but again, within our brand vision and price point.
Are there particular geographical markets that you’re noticing the strongest growth at the moment?
For most watchmakers the Chinese market has been the target and I will not tell you that this was not the case at Raymond Weil also. But now, there is a decline that we need to analyse and better understand to try and give a second burst of energy to build the brand presence in China.
So definitely the Chinese market is the number one target market for everyone because of its huge potential. As I told you before, I’m traveling a lot of the time in China, everywhere. And you have definitely the feeling that the sky has no limits because the market is so wide, so big, and there are a lot of things we can do in order to build our brand visibility and so on.
“ In the U.S. market we have, in our price segment, around 12 to 15% market share ”
And what about future opportunities? Many brands are talking about Brazil or Africa for example …
It’s really difficult to define which are the coming potential markets. I remember a discussion I had with my father six years ago, when he came back from a trip in India and he said, “India is the market of the future. You know the population is big, they really want to change their way of living.”
And after six years nothing really happened, nothing significant. We opened boutiques, we have now six boutiques in India, but the mentality, and the culture of watchmaking has not really arrived to properly drive the business. So we need certainly a long period of time to get return from this current investment.
That’s fine, we have no problem with it, but it takes a lot of time and when you talk about Brazil it’s the same. The import taxes are just so high that it’s a very difficult market for brands to develop. So on our side, our strategy – and this is the case for a family independent company as we are – is to be focused on our key markets and develop our share.
The U.S. market is our number one, where we have, in our price segment, around 12 to 15% market share. I want to have more. I know that if I am spending my financial resources on this market I will get return on this investment, because we have brand visibility, we have brand legitimacy.
It’s currently the most important thing for me, to have this certain return and then in the future, invest in other markets that will hopefully be more mature in terms of watchmaking.
“ I will never do sports marketing because we are the watch brand in the music world ”
What do you feel defines your marketing strategy?
Our marketing strategy is, of course, the key part of our brand. We need to be focused on something. We cannot be everywhere. I don’t like to scatter my resources in different fields. We are well known in the music field, since day one, we have invested in massively in terms of communication, sponsorship and partnership around the music world.
And it is definitely my line, my strategy for the next coming years. I will never do something in the sport segment or yachting because we are the watch brand in the music world. I need consistency, I need continuity, I need coherence, and I need to be strict on this to succeed.
And how are you using social and digital tools within your campaigns?
Every day, all the time. I am one of the biggest fans of digital channels. I don’t think that it is necessarily a new channel of communication, but I definitely think it’s the future of the communications.
If you look at my split of marketing budget, the digital component is now above 30% of my global marketing budget, which is quite a lot if you compare this present age versus two to five years ago when it was only 10%.
Facebook, Twitter and all the blogs out there important nowadays in order to convey the message of the brand, in order to build your community around the brand. We are regularly updating our website and always trying to make it much more user friendly.
“ The digital component is now above 30% of my global marketing budget ”
And which channels would you say are the most effective to reach people that are buying your products?
I think that digital is important, but what we realized the last 6-12 months is that developing a partnership with an important newspaper, magazine with a full package including the digital, the newspaper and so on, is definitely the way for us to attract and catch the end consumer. Where we have a 360-degree approach with one partner.
Again, the idea for us is to be focused on few different channels of communication and not to scatter our resources in different ways. Forgetting about print is not, for us, a good solution because we had partnerships that we wanted to maintain.
It’s much more they had to update and they had to develop the digital side so that we can do a proper and correct Omni channel media mix.
“ For us, forgetting about print communications is not a good solution ”
In terms of distribution, are you much more reliant on your own stores, third party retailers?
We are working most of the time with retailers, which can be national retailers or independent retailers, but we have also, some of our own boutiques over the world. We have around 15 boutiques now, I mentioned to you before that we have six boutiques in India.
We are opening soon, a boutique in Kuala Lumpur. We have boutiques in Singapore, in the Middle East, but again it’s a small part of our distribution versus the independent retailers.
And how would you like the balance that in the future? Would you like to have more of your own stores?
Not necessarily. I think that when you are talking about a generous brand, as we are, we need a lot of traffic; we need a lot of people coming into the store. So, yes we need our own boutiques for the brand image for the brand legitimacy, but the business, most of the time, comes from the multiple stores.
Which is another important factor for a family business, is that the bottom line of each boutique has to be positive. When for conglomerates it’s not necessarily the case because they can balance that.
When we open a boutique, the first thing we do is a P&L and if the P&L proves to us that there is a potential risk, I’m not going to open it. One key factor for success for family and independent company is also to work closely with independent retailer because they need us, but we need them. They know their clients.
“ If the bottom line is not positive we cannot build the brand. We need to be profitable. ”
How do you feel about retailing your product online?
It’s the future. We just need to manage the channel of distribution in order not to over pass any partner within this chain. Today, we have sometimes distributors, retailers, that are our partner for decades and it’s part of our success, the relationship that we have with them.
They shouldn’t have the feeling that we don’t need them anymore because of this new channel of distribution.
How do you measure success at Raymond Weil?
With the bottom line. That’s the truth. If the bottom line is not positive we cannot build the brand any further. We need to be profitable. We have no other resources coming in from another brand, which is very successful, so it’s my bottom line all the time.
What is the next opportunity you would like to seize as a brand?
The fact that I think that people are looking for very elegant watches at an affordable price right now. The period of time is difficult so they are looking for a high value perception for a small amount of money.
And I think that’s what we are offering right now. We Toccata, with some of the other collections that we debuted at Baselworld, these I feel will be the elements of future success.
And finally, the biggest challenge you think Raymond Weil will face in the future?
As I told you before, fighting, fighting, fighting, fighting, against the pressure of the big groups. I like big groups, but not necessarily when they are putting a lot of pressure on my retailers.
That’s my challenge; when they come to stores and pressure retailers to give them more space because they gave a great space to Raymond Weil because we perform really well.
Effectively, at retail level, we compete with two to three big groups and we are the little one, stuck in the middle between the retailer and the pressure from very big groups. Even if we have great performance in store, long term relationships with the owner of the store, that’s my concern every day.
That’s my fight, to keep the brand where we are, in good stores with nice distribution.