a digital space demonstrative: brand analysis and …...company share/sales analysis •fossil’s...

Customer Insights and Market Intelligence

Brand Dynamic Analysis and Category MarketshareOf Watch Market – USA

A Digital Space Demonstrative: Brand Analysis and Category MarketShare

Purpose

The purpose of this presentation, is to serve as a

Demonstrative: Category and Brand Dynamics Analysis, to set

expectations for a monthly report offered in our Customer

Insights & Market Intelligence services package , that A

Digital space offers.

This presentation is about Fossil Watches, and it

interactions in the USA watch market.

Table of Contents # Topic Slides

1 Overall Watch Category Analysis 3-7

2 Watch subcategory analysis by watch type 8-14

3 Watch subcategory analysis by price band 15-24

4 Company Share / Sales analysis 25-28

5 Brand share analysis 29-32

6. Information from external sources 33

7. Fossil watch models 34

8. Strategies for Fossil watch company 35

Overall Watch Category Analysis - Volume

Overall Watch Category Analysis - Value

Overall Watch Category Analysis - Price

Overall Watch Category Analysis- CAGR

Insights - Overall Category● INSIGHT: Customers are purchasing less watches, but of the brands they are continuing to

purchase from, the prices of the watches are higher (Slide 6: Volume will decrease 6.8% from 2012-

2022, while Value will only decrease 5.25%)

○ Why? Customers see a divide in quality of watches and utilitarian need for watches

○ Why? Watches are worn less and less as today’s consumer has the time available to her from

many different locations

● INSIGHT: The price of watches will start to plateau as consumers separate watches from “time-

pieces” and see them as status symbols (Slide 5: The largest drop in price was from ‘14-’16, and

now as price is stabilizing, it looks to remain stagnant in the next five years)

○ Why? Customers see watches as more of a luxury item in today’s culture

○ Why? Possibly because they do not need to rely on watches to give the time now that

smartphones are more prevalent

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Watch Type-CAGR

Watch Subcategory Analysis by Watch Type-Insights

- Insight: Mechanical watches have the highest increasing average price point,

historical CAGR of 5.16%. and also have the most significant decline in

volume sold of-4.90%

- Market is becoming more price sensitive and finding options they prefer

at lower costs

- Volume sold YOY considerably less than the mid price and low price

options

- Insight: Quartz Digital watches have the lowest average price point and

lowest decline in historical and future CAGR, -2.28% (12-17) and -2.33% (17-

22)

- Although still declining in YOY volume and value sold, there is still a

presumably a market for digital watches

Watch Subcategory Analysis by Watch Type

Watch Subcategory Analysis by Price Band

Watch Subcategory Analysis by Price Band

Watch Subcategory Analysis by Price Band

Watch Subcategory Analysis by Price Band

Watch Subcategory Analysis by Price Band

Watch Subcategory Analysis by Price Band

Insights by Price Band

● Overall, volume declining yet price increasing amongst all three price

bands

○ Price is the lever to make-up for volume losses

● High price watches taking price at a fast rate than other price bands;

projected to increase price by about 25% over 10 year time frame ○ Even as High price watches take price up, the category does not reflect negatively

to this

○ Indicates there is still potential to continue to increase price without risk of volume

declines

● Low price watches took price at the slowest rate yet declining at the

quickest rate

Watch Subcategory Analysis by Price Band- CAGR

Watch Subcategory Analysis by Price Band-Insights

- Insight: Based on band subcategory data, growth and profitability is a

struggle.

- High band YOY prices continue to rise, which could be signaling a

declining market as unit sales and volume continue to decrease

- Basic and mid band average price points have remained relatively flat

- What new markets are affecting the watch market?

- Are consumers purchasing watches based on bands?

Company Share/Sales Analysis

Company Share/Sales Analysis

•As of 2016 Fossil holds 14% of the

market share.

•From year 2012 to 2016, Fossil

continue to be the top market share

holder.

•Richemont North America is close

competitor who has gained market

share around. 2014 and maintained

it. Also Movado Group gained 1.5%

during same time period.

•Fossil, Richmond, Rolex, Timex and

Movado are the top five companies.

Company Share/Sales Analysis

Company Share/Sales Analysis

•Fossil’s sales corelates to market share from 2012 to 2013, as the market share increases and total sales increases. So Fasil’s sale also shows positive trend.

•In 2014, even though Fossil’s market share lost by 1.4% , due to increase in total market size, Fossil sales still shows positive trend.

•In 2015 and 2016 total market size got reduced gradually, so does the Fossil’s sale .

Brand Share Analysis

Brand Characteristics

Brand Market: Individuals seeking a fashionable or connected watch that adds a touch of luxury to their lifestyle

Dynamics: Distinguishing products in a declining watch segment

Purpose: Decide which brands to invest, maintain, or divest

Brand Portfolio:

Brand Portfolio Matrix

Brand Portfolio Strategy Matrix

Information from External Sources

Mintel: October 2017 report - Watches & Jewelry

Executive Summary - YOY total growth expected

while annual pace of growth to decelerate

- Watches are lumped

into jewelry category

and get placed as a

status item

Source: Mintel: October 2017 report

Fossil Watch Models

Mid point price range ($75-$275)

Mostly analog style

Customization up and coming

Trying to break in to smart watch space

Source: fossilgroup.com

Strategies for Fossil Watch Company

- Overall watches are becoming more of a luxury status item- likely due to the

fact that almost everyone uses their phones for the time

- High band YOY prices continue to rise, which could be signaling a

declining market as unit sales and volume continue to decrease

- Fossil should not focus on high priced mechanical watches- customers are

becoming more price sensitive

- Fossil should remain in the low-mid price band and focus on Quartz Analogue

and Quartz Digital

- As Smartwatch category grows, analyze the entrance of more products

to satisfy those consumers