When Frédéric Arnault took the stage in March to launch the third generation of Tag Heuer’s connected watch, he took over from the first Swiss watchmaker to develop his own smart watch.
The original Connected model was launched in 2015, the same year as the Apple Watch and two years before Mr. Arnault joined Tag Heuer, at the age of 22. His appointment was anything but accidental. The father of Mr. Arnault, Bernard, the third richest person in the world, sits at the top of the LVMH empire of which Tag is part.
Governments come and go but the Arnault dynasty – which controls the largest luxury group in the world – permeates French public life. Frédéric is the last of Bernard’s heirs to hold a position within LVMH and is now the strategic and digital director of Tag.
So what can Tag Heuer’s nearly 75,000 third generation smart watches bring to an industry where Apple has sold 31 million of its watches? “As in all markets, there is always room for competition,” says young Mr. Arnault. “We wanted to design and build a real watch, which looks like a watch made by a watchmaker.” It cites the screwed back of the watch, which allows a change of battery and gives an extended service life.
In addition to Tag Heuer’s staff in Switzerland, Mr. Arnault has a team of engineers and designers in Paris, making it a technological start-up with 30 people. All of them work on customizing the Android operating system of the watch.
He says: “Google is increasingly opening up its system to partners to customize it as much as it wants.”
Mr. Arnault also helped bring Tag Heuer Golf to the connected watch. The app, which offers 3D renderings of more than 39,000 golf courses, is also listed in the Apple Watch App Store, where 100,000 users have registered.
However, it is the return on investment potential that he believes makes the smart watch industry so attractive. “The return on investment for this project comes quite quickly: the dynamics are impressive – today, it is between 30 and 40% [growth] in the smartwatch market year on year, although this year may be different because of the coronavirus. ”
Arnault says a quarter of 15- to 35-year-olds in the United States wear smart watches – a high penetration rate. Its targets for the new connected watch are customers who do not yet own a Tag Heuer and even those who have never owned a mechanical watch.
He says: “We see this as an entry point into the world of mechanical watches. A high percentage of owners of connected watches [say] they would be interested in two to three years to buy a Tag Heuer mechanical watch. “
Arnault says the value of the smartwatch lies in its blend “of heritage and avant-garde” – which prompted him to work at Tag Heuer. He asks, “How do we really respect the heritage and continue to build on what made the mark?” How can we make it modern and contemporary and not old-fashioned? ”
The core business remains mechanical and it speaks warmly of the Heuer 02 movement combining quality and durability with ease of maintenance and an 80-hour power reserve. “We also have developments in the pipeline such as the carbon balance spring,” he says, referring to the component at the heart of mechanical watches.
Mr. Arnault is eager to learn from others and Tag Heuer has poached prestigious personalities from his rivals. Edouard Mignon, who previously worked for the watch innovation laboratory in Richemont. Arnault also convinced Carole Forestier-Kasapi, Cartier’s highly respected movement designer, to join Tag’s product team.
Beyond the launch of the Connected watch and its variants, Mr. Arnault’s concern is similar to the rest of the world: the effect of the coronavirus pandemic. “We were looking forward to this year’s Baselworld [show], “he says.” We think it’s good for the industry to come together – retailers, journalists, the watch ecosystem. ”
He is uncertain about the future of LVMH’s watchmaking event in Dubai, the first of which occurred in January. “Nothing has been decided. This year [the Watches & Wonders show] moved its date later in the year. This left a huge gap in January and so it was an opportunity to do LVMH Watch Week. Now, of course, it’s a different story. LVMH has now withdrawn from future Baselworld shows, Arnault said the company is in talks to exhibit at Watches & Wonders next year.
If that is the case, it is likely that Mr. Arnault’s youngest brother, Jean – who is about to start a business degree at MIT – will be there, as he is already on an internship at Tag Heuer.
Mr. Arnault says that Jean has also developed an interest in watches: “He looks at blogs, follows all the auctions, likes vintage pieces and it’s really great to share this passion with him.”
Given the intense vigilance of the Arnault family, the watchmaking interest of the youngest is fascinating.
While fashion is king at LVMH – Dior is seen as a cross between a religion and a French national monument for their father Bernard – taking an interest in everything that is watchmaking may be an indication that timepieces seem ready to take greater importance within the empire.