Watches have hands, faces, cases, and movements. Did you know they have roots, too? You will, as more mid- and luxury-priced brands focus their merchandising on what many call their “watchmaking roots”—origins, achievements, and vintage products.

This focus on the past—reinterpreted for 21st-century marketing—is one of several strategies upscale watch companies are using to stay profitable and singular in the competitive U.S. watch business. They’re also redefining their images, boosting marketing dollars, refurbishing signature timepieces, and even tweaking logos.

“We exist in a crowded market,” says Tsutomu Mitome, chairman of Seiko Watch Corp. “There’s a need for a distinctive approach and a need for innovation to focus the brand and expand distribution.”

To support these strategies and boost sales, many watchmakers are limiting their dealer networks to retailers committed to their brands, focusing more on independent jewelers, and polishing an image of exclusivity. As Daniel Lalonde, president and chief executive office of LVMH Watch and Jewelry USA, puts it, “We’re becoming more selective and want to do more business in fewer stores.”

Upscale brands also are providing more co-op advertising, training materials, and in-store marketing support—especially distinctive brand “corners,” “salons,” or “boutiques” to increase their in-store visibility.

Here’s a closer look at what’s happening at several mid-level and luxury brands.

Seiko

Seiko, a popular mid-priced seller, has “a new vision,” says Tsutomu Mitome, chairman of Seiko Watch Corp., the maker and marketer of Seiko and Pulsar watches. “This new concept— ‘innovation and refinement’—guides every aspect from design to technological development to distribution strategy.”

“We’re redefining what we’re about as a brand, focusing on our heritage and expertise in technology while putting more emphasis on distinctive styling,” explains Les Perry, executive vice president of sales and marketing for Seiko Corp. of America (SCA).

That focus is embodied, say SCA officials, in Seiko’s revamped Arctura (introduced in 1997), the first batteryless quartz watch driven by kinetic energy from wrist motion. Just relaunched, Arctura Kinetic watches include stylish case designs (sharply defined concentric shapes, deep-set textured dials), a model that turns off if not worn for 72 hours and resets to the correct time, and an innovative chronograph movement combining traditional watchmaking and microelectronic kinetic technology.

Only one in five Seiko dealers—those that actively promote Seiko and that can provide space for Arctura watches and displays, plus those of another SCA core brand—will carry Arctura ($375 to $650 in titanium). SCA is also debuting two under-$450 lines for men and women: Chiseled Sport contemporary watches, some with diamonds, and Tressia, a high-fashion line that “doesn’t look like Seiko,” says Perry.

Meanwhile, SCA is repositioning Pulsar, which “in recent years focused too much on promotional price-points,” says Perry. While keeping its “extra value” (under $100) watches, he explains, SCA is “giving Pulsar a new emphasis—great styling at affordable prices.” The first examples are three “iconic” collections priced at $95 to $250: men’s and women’s Retro lines, Tech Gear sport watches, and Double Time women’s watches with reversible bracelets.

SCA’s 2003 media spending is up 50%, “north of $25 million,” and up 80% for Seiko alone, says Perry. That covers a major presence on network and spot-market TV; significant increases in newspaper and magazine advertising; more co-op ads, in-store fixtures, tagging, and inserts for retailers; new displays; and ads targeting consumers between the ages of 20 and 40.

Arctura’s new U.S. ad campaign carries the tagline, “Your watch tells the most about who you are,” and returns Seiko to TV after a five-year absence. Since younger men are Arctura’s market, SCA is advertising in magazines like Maxim and Men’s Health. Tressia’s campaign promotes Seiko to younger women as “an icon of innovation and refinement,” says Perry. A new Seiko Web site has special features for retailers and consumers.

Pulsar—which has been out of the national media for years—is “getting a face again,” says Perry. It has a new tagline (“Where substance meets style”), is back on national radio and cable TV, and appears in national magazines.

Meanwhile, Seiko is trimming its almost 10,000 outlets 10% to 13%. Jewelers remain a third of the total. “With our changes in product image, we must be consistent in how it’s presented,” explains Perry. Overall, Seiko’s aim in its “re-imaging”—including a slight rise in prices—is to boost its average sale ($250) 18% to 20% in three years, he says.

Rado

Rado, best known for high-tech ceramic watches, wants to expand that image. “We’re too much considered a niche brand,” says the brand’s general manager Caroline Faivet. “I believe we can broaden that to be seen as everyone’s watch.”

One area of emphasis, she says, is Rado and diamonds. There’s a new focus in marketing, product design, and advertising on Rado’s ceramic-and-diamond watch lines such as Integral Superjubilé ($2,500-$2,700), Sintra Superjubilé ($3,200-$4,500), and higher-priced lines like the all-diamond Blue Fascination ($25,000-$30,000). Rado is promoting its diamond watches as gifts for special occasions, especially engagements and weddings. “We want to go in the same direction as the diamond industry and connect Rado watches with love,” says Faivet. “I’d really like to see it become a custom for the bride to give a Rado diamond watch to her fiancé, as a counterpart to the diamond engagement ring he gives her.”

Faivet also wants to link the brand more closely with fashion. This month, for example, at one of Rado’s top New England jewelers, style experts are scheduled to show consumers how to match Rado watches with fashions and diamond jewelry. And in its new training materials, Rado is emphasizing “more of the emotional approach, the sensual connection with the watch,” says Faivet, and focusing less on its high-tech features.

Rado also is slimming its retail network, “focusing on doors that are real partners with us and investing more money in retailers who actively support us,” says Faivet. The brand, which had 780 stores in January, will have about 700 by year’s end.

Baume & Mercier

Baume & Mercier, the sixth-oldest watch brand (founded in 1830), is trimming distribution and investing more heavily in its retailers “to be more important to fewer people [and because] a more selective distribution raises the brand’s prestige and our dealers’ profitability,” says Edward Wright, Baume & Mercier North America president.

Since last year, the Swiss brand has closed 12% of its U.S. doors, narrowing its network to what Wright calls “strong local partners.” At the same time, it’s boosted spending to market the watch for “better visibility with our customers, to create more awareness of the brand to push people into stores and increase turnover at point of sale.”

One significant investment is B&M’s sycamore-and-pearwood in-store display “salon.” The company installed 50 last year, has budgeted $1.4 million to build and install 65-plus this year, and could have 250 to 300 in place by 2005. “We custom design it to each store, sending an architect to work with the owner on the design, location, and plans, and we pay 100% [of the costs],” says Wright.

B&M is modifying product, too. There’s a new generation in its signature Hampton series—the horizontal screen Hampton City collection, with a larger size and unique design; a new Capeland women’s sports watch (36 mm, with or without diamonds) as well as a titanium and pink gold diver’s watch; and 11 new 18k women’s dress watches ($4,900-$6,900, with or without diamonds) created for the U.S. market. Response to the watches has been strong: B&M’s U.S. orders at April’s SIHH show in Switzerland were up 40% largely because of the 18k watches.

B&M also is giving “a lot more co-op support” for ads, catalogs, billboards, and p.r. events, Wright says, and is holding regional in-store events (such as receptions and local charity tie-ins) across America to launch Hampton City.

Zenith

Zenith (pronounced “ZEN-eeth”), the luxury Swiss brand founded in 1887 and known for its mechanical movements, wants to expand its U.S. market to include younger affluent consumers. Tapped for the job is U.S. watch industry veteran Paul Ziff, recently named managing director of Zenith North America. His brand-builder credentials include 11 years at Chopard and, earlier, developing the Concord brand.

Though highly regarded among watch aficionados, Zenith is still a well-kept secret in the United States. “My goal is to make sure it no longer remains one,” says Ziff. Backed by LVMH, which bought Zenith in 1999, he’s “committed to taking it from a small niche to a broader category of people who aspire to own a fine watch, but aren’t necessarily watch collectors.” To do this, he says, “We’re combining traditional watchmaking with big changes in product development, styling, and cutting-edge merchandising.”

Zenith’s traditional appeal—to people with a more mature mindset—is changing, says Ziff. “There’s a younger look to the line—classic with a twist of modern, traditional with a touch of styling.” Examples include Chronomaster Star, Zenith’s first women’s watches in 20 years, including a diamond model in white; Port-Royal, with checkerboard guilloche dials; and Grand Chronomaster Open, with a dial window showing Zenith’s El Primero movement.

At present, about 50 U.S. jewelers sell Zenith. Ziff will increase that somewhat but doesn’t have a specific number. “It’s important to be in places like Los Angeles, Miami, San Francisco, or New York, but we’re also hearing from places like Arkansas,” he says. “The question is how much distribution in America is enough to be known and still remain selective. We’re looking for retailers really interested in working with us, who’ll do what they say to promote the brand, and whom we can support in their marketing.”

To raise awareness of Zenith among affluent consumers, Ziff will advertise in publications other than watch magazines, such as women’s fashion books, business magazines, and car magazines. He’s considering billboards in key markets and will provide new in-store displays, including point-of-sale flat-screen DVD units.

Hamilton

Hamilton, founded in Pennsylvania in 1892 and once one of America’s best-known watches, is refocusing on its roots as a leading American brand, says brand manager Patric Zingg.

Now owned by Switzerland’s Swatch Group, Hamilton lost its focus in the late 20th century, says Zingg, “trying various approaches, from ladies’ to military watches, and was everywhere, from low-end to high-end.” Hamilton’s managers have put it back on course, and Zingg’s goal is to “rebuild the brand in the United States, where it doesn’t have the recognition it deserves.”

One way he’s doing that is by updating watches from Hamilton’s legacy. Examples include the Khaki Navy and Khaki Aviator lines, inspired by a famous Hamilton World War II watch, and the Mount Vernon collection, based on a 1940s model.

New training materials for dealers’ sales associates explain not only Hamilton’s collections but also its heritage, says Zingg. (See “How Hamilton Watch Won World War II,” JCK, November 2001.)

Zingg also wants to make Hamilton more familiar to younger consumers. “Most people over 50 know us,” he says. “I want those 25 to 30 to be more aware, too.” One way to accomplish this is through movies, “part of our American legacy,” he says. Hamilton has created watches for movies from the classic 2001 to the more recent Pearl Harbor and Men in Black. For this summer’s S.W.A.T., Hamilton created watches for the film as well as a tie-in collection and a limited edition. Advertising linked the watch with the movie, in-store activities, and a promotional event for the Los Angeles premiere.

Hamilton is lending support to other activities that touch the film industry, too, such as film festivals, starting with June’s Nantucket Film Fest. The brand also planned at least two major promotional events for 2003: One in May, spotlighting its military links, was held on the aircraft carrier Intrepid in New York City to launch Hamilton’s Khaki Navy and Aviator lines.

TAG Heuer

TAG Heuer is redefining itself to make it “recognized as the reference in luxury sport watches, whose very name is synonymous [with them], as Nike’s is with running shoes,” says Daniel Lalonde, president and chief executive officer of LVMH Watch and Jewelry USA, TAG Heuer’s distributor. The redefining process affects marketing, products, and distribution.

LVMH, the French luxury goods group that bought the Swiss brand in 1999 for $746 million, is investing heavily to promote it here and worldwide. A major step late last year was luring golfer Tiger Woods from Rolex to be TAG Heuer’s “global ambassador.” “Woods epitomizes TAG Heuer’s values—performance, integrity, and competitive drive—and will be with us a long time,” says Lalonde. “It’s a great way to bring attention to the brand and keep it at the top of the consumer’s mind.”

TAG Heuer has boosted media spending 50% for 2003. The ad campaign uses the tagline “What Are You Made Of?” and features Woods in corporate image ads and with the company’s Link collection. The campaign also includes its first TV ads in a decade.

The brand’s 143-year history includes timing the Olympics as well as skiing and motor sports events, and its merchandising strategy is “to take TAG Heuer back to its roots and achievements in precise sports timekeeping and luxury products and build on those origins in marketing and products,” says Lalonde.

That’s apparent in this year’s watches. Much of the focus is on Link, the brand’s emblematic sports watch—redesigned, resized (down to 39 mm), slimmed down, and given a more contemporary look. There’s a redesigned tonneau version of TAG Heuer’s 1963 Autavia watch; additions to Carrera (1964), including revival of its vintage model and a classic chronograph redesigned for women; a new version of Monaco, popularized by actor Steve McQueen in the 1960s; and a smaller, lighter, more flexible Alter Ego, its sleek stainless-steel women’s watch, which also has a new dial.

The brand has trimmed U.S. distribution 20% (to about 1,000 stores). “We want retailers who’ll step up to the plate and co-invest with us in the brand and provide [in-store] real estate to promote it,” says Lalonde. In return, TAG Heuer offers “more support, in-store events, and marketing tools,” including in-store brand “corners” with a large plasma screen display. The brand’s top 100 sellers get these first, but eventually 200 to 250—a quarter of its outlets—will have them.

As for consumers, “We’re not targeting a particular age or gender demographic, but a mindset,” says Lalonde. “This [brand] is for people with an active lifestyle and discerning tastes, whether they’re in their 60s or their 20s.”

Omega

Omega, the prestigious 155-year-old Swiss brand, is fine-tuning its products and U.S. distribution. The market trend toward larger men’s watches is reflected in two new timepieces, including a golden oldie reinterpreted for the 21st century.

The new Railmaster series ($2,395-$2,495) is an updated version of a 1950s model and comes in 38-mm and 41-mm sizes. Omega introduced it in June with a high-profile celebrity-studded trip on the Orient Express from Vienna to Prague, an event that captured press attention in Europe, Asia, and the United States. All aboard were top officials of the brand and The Swatch Group (Omega’s parent firm), plus actors, models, beauty queens, and athletes. The Railmaster debuts in the United States this fall, supported by an ad campaign featuring actor Pierce Brosnan.

Also noteworthy is the new “Double Eagle” in Omega’s 23-year-old Constellation line—a watch with “a new, bolder look and more masculine appeal,” including a larger 38-mm case, says general manager Robert Emmons. “This is a new statement for Constellation,” he notes, a counterpoint to the focus in recent years on Constellation’s “My Choice” women’s watches, promoted by supermodel Cindy Crawford.

Meanwhile, Omega has reduced distribution to 750 outlets, 10% fewer than last year, “to concentrate on and better support those jewelers who support us in this challenging market,” says Emmons. Omega is providing more co-op support and putting its in-store boutiques into more shops. The boutiques, whose behind-the-counter light boxes feature testimonials by Omega “Ambassadors” such as Crawford and Brosnan, should be in 18% of Omega’s retailers by year’s end. Thus far, the changes are effective: “We’re selling more product now even though we have fewer doors,” says Emmons.