Creative minds, prime geographical location and a booming spirit of business partnerships.
Watches, mountains, cheese and more cheese. It’s no secret to anyone that these are few of the first things that come to mind when thinking of the 41,000-square-kilometer country nestled between Italy, France and Germany.
But as much as it values old-age traditions of cows descending from the mountains or the sound of the far-reaching alphorn, Switzerland in the 21stcentury undeniably represents a huge opportunity to be the center of innovation for the luxury sector.
Switzerland alone is home to Patek Philippe, Rolex, Breitling and Omega (among others). But Switzerland should not be forgotten on the fashion side either, with many high-end designers having a physical presence in the Italian-speaking region of the multi-national country and cutting-edge technological advances being made from Zurich to Lausanne.
Armani, Gucci, Hugo Boss, Michael Kors, Prada, and Tom Ford all have physical properties in the Italian-speaking region, just to name a few. In 2012, the Gucci Group invested a whopping 40 million Swiss Francs to build the fashionhouse’s new logistics centre in Sant’Antonino, in the Ticino canton. The 320,000-square-meter warehouse manages deliveries for Gucci, Yves Saint Laurent and Bottega Veneta.
Perhaps what makes the Swiss market particularly appealing in terms of innovation for luxury is that it is, in fact, one of the most inventive countries in the world. Switzerland was ranked the most innovative countries by the Global Innovation Index, drawing data from leading disruptive developments in the digital markets to finance. This innovation has sparked an intense culture of start-ups in Switzerland.
“Rankings were not just determined by the number of trademarks filed, a category in which Switzerland has traditional strength. Innovation was measured by 80 factors in total, such as mobile-application creation, scientific and technical publications,” according to Swiss Info.
According to recent data, more than CHF 930 million Swiss Francs was invested in more than 175 Swiss start-ups in 2017. This spirit of innovation and out-of-the-box thinking has transposed to more than just finance-tech or scientific journals, it’s encouraged a culture of entrepreneurship in the worlds of luxury as well.
Just ask Netcomm Suisse General Director Carlo Terreni. The e-commerce association is helping companies build a stronger e-commerce environment in Switzerland to enable sustainable growth across the industry. In partnership with Loomish, Netcomm Suisse is helping bring forward the most creative minds in the world of fashion to facilitate relationships with leading investors.
“For Loomish’ Fashion Innovation Award, we look for fashion-tech start-ups and bring them to Lugano in April to gather the best 15 participants to pitch to venture capitalists, private equity and luxury companies to really build up the community to either start working with top people or for them to invest. This is our second year doing it, and from luxury and fashion company feedback last year, they all asked to do it again because they are really starting to think about the importance of open innovation,” Terreni tells Luxury Society.
When looking at Switzerland as a top location to drive progress in the world of luxury, its geography plays a tremendous role as well.
Switzerland claimed 9 of the top 100 leading luxury good companies in the world, dominated by Richemont, Swatch and Rolex, according to Deloitte. While Italy gained the top spot for leading luxury goods in terms of number of companies, France has the highest share of sales. This puts three of the most powerful countries in luxury goods in close proximity, not to mention that while Switzerland is not part of the EU, it inevitably has close relationships with it.
“Many things are happening from here because the decisions of digital investments are being taken here, there is absolutely a growing ecosystem around innovation of luxury. It’s the right moment because many people, top managers of luxury companies, are looking at what can be done, what can be done better, and where they should go in five years,” Terreni says.
As the saying goes, two heads are better than one. With a high density of global banks, insurance companies, luxury brands and more, Switzerland also represents endless opportunities for cross-sector partnerships.
“Switzerland is a great country to do transactions, acquisitions, and establish technology companies so I would not be surprised if large corporations start investing more in start-up companies and technology companies from a capital market share viewpoint, not only as supplier,” Terreni adds.
Especially regarding digital, Swiss brands, luxury watch brands in particular—have put their reluctancy aside and adopted online sales channels through parthernships.
“Tag Heuer introduced a limited edition to be sold exclusively online in the US. In November 2016 IWC announced its partnership with the online-only luxury retailers Mr Porter and Net-A-Porter highlighting its ambition to focus on e-commerce. Some luxury watch-brands also partnered with blogs to launch limited editions. This is most notably the case of MB&F, Vacheron Constantin or Zenith with the online wristwatch magazine Hodinkee,” The Deloitte Swiss Watch Industry Study 2017 states.
In partnership with Fratello watches, Omega also launched its first watch officially sold online in 2017, the limited edition Speedmaster Speedy Tuesday.
“These moves come in addition to the growing development of mono-brand e-boutiques by many Swiss watch brands,” Deloitte adds.
On October 16, NetComm Suisse will host its 2018 e-Luxury Summit in Geneva. The half-day event will focus on pioneering luxury customer experiences through digital technology and more.