OPINION: The luxury aspiration gap

No-one could have missed the chaotic scenes from cities around the world when the Royal Pop — the result of the much-anticipated collaboration between Audemars Piguet and Swatch — dropped in stores on May 16. Both brands have tried to distance themselves from the ugly events, but the underlying reasons and implications remain. Leading watch journalist and podcast host Robin Swithinbank ponders whether the widening gap between rich and poor makes such febrile occurrences more likely as the perception of luxury shifts.

I dread to think how busy Swatch’s social media monitoring team have been these past few weeks. Can you imagine? Think of the sentiment data charts alone. The one for product might be holding up — as a $400 execution of a $40,000 watch, Royal Pop has gone down nicely. Did you see that plastic tapisserie? Nae bad. But as for the drop itself? Goodness. Records for usage of the swearing face emoji may have been broken.

Much has been said and much has been written about the launch of the AP x Swatch Royal Pop. Swatch handled it badly, most have concluded, either out of ignorance or willfulness. AP meanwhile doesn’t seem to be carrying much can for the scuffles and street-side scalper camps, but then legion voices have said it has poured mercury into the water stream by giving Swatch carte blanche to play princess with its crown jewels. Then again, there were plenty out there who thought the whole thing was really very clever, too.

We could play the blame game all night, and it’s going to be a long time before contemporary analysis (half-baked guesswork) matures into fact, so let’s put the wagging fingers down for a moment and zoom out. The bigger picture here is, I feel, far more interesting and far more significant, and has nothing specifically to do with Swatch, AP, or Royal Pop, albeit the collaboration and the response to it are clear indicators of what’s going on out there in luxury consumption.

The bigger picture then is that luxury is entering a new and very public battle, one against perceptions of wastefulness, hyper-exclusivity, and social oppression.”

That picture came into sharp focus for me a few weeks ago when Imran Amed, founder of Business of Fashion, posted a briefing in response to a panel he’d attended at the Financial Times’s Business of Luxury Summit. Unfortunately, I wasn’t there, but I’m happy to rely on his account, which included an alarming Bain statistic that the luxury market lost 50 million customers between 2022 and 2024, a drop of 12.5 per cent. Macroeconomic gloom and post-pandemic price gouging during the so-called revenge purchasing era were cited as the leading causes for this mass walkout, and no surprise. 

Amed drew a parallel between this and some really very prescient comments published over the past decade on Business of Fashion. First of those was from 2016, when Luca Solca, one of the luxury sector’s most respected analysts, argued that “inequality drives luxury growth only when it is socially and politically sustainable.” 

As is increasingly evident, the inequality gap has become a canyon, making it increasingly unsustainable. In fact, it’s making a lot of people very angry. When Blue Origin’s rocket exploded during a fire test at the end of May, commenters didn’t pull their punches. “In a world with so much poverty and suffering, people find Bezos’ wealth and waste obscene,” said one Times subscriber of the Amazon owner’s space project.

Next was from Vikram Kansara, Business of Fashion’s current editorial director, who in 2020 said portentously that “if inequality becomes so deeply entrenched that wealth and status are simply passed from generation to generation, luxury goods will cease to be badges of success and become symbols of oppression.”

The bigger picture then is that luxury is entering a new and very public battle, one against perceptions of wastefulness, hyper-exclusivity, and social oppression, and it was into this prickly mise en scène that Royal Pop entered. 

It gave the excluded an opportunity to access what they deemed a talisman of exclusivity, and their anger was then spiked when it became clear first access would be limited to those ready to sleep on the streets or accept flipper extortion. That being no choice at all, stampedes, riots, and, in some cases, violence erupted. 

As a brief aside, some might write this off as unarguable on the basis that Royal Pop isn’t an AP. And yet it really is. See the big, brand-sanctioned AP logo in the middle of the dial, the one sitting above the Swatch logo.

The concern — and again, this is not at all specific to Swatch and AP — is that this phenomenon is only gathering momentum. Using watches as the example, take one look at the Federation of the Swiss Watch Industry (FH)’s export data and it’s abundantly clear that Bain’s analysis has legs, and that Solca and Kansara’s forecasts are coming true. Switzerland is boxing up fewer than half the number of watches compared to a decade ago while raking in a lot more money. And on volumes, that’s even with the addition of the multi-million-selling MoonSwatch of 2022, which now begins to serve as one of the industry’s first indicators of luxury’s new paradigm.

The luxury aspiration gap is widening all the time, and watch brands would be well advised to think clearly about which side of it they’re going to call home.”

With no apologies for getting political, the climate is ripe for the rapid widening of what we might call the luxury aspiration gap. Contributing elements line themselves up: the continuing cost-of-living crisis, out-of-control food and energy prices, the NEET [Not in Education, Employment, or Training] problem, the threat to jobs (particularly school leavers and graduates) posed by AI, the breakdown of trust, individualism, and an almost total lack of faith in our system of government. Speaking as a Brit, it felt telling that some of the worst scenes from the Royal Pop drop were recorded on Britain’s shores.

What does this mean for luxury watchmakers? It’s an uncomfortable question, no doubt. At the very least, it presents a choice. Pursue uber-luxury with little regard for the social and political consequences? Or look for the qualities that will create meaningful connections with — for want of a less socialist term — the people?

The divide is becoming increasingly apparent. The venerated, often group-owned brands in the former camp; microbrands in the latter. On that note, it was interesting to hear Johann Rupert acknowledging to his shareholders last month that Richemont sold Baume & Mercier because it didn’t know how to sell its watches. Watches, that is, that retail for ‘just’ a couple of thousand bucks.

This isn’t to say the uber-luxury cohort won’t win. They will. The fastest-growing, highest-value brands are from that space and there’s a healthy market for high-tariff scarcity. But it is to say that any time brands such as AP marry high-street hype with high-end horology, they can expect a Royal Pop-style rumble. The luxury aspiration gap is widening all the time, and watch brands would be well advised to think clearly about which side of it they’re going to call home. Otherwise, they might just fall into it.