Apple seeks high ground with Apple Watch

The Apple Watch shop at Paris' Galeries Lafayette.
The Apple Watch shop at Paris' Galeries Lafayette.

The brand's refurbished retail presence marks a new foray into luxury -- and its high-end watch raises questions about upgrades

Anyone who’s seen Apple’s countdown-themed ad campaign knows the first Apple Watch models reach consumers April 24.

With watches starting at $349, the rollout taps Apple’s proven skills marketing elegant consumer electronics such as the iPhone and  iPad. But it also pushes Apple’s fashion edge to unprecedented heights with the Apple Watch Edition, which includes options in 18-karat gold and runs up to $17,000.

To make room for this brand requires Apple to think differently about its retail experience, and it raises questions about paying heirloom prices for a piece of electronics that is bound to become outdated.  

Apple’s flirtation with the luxury market dates back to the 1990s, when the company offered a limited-edition Twentieth Anniversary Mac with leather wrist rests, and the company showed off prototype computers that integrated mahogany and other pricy materials. However, the 18-karat gold Edition is the first gadget of its sort to get global distribution.

In the process, Apple has adapted its own line of Apple Stores to accommodate scheduled one-on-one fittings for the high-end watch. What’s more, it’s placed itself alongside Cartier, Rolex and other luxury timepieces in upscale department stores like London’s Selfridges, Tokyo’s Isetan and Paris’ Galeries Lafayette.

While the London and Tokyo stores have a history accommodating pop-ups run by a third-party brand, the Apple Watch shop (which sells watches and iPhones) is a new experiment in Paris.

A representative of Galeries Lafayette in Paris told Campaign that the Apple Store, which has been open since April 10 and staffed by Apple employees, represents an unprecedented level of control at the luxury department store.

"This is the first time a brand has run its own store within Galeries Lafayette," she said. "It’s a very new thing for us."

Peter Cohen, managing editor (Mac) at, said shopping for the Apple Watch Edition is a "much more direct and personalized experience" than the already high level of customer service provided by staff at Apple stores. After a shopping trip to Boston’s flagship Boylston Street store, Cohen reported that "Apple has really tried to refine the experience. I favorited a couple of models via the Apple Watch app, and they had them ready for me. It was a very refined experience compared to other Apple Store experiences."  

According to Ana Andjelic, senior vice president and global strategy director for luxury agency Havas LuxHub, "Apple has for a long time now been the physical retail experience pioneer. It invented the Genius Bar — the concept of personalized consulting service.

"That’s one definition of luxury — personalized attention," Andjelic said. "Today, however, Apple needs to up its game. It is certainly not enough to place Apple Watch in the safes or to roll out a red carpet in order to convey exclusivity. Apple will need to re-think its entire physical store experience, come up with a new retail promise and deliver it as a consistent, customer-centric omnichannel experience."

Andjelic pointed out that Angela Ahrendts, Apple SVP of retail and online sales, has already redefined  luxury retail as CEO of Burberry. "I suspect she will do something similar with Apple — of course, in a way that's unique to Apple brand."

Apple did not respond to requests for comment about its retail plans.

Upgrading luxury?
One novel question that remains unanswered: It’s one thing to replace a $200 smartphone when a faster model arrives — but what’s the upgrade path for a $17,000 gold watch?

Fueling speculation about upgrades: The electronics powering every Apple Watch model comprises a compact, self-contained unit called the S1, which Apple describes as "an entire computer system on a single chip." This sealed unit contains an Apple-designed processor; related to those in iPhones and iPads; memory chips; and related components for connectivity and sensors, such as those that monitor the wearer’s heart rate.

So far, Apple has been studiously silent about opportunities Edition owners will have to upgrade when new Apple Watch models ship with faster processors or more memory. "We have not made any announcements regarding Apple Watch upgrades at this time," an Apple representative told Campaign.

However, many Watch-watchers suggested that state-of-the-art electronics will count for less than fashion points when it comes to the Edition. And for customers who can afford such a statement piece, upgrading it may not be the top priority.

"If you’re spending $17,000 for a watch, you probably don’t care about upgrading it that much," said iMore’s Cohen. "I expect the upgradability issue to be more for the people who spend $350 or $700 for a watch – that’s real money for them."

"The high-end gold edition is actually an anomaly in the same in spirit as a shiny pink Bentley," added Chris Moody, creative director at Wolff Olins. "It’s for those who can afford it, not those who desire the object."

To Moody, the customization options set it apart from traditional luxury watches. "Its ability to morph and be tinkered with by the user means it has much closer DNA to a luxury car. The brand name makes an overarching statement, but the color and choice of detailing tells a much richer story about its owner."

Andjelic concurred that the Apple Watch Edition is about luxury, not upgrades. "If you think about it, Apple Watch is in its timeliness more similar to luxury accessories and  luxury fashion than to the luxury watch market.

"Luxury watches were traditionally made to last. That’s the old definition of luxury, though," said. "To stay competitive, luxury brands need to constantly find new ways to tell their story. They need to be timely.

"In that sense, I think that the luxury buyers of Apple Watch Edition are going to replace their watch each time the new version comes to the market — just in the same way they update their iPhones, or their clothes, or their bracelets and bags every season."

Daniel Drew Turner contributed to this story.

Cannes Lions 2015 Coverage

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