Watchonista One-on-One: TAG Heuer CEO Frédéric Arnault On The Next-Generation
When he was named to the position of CEO of TAG Heuer in the summer of 2020, the then 25-year-old Frédéric Arnault, son of the famed LVMH CEO Bernard Arnault, was the youngest CEO to be named to a big-group brand. Since then, he has steered TAG Heuer to new heights, eager to attract today’s younger collectors and watch lovers, and to ensure the brand stays ahead of the times.
Pushing past his numeric age and implementing some visionary concepts, Frederic Arnault has made a shift in direction that some might call revolutionary. After all, who would expect TAG Heuer to release a $25,600 tourbillon with Mario Kart wheeling around on it? And did anyone see the lab-grown diamond Plasma watch coming? Add to that the introduction of special-edition icons (like Monaco and Carrera – both of which were up for awards at GPHG), the refocus on the brand’s role in sports, its digital savvy, and its techy lead with connected watches and it becomes evident that we are witnessing the fruits of Arnault’s plan.
Recently, I had the opportunity to zoom with Frédéric Arnault, to discuss his innovative marketing and product plans, his ideas on smart watches and his drive for innovation.
Roberta Naas: Before we get into the details on your plans for TAG Heuer, I am wondering if, on a personal note, you met with any resistance coming into the brand as CEO and a next-generation leader?
Frédéric Arnault: Even if I am a next-generation leader, it is in keeping with the lineage. Heuer company was led by three successive CEOs that took over the brand when they were in their 20s. Jack Heuer was 25 when he took over, his father was young, and his grandfather was 20 when he started the brand. But yes, there was a little resistance, but the main point was the fact that I showed employees and others that the brand was important enough to trust it to a family member. We are a few people in the family with 75 brands, so when we go to head a brand, it gives the message that the brand is very important. And I showed dedication since day one. I am fully committed, and I prove that I am passionate about it. My father embraced the vision I put in place. When I joined, we made a big shift, but there is still more to come. This is just the beginning of a five-year rollout.
RN: How are you reinforcing the brand’s tagline, Swiss Avant Garde since 1860?
FA: We will always remain true to our roots, and moving forward, on a corporate level, a key element is to invest heavily in avant-garde. Today, that means innovation, and we are all about that. We were first to invest in lab-grown diamonds on a watch, and you will see that solar quartz technology will become stronger to the market next year, and the same for connected watches, but we are also elevating our mechanical know-how with icons like the Monaco and with extraordinary technologies and unique complications.
We have to elevate the desirability of the brand by increasing the uniqueness of the product and moving forward with brand affiliations that are true to who we are. This includes the sports realm. We have always been strong in sports, especially racing and sports of speed, and we are benefitting from a rebound of interest in the Formula 1 sport that a few years ago didn’t seem relevant anymore. Now, it is growing again, and we are enhancing the Formula 1 collection.
RN: Are you embracing the digital world more strongly than in the past?
FA: We are investing in all aspects of digital, including redesigning our website and keeping the content fresh and exciting, and engaging on all social media platforms. We have our own TikTok account and work with TikTokers to offer younger perspectives. I was cautious about going into the crypto currency space. I didn’t think we needed to be the first, but we embrace in two ways: We accept it as a way of payment, and via cryptocurrency, we have a range of possibilities to embrace the world of NFTs. We decided that instead of creating our own NFT collection, we would create something cool and fun for the user. So, for our connected watch, we launched a new feature: A photo display that can display their NFTs on the connected watch. It has been very successful. We are reaching an all-new client, a new world. We offer functionality that resonates with them and lets them talk to their passion.
RN: What is your focus for the brand when it comes to marketing and distribution?
FA: We are marketing in a way to try to reach a younger generation. TAG Heuer has always been the first luxury Swiss watch that young people buy, or get as a gift, and many tell us this is the watch that brought them into loving this space. And that is still very important to us. There are a lot of people who don’t consider themselves collectors, but own two or three watches. Our goal is to be one of those few watches that people will buy in their 20s and 30s, thanks to the design, the brand associations, brand ambassadors and technical strengths. We are elevating the brand through products as well as distribution. In 2019 we had 4,000 points of sale, and now we have 2,500 with a business that has been growing. We are focusing on great locations, bigger stores, and strong investments in e-commerce, which is a new trend in collecting watches. Retailers are still very important to us, but the trend is toward mono-brand stores.
RN: How are you evolving the connected watch series?
FA: Four or five years ago, we were seeing trends in the market that pushed us to adapt a new strategy, with the main factor being the smart watch business. That move pushed us into different prices points and put us in front of another audience. Now, the connected watch volume is increasing, and becoming a core pillar for TAG Heuer. It was so important to us that we acquired a tech company to complement our product with technology like the golf app. It is completely new for the brand and the group. And there is more to come.