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The new Rolex Day/Date 36 in 18-karat yellow gold with a turquoise dial was introduced at Baselworld in March. Mechanical watches and watches made with precious metals are performing strongly at retail right now, NPD Group said.
New York—Traditional watch sales outpaced smartwatch sales in the first quarter of 2019, according to a recent report from The NPD Group.

Though smartwatches took the top sales spot during the 2018 holiday season, traditional watches have made a comeback, shifting back to owning a majority share of the market.

The shift didn’t come as a surprise to Reginald Brack, NPD’s watches and luxury analyst, who has seen first-hand the cyclical nature of the watch market.

Smartwatches are a “heavily gifted” item, explained Brack in an interview with National Jeweler Wednesday, and so sales tend to spike in the fourth quarter around the holiday season.

By the time the first quarter of the year rolls around, traditional watch sales usually pick back up, he said.

Though seasonal shoppers may gravitate toward smartwatches, Brack doesn’t view that as a negative.

“We look at smartwatches as a gateway into traditional watch purchasing,” he said, noting that many smartwatch owners haven’t owned a watch before, potentially creating a new influx of customers.

He pointed to a separate consumer survey that found only 17 percent of shoppers said purchasing a smartwatch would prohibit them from buying a traditional watch.

Smartwatch sales were up 20 percent in the first quarter, amounting to just over half-a-billion dollars, said Brack.

Smartwatch sales accounted for 35 percent of total watch dollar sales in the first quarter of 2019, an uptick compared with 31 percent the previous year, he said.

Brack noted that while smartwatches are still “an important source of growth” for the overall watch market, consumers still value traditional watches.

NPD’s research found that traditional watches raked in $5 billion, more than half the $9 billion dollars spent in the first quarter of the year.

Though the report noted some growth challenges, it pinpointed the segments that were performing especially well.

Mechanical and 40mm watches, which can easily be worn by both women and men, saw double-digit growth over the past year, according to NPD.

Watches made with precious metals also recorded double-digit growth, which NPD tied in part to challenges with sourcing stainless steel models.

“The consumer is becoming better educated about the work, craftsmanship and detail involved in creating and manufacturing a living, breathing mechanical movement, resulting in an exciting opportunity for manufacturers,” Brack said in NPD’s news release on the report.

The report was put together using NPD’s data assets, including its point-of-sale Retail Tracking Service, input from watch and jewelry industry experts, and analytics that track market trends. Data on fitness trackers, like FitBit, is not included.

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