Gen Z’s fascination with luxurious watches has been one of many extra shocking shopper traits of the previous few years. However a steep tariff hike on Switzerland may threaten its market: American youth.
Gen Z—alongside youthful millennials—have embraced luxurious timepieces as standing symbols, posting them on TikTok and Instagram and serving to reshape an trade lengthy dominated by older collectors. A latest BCG survey discovered 54% of Gen Z respondents had elevated their spending on luxurious watches since 2021, and Sotheby’s estimated practically a third of its watch gross sales in 2023 went to consumers 30 and underneath.
However a brand new 39% U.S. tariff on Switzerland may make this pastime costlier, and probably much less attainable for first-time consumers. The responsibility, imposed throughout President Donald Trump’s newest spherical of tariffs, hits the world’s most vital marketplace for Swiss watch exports. From January to June, the U.S. overtook Japan and China as the highest vacation spot, with $3.17 billion ( 2.56 billion Swiss Francs) price shipped, in accordance with the Federation of the Swiss Watch Business.
“Firms can’t realistically take in the tariff, which suggests retail costs within the U.S. will rise sharply,” Marcus Altenburg, managing companion at Swiss regulation agency Goldblum & Companions, informed Fortune.
For American consumers, particularly youthful ones, the maths is easy: costs are going up, Anish Bhatt, a millennial “watchfluencer” with 1.6 million followers on Instagram informed Fortune. Whereas the 39% levy applies to an importer’s price, not full retail, trade analysts predict a 12%-14% improve in retailer costs if manufacturers go on the associated fee to shoppers.
“For a lot of American collectors, the 39% tariff immediately turned new releases from Swiss manufacturers right into a luxurious few can justify,” Joshua Ganjei, CEO of European Watch Firm in Boston, informed Fortune. “The pre‑owned market is now the most suitable choice for worth and rapid availability—no import complications and no sticker shock.”
That shift to secondhand is already underway, since availability within the main market is so restricted, Bhatt stated.
Nonetheless, a 2024 report by Watchfinder & Co. discovered 41% of Gen Z aged 16 to 26 got here into possession of a luxurious watch the earlier 12 months—and people on this age bracket who’re prepared to purchase a luxurious timepiece stated $10,870 can be the start line for his or her subsequent buy. The identical report discovered that Gen Z watch fanatics acquired a median of two.4 first-hand watches and 1.43 pre-owned in 2023, with over half shopping for for themselves.
Altenburg expects Gen Z and millennial consumers, who are usually extra value‑delicate than older collectors, to gravitate to home pre‑owned and gray‑market sellers to sidestep tariffs. Ganjei stated his firm has “seen a dramatic improve in buying quantity over the previous few months as U.S. consumers draw back from worldwide sellers.”
Alternatively, watchfluencer Bhatt stated youthful shoppers nonetheless crave the “social forex” that comes with a Rolex, Patek Philippe, or Audemars Piguet, even when they pay extra to get it.
“Additionally they perceive the standing that it provides them,” Bhatt stated. The social cachet of a Swiss-made watch performs out each day on social media platforms like TikTok, Instagram, and influencer channels, boosting aspirational demand, he stated.
Bhatt doesn’t count on demand for probably the most coveted manufacturers to fade, however says mid‑tier Swiss names with out prime model status may see gross sales gradual. The added price might also push People to purchase whereas touring in Europe—the place they will generally reclaim worth added tax (VAT)—and produce items again themselves, probably avoiding tariffs altogether, Bhatt stated.
“It could possibly be that allocation of items is shifted towards different territories over time,” he added, “as a result of they see demand improve in Europe or the Center East and diminish a bit within the U.S.”
For the Swiss trade, the stakes transcend sticker costs. Altenburg warned that sustained U.S. weak spot may strain employment and provide chains in watchmaking areas, whereas forcing manufacturers to rethink distribution, pricing, and even company buildings to blunt the tariff’s affect.
Bhatt thinks advertising to youthful generations can even matter extra in a cooling market.
“When the market’s excessive, they rely simply on model worth and model identify,” he stated. “When the market is low, they want individuals to know the rarity and complexity and problem in producing these uncommon watches.”
All stated, the tariff in all probability gained’t kill Gen Z’s fascination with luxurious watches—nevertheless it may redraw the roadmap for the way and the place they purchase them.
The social media posts of classic Daytonas and Nautiluses are unlikely to vanish. What could change is that, for a lot of younger People, the product could more and more be secondhand, and presumably stamped by a boutique in Paris or Milan.
