How Will AI Impact The Watch Industry?

For years, artificial intelligence, or AI, has been the stuff of science fiction, most often seen as a sinister force that heralds a dystopian future.

Well, it's 2023, and AI is well and truly here. But rather than the all-knowing intelligence of fiction, the implementation in the real world is focused on generative AI. This catch-all term encompasses a range of algorithmic machine learning tools that parses vast amounts of data to learn how to create near instantaneous output.

This type of AI tool is only a few years old, but already it's incredibly popular. A McKinsey survey from August 2023 noted that, less than 12 months after tools like Chat GPT became available, one-third of respondents used generative AI tools in business. That number isn't going down any time soon.

So, how will this emergent technology impact the famously slow-moving and traditional world of watchmaking? Let's explore a few possibilities of how AI tools will impact watch retail, consumption and production.

AI and watch retail

These emerging AI tools are powerful for luxury watch retailers, especially watch retailers active in the online space.

What generative AI excels at is not the automation of tasks, but the augmentation and acceleration of those tasks. In the best-case scenario, AI tools aren't replacing people; they're amplifying what those people are capable of. This could mean more effective identification of audiences, better analysis of consumer behaviour, as well as enhanced marketing content — from exceptionally tailored, personalised communications using AI-generated insights. From an internal point of view,

these tools would also be powerful in helping manage stock and inventory, spotting trends in sales data and allowing the retailer to be more responsive and effective. From a retail space perspective, AI could analyse store flow, and assist in optimising layout and staffing. Speaking of staff, AI could also be well deployed for responsive staff training, as well as be a powerful tool for sales support. Within moments of a new customer walking into a store, the sales associate could be supplied with comprehensive information about the watch on their wrist, consumer profiling and other invaluable sales tools.

AI and the watch customer

How can AI technology help out the hypothetical customer in that scenario? In addition to tools which will allow collectors to track the value of their portfolio or use AI tools to ensure authenticity or to keep an eye on trends or new models entering the market, the big prediction for generative AI as a consumer-focused technology comes down to personal shopping and clienteling (the industry jargon term that essentially translates to sales associates building strong relationships with key clients). In many ways, the use of AI for retailer and consumer represent two sides of the same coin. But AI has the capacity to take a much more active role as a personal shopper.

Luxury fashion conglomerate Kering's crypto-focused marketplace KNXT features /Madeline, a ChatGPT-powered personal shopper who aims to guide KNXT customers through the site and its available items, as a tool to help time-poor customers cut down on endless scrolling and focus on items they might actually be interested in. It's easy to see how this sort of tool would be relevant to the watch space. But it comes with a caveat, too. ChatGPT is, by very definition, an aggregate. It relies on the received wisdom of countless opinions scrapped from the internet. This gives it an exceptionally safe sense of taste. Unless you spend a lot of time refining and refocusing the chatbot's responses, you can expect to get a lot of very conventional responses — "looking for a stainless steel sports watch? How about a Royal Oak?"The suggestion isn't wrong, but it isn't particularly insightful. For now, at least, an artificial sales associate is no match for the real deal.

AI and watchmaking

While the path forward for the implementation of AI technologies in for buying and selling watches is fairly clear, a powerful evolution of existing practices, the role of these tools in the design, research and development of watches themselves is less straightforward. Yes, AI tools will play a role in inventory, stock control and supply chain analysis, but when it comes to designing new watches, the future of AI is far from certain.

That's because there's a range of legal considerations around the use of AI technologies, and large companies and corporate entities are typically keen on avoiding any legal exposure. At the heart of many of these legal questions is the fact that AI tools are exposed to truly staggering amounts of data. This is where it gets tricky. Say a watch company used a visual tool like Midjourney to design an integrated steel sports watch. That AI tool would scrape all the images of similar watches and come up with designs. Those designs would be based on images of other integrated steel sports watches. Images that represent intellectual property not owned by Midjourney or the watch brand looking for a new design. Now, if someone were to create this design mock-up to post on Instagram, that's something likely covered by fair use law. But to use it to create an actual, commercially produced watch is something else entirely, and a risk many companies are unlikely to take.

In the future, we may see generative tools that are more rigorously compliant with the data they use to 'learn', or have more robust terms of service. It is also entirely possible that companies will develop tools that exclusively use their own intellectual property — after all, watch brands are famously proud of their decades deep archives.