By Jessica Rabe, DataTrek Co-Founder and resident millennial
I recently bought my first nice watch. It’s not that I didn’t like them until now. I just couldn’t justify spending +$500 on a basic function that my equally expensive iPhone could provide.
That is until I came across a startup called MVMT, which specifically caters to my generation of millennials. Their offerings look like luxury watches, but cost a fraction of the price at around $105 to $300. It may not be a Rolex, but the shopping, delivery and ownership experience still feels special. My order came in slick packaging and the watch itself is beautiful.
Don’t worry, this isn’t an ad, but it is an object lesson on how a mature industry can still overcome tech-enabled disruption. Cell phones and fitness/smart watches were supposed to displace analog watches, especially among my tech savvy cohort. But let’s be honest, most people wear them as a statement piece, not to tell time. Mechanical watch companies sell an image and status, which is how Rolex and the like continue to sell out many of their models worldwide despite price tags of +$10k.
Analog watch companies’ success can only continue over the long run, however, if they feed the pipeline to their upscale products. And in that lies an important case study for financial advisors who in many respects face similar challenges as they also try to tap into their next base of customers. Here are some key lessons on how they can also reach millennials:
#1 – The biggest challenge for financial advisors bringing on millennial clients is that they do not have as much money as their wealthier parents and are therefore less lucrative clients in the near-term. The benefit of watch companies as opposed to financial advisors is that their product is much easier to scale, so they can afford to offer low cost alternatives. Movado Group, for example, recently bought two watch startups – MVMT and Olivia Burton – that were founded by and for millennials. The Chairman Efraim Grinberg’s reasoning: “You have to make something that they can afford… the key is getting them engaged in wearing watches as an accessory early on… One day the ones who can afford it will move into better watches as well”.
Therefore, the founders of MVMT’s goal was to offer “radically fair prices”. We know financial advisors cannot make a living off that strategy, but this is why many major financial services institutions – Fidelity, Charles Schwab, Vanguard, etc. – now offer entry-level robo products. Millennial customers who cannot afford traditional services now will eventually move up the product/service chain as their earnings power grows over time. Once they have more money, they will likely stick with who was there for them early on in their adult life.
#2 – In order for financial advisors to reach millennials, they need to be present on social media, including Twitter and Instagram, every day. Movado is taking a page out of MVMT’s playbook on this count, as its Chairman described: “They have built a fantastic community and following. Their content appears on their site, on Instagram, on Facebook, on You Tube, on social media platforms. That’s the communication of today and the future with consumers. That’s something that we want to do across our brands and company.” This strategy clearly worked with my demographic: MVMT was founded just 5 years ago and sales last year totaled $71 million.
The upshot: wealth advisors should grow their social media follower base as large as they can. That’s mostly how millennials get their information and communicate. Another important lesson from one of MVMT’s founders is that “one source of the rap that millennials don’t like watches is that watch brands were not reaching out to younger consumers”. Financial advisors need to also innovate and go to young adults directly.
Moreover, wealth advisors can’t expect all their followers will use their services, but any conversion is a win. For example, MVMT has 3.5 million followers on Facebook and 1.5 million on Instagram, and has sold +1 million watches on its site.
#3 – Effective messaging to millennials will look different than financial advisors’ outreach to their parents. MVMT’s founders had a mission to: “create a brand that people felt cool wearing… And had a story about what the brand represented. We wanted a brand that hit an emotion. And that emotion is this aspirational lifestyle”.
They portray their values by promoting the brand with slogans, such as “Live life on your own terms” and “#letsjointhemovement” (MVMT is pronounced as “movement”). One of their founders said: “If you go to Instagram or Facebook, you see lots of image-heavy, captivating things that you haven’t seen before. That was always something we wanted to do.” A couple of their recent Instagram posts capture a man’s arm petting an Elephant’s trunk and another canoeing with a mountainous backdrop while wearing MVMT watches.
Financial advisors’ posts do not need to be as exotic, but they need to offer quality content that helps educate millennials and similarly strike an emotion that resonates with them. That means using pictures and wording that empower them financially to believe they can live how they want.
Bottom line, if a mature watch industry can excel despite tech-enabled disruption and win over millennial customers, financial advisors can too. It will just take much more effort and creativity to feed the top of their sales funnels than in the past. Once they crack that code, the right customers will come.
Lastly, we strongly encourage you to read the interview with MVMT’s founders and Movado’s Chairman here on HODINKEE.