During last year’s holiday season, sales of smartwatches outpaced those of traditional watches in the United States for the first time ever, according to respected watch industry tracker the NPD Group.
“That was definitely a milestone,” says Reginald Brack, NPD industry analyst for watches and luxury. “Smartwatches are such a heavily gifted item, so it makes sense that they would do well over the holiday. But that was the first time we have seen that result.”
However, in the first quarter of 2019, traditional watches raged back, capturing nearly two-thirds of the watch market, said NPD. Watches made with precious metals saw a double-digit gain, due in part to problems sourcing steel.
“All signs are pointing to traditional watch sales doing really well,” Brack says.
Smartwatches still claimed about one-third of overall watch sales—not a bad result for a category that is only about 4 years old, says Brack. He notes that, even in the first quarter, smartwatch sales saw more than 20% growth. In addition, three of last year’s top watchmakers—Apple, Samsung, and Fitbit—sell only smartwatches.
“Their market share is definitely growing,” says Brack. “What’s great about that section of the market is that it’s bringing new users into watch purchasing. While it is cannibalizing that $500-and-under segment, it’s not cannibalizing traditional watch buying. It’s really bringing someone who hasn’t been a watch wearer to get used to wearing something on their wrist.”
While NPD has found that most smartwatch wearers are younger, there is growing adoption from women and affluent buyers, he says.