US President Barack Obama was in a gift-giving mood last week in London. He presented Queen Elizabeth II with an album of photos of her meetings with former presidents, and he gave British Prime Minister David Cameron a watch from Detroit.
The watch was built by the luxury watchmaker Shinola. And President Obama’s gift was a marketer’s dream — the company is actively trying to expand its European sales.
Since its founding in 2011, Shinola has grown into a leading US watch manufacturer with $100 million in annual sales, in part by building an attractive product, but also in part by aligning its image with a gritty, re-emerging Detroit. The company has been a bright spot for Detroit, a story of resurrection and a return of new manufacturing to America's manufacturing city.
The marketing strategy has worked well in the US. But will the Detroit comeback story sell watches overseas?
At the Shinola factory in midtown Detroit, Myra Mosely paints the sides of leather wrist straps. She used to work nearby in the auto plants. Here's what she wants people in Europe to think of when they hear about watches built in Detroit.
“They’re built to last. We’re building it from our heart. And I see people say, ‘Oh, you have a Shinola watch.’ I go, ‘Can I see it?’ I know that I put my love on the side of it. So each part that comes down, I’ve touched, each and every part,” said Mosely, who was getting choked up. “I love this job. This is the best job I ever had.”
Next to Mosely, a worker stamps the name “Detroit” onto every strap.
“Detroit is awesome. It’s coming back. It’s stronger than ever,” Mosely said.
Shinola began with 20 employees four years ago. Today, they have more than 500, most of whom are in Detroit. The watches are built there by people using tweezers to put tiny components in place, more than 100 pieces in some watches.
Shinola watches sell for between $475 and $1,125. The company also sells leather goods like wallets and purses, as well as bicycles. But it remains best known for its timepieces. Former President Bill Clinton famously bought 13 of them and gives them out as gifts. He described the watches as “elegant and informal.”
But watches are about more than just style, or telling time. We also care how they make us feel; what they say about us, or about us as gift-givers.
“All watches are about equally accurate. But what’s really different is the marketing,” said Erik Gordon, a clinical assistant professor at the University of Michigan’s Ross School of Business. “It’s no coincidence that the full-page ads in fashion magazines, and men’s fashion magazines, are from watch companies.”
Shinola is selling its watches in key European markets from London to Paris to Berlin. It also recently began moving to smaller markets like Stockholm. I was there recently and on the lookout for people wearing nice watches.
“I’m wearing a Regal watch,” said Fredrik Möller, who works for the Swedish government.
And what would a watch built in Detroit mean to him? “For me it doesn’t really mean anything because I don’t connect clocks with Detroit really. If it was a car, maybe.”
Most everybody I met in Stockholm was puzzled by what a Detroit-built watch is supposed to say to them.
There’s a key distinction to be made here: Shinola deliberately says its watches are “Built in Detroit,” not “Made in Detroit.” The Federal Trade Commission requires that if a company wants to use the “Made in USA” label, or in this case, “Made in Detroit,” the product must be “all or virtually all” made in the US.
For Shinola’s watches, the movement components are made in Switzerland and Thailand. The hands and dials are made in China and Taiwan. The nylon strap material is made in Japan. The leather is made in Michigan, Maine, Illinois, and Florida.
Shinola argues that it is fair to say “Built in Detroit” because, well, that’s where its watches are assembled, crafted and designed. Critics have said that Shinola could get the raw metal and cut them into tiny parts — gears, springs and screws — if the company really wanted to be genuine in its claim.
One Kansas City watch company, Niall Luxury Goods, did get in trouble recently with the FTC for overstating its American-ness. So it added the tagline, “with Swiss movements.” Despite the legal guidance with that case, Shinola is sticking with its “Made in Detroit” slogan.
Back in Stockholm, I asked several people what they associate with Detroit.
“The car industry, bankruptcy,” said Gunnar Söderholm.
“The first thing I think about is actually the Detroit Red Wings, because it’s my favorite NHL team,” said Felix Formark, the CEO of Sjöö Sandström, a high-end Swedish watchmaker.
Formark has seen Shinola’s products at international watch conventions and said, “I really admire their work and their aesthetics, and how they’re actually choosing to put the brand on the market.”
But, does he think Shinola watches, and the Detroit label, will sell in his country?
“In Sweden? No. I think they will have difficulties.”
Formak knows first-hand: It’s tough to compete with the Swiss on luxury watches. It’s even tougher when people have negative associations with your city, like the Detroit bankruptcy.
Bridget Russo, Shinola’s chief marketing officer, wasn’t worried about my small, informal study in Sweden. She says they’ve used Detroit’s bankruptcy as a positive. And Russo thinks the Detroit comeback story will sell well in Europe too.
“Overseas, some people may say, 'Well: Who cares about Detroit outside of Detroit?' And the reality is: Detroit is symbolic. It’s a sign of hope, there’s a Detroit everywhere. If you talk to people in London, they say, ‘Oh, Manchester, Glasgow.’ Everyone wants the underdog to win.”
Russo says they have another European strategy beyond selling gritty Detroit: letting the product speak for itself.
Shinola is trading on some past marketing wins, too. The name used to belong to an American shoe polish company that began in Rochester, NY in the 19th century. The product became associated with the phrase, “You don’t know sh*t from Shinola.” (Translation: Shoe polish and dog deposits look similar, so if you can’t tell the difference, you must not be too bright.) The modern watch company bought the old Shinola name.
From PRI's The World ©2016 PRI