Akio Naito and Munehisa Shibasaki On Grand Seiko In America And The Future Of All Things Seiko

guys we have a very special video uh for you today we have two longtime friends of mine longtime friends of the show in from from Tokyo so please if you would introduce yourself yes uh thank you Ben uh I am AKO I am currently president of SEO Watch Corporation Japan and so that includes gr SEO and and Seiko it includes both gr SEO and Seiko so you're very important person then something like that yeah and Sir uh thank you B having me today so uh my name is muna shibasaki I'm director of senior vice president of SE Watch Corporation I'm now the Army head of Gro and also known as the best dress guy in Japan maybe in the watch industry as well um so what do we have on the wrists today so this is the recreation of the first Grand SEO back in 1960 yeah uh this was released in the year 2021 the year uh when I was appointed to be the president of our organization so was this a gift to yourself yes could be worse well when when I was appointed to be the president I uh realized that I didn't have a decent watch I ran to Wako seo's uh retail division to purchase this one amazing that's amazing and sir yes uh the watch which I wear today is the SLG w003 it's a newly uh introduced I inan this year so which is wonders so um the hbe hand winding the dress watch for the uh Grand C so cool and I'm I'm obviously wearing the hinki limited edition Grand SEO GMT that we did probably five or six years ago now and uh just an amazing GMT to to wear all the time and you actually brought some of your your own watches here today so could you talk us through uh some of the pieces that you brought okay so um I I want to first to start with this this is a very first my watch that I I gifted my mom uhhuh when I was 12 years old which is early um 19 80 so um I need to the um going to the prep school because at the entrance exam for the high school so I need and time devices do the measurement of time so sure so the um next one it will be that slq 001 is kinetic chronograph first kinetic chronograph and uh uh I love this watch because I have background of sports timing so I really love to the sports watch and uh with a lot of uh dial so this is a great one so um I have another one is the like uh bhead the old inan SEO chronograph yeah I purchased this one um the memory of uh when I was the in charge of Latin American Market sure uh I went to the Lima Peru uhhuh and uh I went to the the some store is the second market so then I found this some really prising condition of this watch so I I immediately purchase it so it's a great watch my my father actually used to wear one of those in the 70s and I have it yeah good color combination this one so yeah it's a cool one then after that amazingly I found the similar um case Style watch the isuru this is a Spring Drive chph yeah so uh this is very I mean unique construction of the case rotating case and uh very interesting watch so again so I have a sport timing uh background so this is the stopwatch is the I mean this is similar of the um the stopwatch that we are use for the Tokyo Olympic Games so yeah very nice one then uh we have two vintage second Grand CLE so because I'm born year 1969 I tried to find my Bonia watch so this is um I finally found this one a grand stle High beat so this I mean produced in 1969 and uh the same month I also find that uh this King SEO watch cushion style H this also that I produced in 1969 so I have now is the two of same age of the watch together so um I really I mean that love these two pieces because of the I mean age is same so yeah so cool yeah and uh the last one is actually not Seiko this is Gerard pero sure right and uh pocket watch so because I'm in the I was in the United States between 2016 to the 21 around five years so at the time I really need to some memory I was in US US market so I really want to buy the something related to the um US market so then this watch is the um I think produced in 1939 1940 is promotion item for the um Shell Oil yeah and yes and I really love this watch because the the story of the Shell Oil is the first this watch actually lubricant what with the Shell Oil but the leak is happening so they actually they return all the watches then I mean that they remove all the Shell Oil then I mean put in that regular watch youant in it so wow this is quite interesting the watch so still I'm inan that keeping good time so I love this one so after filming here today uh you'll be heading up to Cambridge where Harvard Business School is doing a case study they've already done a case study on the rise of of of gr SEO how how does that make you feel well uh we are truly honored but uh uh back in' 70s uh at the time of our golden age in in quartz watches right we were the first to come up with SEO Quartz ason in 1969 sure and that story was uh adopted by Howard business school as a case in early 9 I think H so this is the second time that uh story uh is adopted by H as a case which is interesting it's amazing because the the the first the first instance obviously the courts crisis as the Swiss would call it you might call it something else um was really a a a revelation right I mean it was it was a dramat it was a paradigm shift in terms of what watchmaking was at the time the grand SEO story is is something else entirely really it's it's an evolution of something that was effectively defined by the Swiss by the Europeans and then adapted by by the Japanese in your case so I mean we'll take a few steps back and then we'll kind of get into to where gr Seiko is today and where it's going how did you guys join Seiko how did you guys get to to to Seiko in the first place I joined Seiko in 1984 so 40 years ago yeah uh it didn't seem like such a long time but uh uh as a member of the inh House legal department right so I started my career at Seiko as a lawyer and then uh it was 2002 when I was assigned and it was kind of exceptional move within the organization for someone from the legal department to be the head of uh uh Australian subsidiary MH so I was transferred from Tokyo to Sydney uh to become the managing director of SEO Australia uh it was until uh 2016 uh uh I I stayed in legal department but uh I was once again asked to be transferred to us to develop the grand SEO to uh reorganize our seyo business in this market right and and when when the idea of you coming to the us to bring gr SEO here was was was brought to you what did you think do you think it would be easy did you think it would be hard well Grand SEO we decided to launch globally in the year 2010 but for a period of uh say four five years uh it wasn't going very well including this Market sure so it was a big challenge for me as a you know personally and as an organization uh nobody was really confident about developing Grand SEO in the US market but for us us Market has always been the biggest Market outside Japan and uh you know we thought uh getting into the US market was a gateway to the global watch market and we we really wanted to uh tackle that challenge mhm and so what what is it about the US that that makes it such an attractive market for for GR sea well of course we have a very long history uh under the seyo brand to be in this market and uh the brand awareness of SEO was quite strong among the consumers in the US and the the the US from from my vantage point is in in many ways uh like a youthful market right I mean Europe is is so so in granded with luxury and so ingrained with with traditional fine things that I think the US has long presented opportunity for for smaller companies smaller IDE uh you know smaller Brands to to do interesting things and when when you came here in 2016 what was the first goal what was the first mission for for bringing gr SEO here well uh obviously there is a difference between the luxury uh branding regly segment with the watch market like Grand SEO and and SEO which used to to be a mid tier department store brand mhm and for us I don't know if it's a correct analogy but uh uh take automobile for example uh Toyota decided to launch uh Lexus globally and and the First Market to be focused on was the US market where the acceptance was quite good by the same token uh we thought the American consumers are more liberal sort of uh you know compared to the conservative consumers in European market and uh we we thought uh we had a better chance of developing Grand SEO into the luxury brand uh even though the the image of Seiko wasn't that much you know into the high end taking a step back you guys have have both been waso for for many years now what what are some of the most exciting times for you before the grand SEO project oo that's an interesting question I mean you know because I'm with SEO for such a long time 40 years uh I have experienced a number of uh interesting things including when I was in the legal department I was in charge of uh uh uh our negotiation team for the Olympic sponsorship so I uh went to Barcelona in 1990 uh to negotiate with the uh Barcelona organizing commit yeah that was an interesting experience and so what what exactly was was the the result of that well we were uh the sponsor we were sponsoring the Tokyo Olympics back in 1964 right and the saporo Winter Olympics in 1972 I guess okay and the Barcelona Olympic was the first Olympics since 72 uh saporo so we were not confident uh in getting the sponsorship but uh uh a group of a dozen uh Executives uh plus me from the legal department we were there for a week and uh day by day we we were able to convince the organizing committee uh to uh win the uh sponsorship it was an interesting experience I can imagine I can imagine and and what about yourself yeah I mean uh I joined the company say called 1992 my first assignment was the sport timing Department Sports timing yeah really similarity with I mean that excitement time is for me is same as the a Olympic game so I joined the company then I assigned to go to the Olympic Games for the timing T of Alpine event so at the time I still young enough to assign to go to the top of the mountain the starting area minus 20° minus 20° yeah I have to wait for the 3 hours before that uh I mean that race start so it was excitement exciting time for me but at the time very horrible time for me too that's that's amazing and and what what products do you remember from from your time both of your times at Seiko that that you really thought were wow this is really a cool thing this is different than than everybody else well uh when I joined SEO I think to be exact uh one year before I joined the company was the uh wrist computer which came out from uh SEO many many years back uh even before the uh launch of Apple watch or any Smartwatch many years yeah yes yeah the the risk computer yeah and what did it do exactly well uh you can uh put in the program by a basic language uh and and then uh put in your schedule or uh diary or uh you know address book yeah on your wrist I'm curious how many many how many people out there know what basic is I was more of a C++ guy but basic basic works um and what about you what was some of your favorite products um actually that I bring today and the watch is the I mean kinetic chronograph uhuh SL q001 this piece is the I mean my favorite and most amazing the SEO watch so I purchased this one at the Egypt Cairo in Cairo and when I was station at Dubai I have travel a lot to the I mean I mean surrounding country so the um when I went to the Egypt because this is too expensive for Egyptian Market the when that we have a sales meeting this is always I mean the sitting on the table no one can buy it so I finally decided to buy myself to replace to the other more cheaper SE watch there so but after I purchase this I really love this because of the face is so distinctive yeah and also the very sporty type and the size is not so big I me for my list actually so and because I have sports timing the I Me backgrounds so uh that's why probably that I love this sporty watch so and what era is this from like what year was that madebe I think uh this is the 1999 uhuh is the Ian first kinetic chronograph and only um produced 1, watch wow worldwide it looks like something from 1999 it looks like very oakly wraparound sunglasses uh type of thing I see as your careers progress uh within the SEO group and and the grand SEO project you know of coming to the US kind of came to the Forefront what was your biggest concern my biggest concern back then was uh obviously we were struggling with the SEO business to be with and and Grand SEO was almost nonexistent in this market right so uh you know we didn't really have the budget to invest in developing Grand SEO uh we had to restructure the seyo business to downsize but at the same time the pressure was on us from Tokyo to to Really accelerate the growth of uh Grand SEO so so it was seen uh you know impossible to to achieve that goal within a short period of time it so if if it felt so impossible how did you do it I mean why you know why were we able to succeed because even thinking about it now and obviously you know we we were there with you in many ways as gr SEO came into the US it looking back it it felt like an uphill battle it felt like a a challenge for sure in a in a in a market that is dominated by one brand called Rolex uh and you went head-to-head with with Rox yes well um it was 2016 that I arrived in US market and you know as I explained we we had to go through the restructuring of the SEO business it started talking with uh each individual local manager and none of our people was uh confident about Grand SEO or or SEO the the morale uh within the organization was uh so you know devastatingly low and I started uh talking to people outside of our organization and I uh happen to uh you know get connected with you so I think I visited this building for the first time in 2017 ear 17 upstairs yeah yeah and and you know I was fortunate enough to be able to be connected with people who are um like watch coners watch afficionados like yourself sure who uh talked very uh positively about our brand including both SEO and Grand saquo so it was eye opening for me uh you know compared to the employee morale and nobody was confident uh those people who are very much into the watch business saw the possibility potential of Our Brands yeah well you know many years ago before then even I I I did the Seiko Grand SEO experience in in in Japan and when you see the the level of manufacturing and the finishing and the quality that that you guys do I mean again the only thing that that I could compare it to is is Rolex uh and you know so before then but certainly then you know my mind was convinced that that that you guys were very capable of doing very special things and then I think even before that the the ich products the Creator each products you know represented something so special to to a very small but very important group of collectors you know real connoisseurs people that are buying langa Patek AP phip dufor um you know there was always an admiration for the brand and I think what what what we and and other psychers try to do is is disseminate the the information in a way that more people can understand so when you realize that phip dufor came to the the studio uh with you guys to help your your Craftsman learn to finish I'll let you tell the story not me um you know you realize how important the the care and the craft that you put into to everything is so what exactly was the story with Philipe dufor and uh the ich products yes well uh for uh h to product uh our micro artist studio in Nagano prefecture uh our people started learning about the luxury uh watch uh and and the craftsmanship and our uh watch makers were open-minded to to learn from anybody who has achieved the level of skills that we were aspiring to achieve and that was the beginning of the story and so but duor came to to visit yes yeah and is he still uh would you say is he still a friend of of the brand so to speak I hope so yeah actually I met him on the last J last gphg I still he still remember about the the things happen in that se I mean that the our Factory there so that's it's really cool and and talk to us a little bit about the Ichi and ich2 product because they they really are in many ways different uh than than most of the other you know SEO Grand SEO product it's a credor not not gr SEO obviously but what is it about those things that that really elevated the aura of the brand well uh of course I wasn't directly involved in the development of H or H2 but the uh DNA of our organization uh this applies to both SEO and Grand SEO uh the Creator or the product development person uh we as a Management try to uh delegate certain uh discretion or freedom for them to come up with their own idea of uh pursuing uh what they see as an ideal uh time piece MH and I think uh it was the result of that kind of uh company policy yeah and I also remember when I was in Japan uh I got to hear the the minute repeater the credor minute repeater which to this day I think is still one of the best sounding minute repeaters out there that that Market is is that still uh is that a very important market for you guys the really really high-end uh collector based market so products like uh uh Credo complication or H2 it wasn't like us uh designing the business model to to uh throw the products into the market it it was generated by the creative uh you know watch makers so uh you know the this is our challenge as a uh management how uh we can uh sort of uh formulate the business model to be able to deliver that kind of piece to uh our uh fans mhm so coming back to the the the grand SEO introduction so what what would you say was your first kind of Big Break uh in terms of entering the the US market so uh we thought the quality of our product was good or sufficient but of course as a business uh we needed to have a good uh communication strategy distribution strategy and it wasn't easy for us because none of our uh local management was experienced in the luxury segment of the watch business M so the first step that I had to take was to to uh create a team of management who can lead uh developing grso as like brand right and and so what exactly was the strategy with with with the US market so the strategy as I explained we didn't have the enough budget to uh you know massively promote the brand uh we wanted to make use of SNS uh we wanted to organize uh various events at the uh retailer bringing in uh the watchmakers from Japan do the demonstration and through SNS and words of mouth uh I think the the brand awareness has increased gradually mhm to the point now where how many doors do you have in the United States we have a little over 100 doors for Grand SEO okay and now I mean it's it's really become kind of part of the of the fabric of of American watch collecting I would say at at least in at the at the hinki level at at the higher level you know it it's obviously objectively a success otherwise I don't think Harvard to be doing a case study on you but what were some of the mistakes that you made or what were some of the things that you wish you could have done differently yeah well uh this is the one of the management issues we are currently touching uh how we could uh streamline the product portfolio or the number of skues that have been expanded to the extent to include many of the limited edition models and so what what to to double click on that so what exactly does that mean I mean so the idea would be to compress the the the product line so that's what um nesa has been doing yes we actually doing that very I mean that we about the i product of limited edition very easy to sell out but at same time so the I mean it is difficult for I mean the making that the face of the brand like uh I mean the face of the grand SEO so we really need to established our bestelling model it's more strong model in the line mhm so um this is contradiction that uh if we are so much I mean they depend on the sales of uh I mean the limited edition I mean that uh brand will getting weak and weak so we need to really to come back to the original position to more strengthen to our pH of brand so so what can we expect from from that decision in in the future so so less limited editions more focus on core product yeah I mean I mean we have set up some core products let's say the 18 models for the over so they we like to focus on those model to more I mean that become a mainstream of the sales and of course we I think we really need to the Ian have some limited edition to the giving the excitement for the brands so yeah and I think you know another I don't want to say criticism but another piece of feedback that that we often see on our side is just that the the pricing has changed so so dramatically and when I think back to when we launched this watch I think it was 5,400 right um which today is is very inexpensive for for GR SEO the average Grand SEO price point is now I think let's say the 7,000 7,000 yeah but but several watches even from watches wonders this year are considerably higher right than that and have you seen a lot of push back on pricing or is that just a a perception yes I I think it comes with the uh difficult time for the luxury uh you know watch brands not not just us but many of the brands are are struggling uh you know in the last year or two MH yeah and so is is there any idea of bringing the prices back down a little bit or doing more kind of entry level product or not really yes well it's the the rising uh price was a result of us pursuing the um higher uh quality materials and uh more complication you know mechanism but uh being mindful of the pressure for the more affordable range uh we will strengthen the uh the qu price point as opposed to going just you know going up and up yeah yeah and what what can we look forward to with with gr SEO what are the things that that that you're most excited about yeah I think I mean that the in the talking about especially in the United Market so we are very successful launch in the ground SE in the market last five years so and uh we already sell the I mean Grand watches to the I mean most of the grand fun group or watch offici or correct us we direct to the increase our audience which is that outside of this area to the the normal people so um in order for us to more appealing to our watch to the regular people that is quite important for us challenge this yeah I mean that that's uh that's a desire of many uh and a desire of even us at hinki is like speaking to the the core group of of nerds like me is I don't want to say it's easy but it's easy enough but but watches to just people is is is a harder harder thing for sure obviously you know the Rolexes and Omega is do very well um but it's uh it's it's challenging to communicate to to to to that audience for sure one weapon uh if I may say that we have is Spring Drive the unique mechanism not available from the other brands right and you know this is something that we can draw the attention of uh uh people who are not really into the highend watchmaking mhm but Spring Drive is still expensive I mean it's still uh you know relatively speaking yes yes yeah and it it's it's also I I find Spring Drive to be one of the more challenging things to explain to people you know when you when you tell somebody to go to explain courts versus mechanical and then come back to to Spring Drive is is is oh that's our homework but uh uh we think it's uh interesting and and Innovative mechanism uh even though we have been doing it for quite some time yeah and it's its functionality as a wristwatch the accuracy and and ease of use durability is something uh you can find genuinely in in our DNA as a grand SEO yeah as we think about the the grand SEO brand today the gift of time is something that that we hear often I would say tell us a little bit about that and the the origin of it and kind of what it means and what we can expect yes well uh it is a I think an important point of difference as a brand uh when when people compare Grand SEO with uh brands from the European market uh notably Swiss Brands uh we are from Japan and there has been a growing interest uh all over the world toward Japan or Japanese culture Japanese tradition so we think as a Japanese brand we have a mission of communicating to the world world uh what we stand for as a Japanese brand and one of the projects we have been engaged in is the movie uh entitled The Gift of time and this is a story uh created by a production uh company headquartered in San Francisco so the American Crew shooting the film and four Japanese uh creators of today they talk about the concept of time uh in and in the Japanese culture M and something interesting intellectually interesting I think uh and it goes beyond just selling Grand seo seo as a product but try to communicate the Japanese spirituality uh to the world and where can this be be seen uh this can be seen uh on YouTube okay very very cool um and then in terms of what you want the legacy of of Gran SEO to be now 5 years from now 10 years from now maybe many years after you retire what what do you want the world to think of the work that you've done here with gr Seiko in the US and and abroad well uh as I said uh gr SEO is from Japan and uh something unique to the Japanese tradition Japanese Heritage so as a uh representative of a luxury Gip brand from Japan uh something that uh people from all all over the world uh will uh love and aspire to own and that that kind of positioning the brand we like to establish in us to come mhm and yeah I think I mean that uh uh I mean ground CLE uh I I ground and SEO and uh I think I mean that uh the the philosophy of ground SEO is the nature of time we are keeping this very bold statement of uh philosophy of grand SEO at the same times we would like to little bit diversify this uh um the philosophy to the uh more appealing to the younger generation and uh little bit more excitement giving to the uh new audience and uh eventually because I'm I'm business person we' like to increase that the market share of the guys thank you so much for for joining us here in New York today um you know we look forward to sharing the Harvard Business case study with with the audience when when we air this and congratulations on on all the sucess here thank you