The watchman in Beowulf helps to characterize the epic hero through deciphering his statements regarding Beowulf.
Never have I seen in the world a warrior like that one among yourselves--a hero in his armor! He is no henchman.
It is through this indirect characterization (a description of a character which readers must infer (make an educated guess) about the character since it does not openly characterize the character) that readers are able to characterize Beowulf. Readers can infer that Beowulf is the greatest man among the warriors. The fact that the watchman is able to pick Beowulf out of the numerous men speaks highly of his stance and physical appearance. The watchman immediately recognizes that Beowulf is a hero. The watchman goes on to state that Beowulf possesses a "regal bearing." Beowulf's physical appearance is so striking that he is immediately identified as possessing a noble connection.