Doomsday Coming For Wrist Watch Retailers?

Doomsday Coming For Wrist Watch Retailers?

Doomsday Coming For Wrist Watch Retailers?   watch buying

Watch brands are systematically killing off their network of authorized dealers that historically have helped them so much. One by one, retailers get ominous letters in the mail informing them that a long-term partner will no longer be sending them inventory. Why are the major watch brands doing this? And what does this mean for the future? Read on...

After years of struggle, and a complex accumulation of factors, the industry of selling watch is about to rapidly change. It isn't so much a matter of a black and white distinction (in terms of one thing is totally in and another thing is totally out), but the old business model is more or less - dying a slow, painful, and less than quiet death. Here is how it used to be - for well over 100 years. Watch brand sells watch at wholesale rate to watch retailer (known as the authorized dealer). Watch retailer sells the watch for the retail price and keeps the difference as its profit (usually about 50%). In exchange for buying watches from the factory before they are sold to consumers, retailers often (but not all the time) get exclusive rights in a particular area or territory in which to sell the watch. It was a win-win situation for people making watches and people who have the ability to sell the watches. This is the way it was, and people were happy (as long and consumers were buying watches that is).

Then came the Internet. At first, the one dimensional virtual world was merely a place for information dissemination. Fans might discuss watches in primitive forums, and some enthusiast communities sprouted. At some point after that in the mid to late 1990s, people started to buy and sell watches online. The borderless Internet didn't care about things like territory or manufacturer restrictions on prices. People bought and sold pre-owned watches, retailers sold hard to sell watches online at a discount, and the gray market which existed outside of the authorized dealer / watch brand relationship flourished. Then also came the sophistication of the replica market. Able to offer goods that used to be only available in seedy areas, online to compete with authentic items, and confuse consumers.

Doomsday Coming For Wrist Watch Retailers?   watch buying

Things started to get bad for retailers who initially were excited about the prospects of the Internet. Not only were they barred by the brands from selling online, but online shops were undercutting their prices (an profits). Online retailers experienced lower cost businesses without the traditional overhead costs, and gray market goods could be cost at almost any price over cost, with no brand restrictions. This made doing business online very attractive. Though the biggest attraction of the Internet was the worldwide market. Instead of just the people who came into your store, you could do business with the world. Sure stipulations and complexities applied, but the Internet seems like the end of the retailer.

Brands and retailers fought back. Not very well, but they fought. Brands pressured consumers not to buy online, and threatened to remove warranties on products not sold in the traditional manner through retailers. Retailers communicated the value of service, personal treatment, and after-sales support to consumers as a way of getting people to buy from them. Perhaps those promises would have been enough if they could deliver. Lowering profits meant lower wages, and watch sales people quality plummeted. There are still good watch stores out there, but for the most part, good ones are few and far between.

Internet shopping was easy, efficient, no pressure, allowed for quick research, offered a world of choices, and was cheaper than buying in a store. The only advantage many stores still had was the support from the brands and the newest watches. That and the fact that many consumers actually want to touch and see watches they want to buy. Which is partially where I come in. In addition to notifying consumers about new products, I also offer advice rich reviews and actual product images. With sites like aBlogtoRead.com, you could conceivable learn about, research, and buy a watch all without every stepping into an authorized dealer's store.

Doomsday Coming For Wrist Watch Retailers?   watch buying

Watch brands understood the major problems facing them and their business model. The Internet wasn't going anywhere no matter how much they ignored it, and it was only a matter of time until they had to deal with it. Brands had no experience with the internet. Most brands didn't (and still don't) know how to do anything but make watches. To a large degree, their problem with dealing with the Internet is one of justifiable ignorance. That and the fact that they couldn't look to others for examples on how to deal with this issue. While the economy remained pleasant from 2001-2007, they just puttered along more or less happy.

Then the economy tanked. I mean really tanked. It was hell on the luxury watch industry. Companies started laying off people like it was fashionable, and many doors closed for good. The global financial meltdown killed the desire to spend excessive amounts of money on luxury goods, especially watches. It was a do or die time to think about the future and form a new business model. The brands had a couple of problems. First, the Internet was screwing with their pricing models and their relationships with their retailers. Second, they were bloated. Overall, many of them had too many redundancies, inefficient cost structures, and a reliance on unreliable suppliers. It was really time to change things, especially while they didn't have watch sales to worry about.

Change first came internally. Many brands started getting wise to "doing it themselves." You see more and more brands with in-house movements, marketing departments, and a tendency to rely on outside suppliers as little as possible (which is still a lot in many cases). If you do use suppliers, then it is very attractive to visit China, where goods are often 50-70% of the quality, for 20-40% of the price for Swiss or other European parts.

Doomsday Coming For Wrist Watch Retailers?   watch buying

Brands also took a very close look at the Internet and what it was doing. Are people buying watches? Are they buying expensive watches? The answer to these and more questions was undeniably "yes." Marketing was cheaper online, and setting up shop was easier as well. You could have a simple website with an e-commerce component and theoretically sell your products to people all over the world (and while watch brand websites still are horrible to navigate and slow, things are slowly changing). The only problem was the traditional retailers. The existing network of stores all over the world each with their own promised territory or expectations. Internet retailers would obviously compete with brick-and-mortars ones - no questions about it.

How to resolve the problem? The brand could sell directly to consumers online and make a deal with existing retailers to cut them in. Alternatively the brand could directly sell online and have their own brand owned stores. That way there was no competition and you could have inventory placed all over the world. More important, you wouldn't have to split profits with retailers. The new model looks like it had no place for third-party authorized dealers. Ethically a lot of issues exist. You remove a brand from a store that is selling there and you can easily force a business to shut down and put people out of work and livelihoods. Regardless, business needs dictate actions. So you know what is being done.

Terminating relationships with third-party retailers also solved a few other problems. Because there was no more wild card authorized dealers selling unsold stock into the gray market, the gray market would eventually not include their brands, or only include pre-owned models. This way pricing was much better regulated and you could feel more confident that there was price consistency. Also, you could have a very linear marketing approach. Advertise online and the ad could link directly to e-commerce site, and consumer could buy a watch right away. No longer would you need to rely on a consumer to proactively "call for more information."

Doomsday Coming For Wrist Watch Retailers?   watch buying

While much of what I am explaining is a quick and dirty simplified look at the history and state of the industry, this is exactly what is happening right now. I am making it a point not to mention specific brands, but you are going to see more brand boutiques and online sales direct from brand very soon. Brand owned boutiques will take over much of the need that third party stores used address. The brand boutiques still serve an important function. Not only for inventory, but also for people who need to physically see watches and want that in-store sales and service experience. That type of need or customer request isn't outmoded, so it should still be available. Only now, it will be the brands themselves that facilitate it.

Currently, authorized retailers all over the world are having their status as authorized dealers stripped from them. Brands are finding any little reason to do so, or are simply pulling the cord on the relationship. All of this is in preparation for an onslaught of brand boutiques (first in major markets and cities), and of course for online brand sales. Does this mean that every authorized dealer or independent watch retailer will go extinct? No. They will still be helpful as many of them have excellent customer relationships and placement. But they will be much less common. Also, smaller independent brands that don't have the resources for such ambitious plans as the major companies will find new welcoming doors at retailers that traditionally would have shunned them.

The future as I see it will be very different. Major watch brands will have their own brand boutiques all over the world and offer direct to consumer online sales. Prices will be very static, and the gray market will shrink significantly (unless the brands themselves feed that market). The remaining independent watch retailers will carry smaller brands, and be harder to find. In addition, new businesses will pop up to help small brands get online and market themselves properly for worldwide sales. There are a number of logistical and legal issues to figure out, but it is all coming sooner than you might think to a place near you. As of now major brands have begun to offer online sales. They still aren't as smooth as they should be, but the slow to change watch industry is seriously changing course.

21 comments
terencekuch
terencekuch

I guess I'm part of the watch-sales-model problem, and I've been thinking about that. A couple of months ago I saw a Bell & Ross round-case model in a chain-jewelry store window, went home and ordered it from Amazon. Seeing it "in the flesh" made the sale for me. I didn't buy in the store partially because of price (although they would probably have given me 20% or so off), but because most of these shops aren't pleasant to deal with, and the clerks don't know as much as one page on the Web does. (The single-brand shops such as Montblanc's are a different story - and better.) I believe the 'showcase' model of retail is where we have to end up. The problem is making any money doing that (as Best Buy has discovered.) .

CG
CG

Boutiques will die quickly... why should, I as a consumer, run all over a major large city to look at two or three brands I'm interested in; when I could go in one retailer and see all three... Boutiques just by their supposed exclusivity will limit territory to only large metro areas where the company brick and mortar stores are... it just doesn't make sense to kill off a huge network of retailers in this economy who have already invested in the product with up front cash. High end watches will surely limit sales with this approach.

Laurent
Laurent

I'm completely in line with your analysis, it's cruel for retailers because it's true that they helped many brands to be where they are but having said that today most of them do not bring enough value compared to their margin, during the bullish year they haven't been able to question their position and now their situation is very tricky...

Marc
Marc

As I read this article, I couldn't help thinking of Swatch. This is the exact thing they are doing, they have their own brick and mortar stores all over the world and swatch stores on line for many countries. It's already there and working.

Pete
Pete

Hi Ariel,
The fact that many major brands have decided to close many retailers and open their boutiques is NAUSEATING!!!
They are showing the whole world that they are GREEDY,SELFSERVING,LOW DOWN AND DIRTY!!!
Every single one of the brands have gotten to be where they are now because the independant retailers have worked very hard and invested their hard earned money to put them there,not to mention decades,some even half decades or more!

They have made BILLIONS and are not content. They should be ASHAMED of themselves! It it GREED and AVARICE at the UGLIEST FORM!!! The watch industry should know of this.
If it was not for the independant no one would know who they even are!!

sandrine szabo
sandrine szabo

going online does not imply lowering down prices. I would not advise them to change the prices! To be good at what you do online, it takes a lot of ressources. Internet is not "cheap" as most people tend to think. To do a good job, breathtaking service, extraordinary community management...it is costing a lot!

C Kelleher
C Kelleher

This is a great article, and my question is how will this predicted shift to relatively strict enforcement of MSRP by larger manufacturer's corporate boutiques and online stores affect pricing?

The gist of Ariel's article and most posts seems to be that prices will fall a bit, but for an alternate take, the admittedly unreliable "Watch Snob" columnist over at Ask Men opined recently that Omega's trimming of its retailers was to be soon accompanied by a massive increase in their pricing, as they are evidently tired of being seen as the "poor man's Rolex". Here's the link:

http://www.askmen.com/fashion/mens-watches_500/558_watch-snob-whats-happening-to-omega.html

sandrine szabo
sandrine szabo

Interesting article ariel ;-)@netinfluence
As you mentioned, the brand boutiques are going to pop up. In fact, I think the model of brand boutiques is flagship. A kind of magical and experiential boutique taking people into a unique brand experience such as Guerlain does for instance in paris. But not all the brands will be able to afford it.
is to take the best out of the offline experience into online.
This is what to expect from next online maturity. eShop is fine but for most I have seen, it isn't bringing any such experience. Basic and ugly, they either provide flashy unusable experience or crapy basic shop experience.

I think the ecommerce is what less evolved since amazon set the scene in 1994. Therefore, it is where we should await the biggest change in the coming years.

I believe, customers want great experience (zappos style), personal contact, usable and modern internet site and feel unique when taking the experience.
This is very much in this direction we are working with J. & Marvin.

Retailers haven't really proven efficient for small brands.
The big brands get the big places and often, small brands, less known by retailers are only used to feel gaps (often price positioning) the others don't cover.
So having efficient distribution channels when you are small is tough.
And I don't believe this is only due to the profit shrinking.
Man 40% still is a really huge profit share! Most other businesses get far less and yet it does not prevent them from offering great service.

So retailers who care and do things that matter will not disappear. Maybe it is time they start to consider a somewhat more active way to consider their business.

I once went to a retailers to purchase my husband's watch for our wedding. The lady starred at me from head to toes, barely opened the mouth and was just so reluctant to give me advice, that I went out of the shop watchless.

in 2010 customers expect service.
Online shops are going to improve their service, more experiential.
So as to retailers, it might be up to them to consider how they want to evolve. But do they really wonder yet?

Jerome Pineau
Jerome Pineau

Ariel my friend, home run here. We at Marvin do take a rather offbeat approach to online sales as I tried to describe here Ariel, I think you hit a home run on that one ;) - Even Longine jumped in the pool yesterday if I remember correctly with its new eshop. I don't really see doom & gloom for retailers - until the day you can transmit touch and smell over the wire :) At Marvin we have a relatively unusual position regarding web sales - you can read it at http://backstage.marvinwatches.com/2010/04/09/the-eshop-might-just-be-your-friend/

I dont believe retail and boots-on-the-ground locations will vanish - I tend to think online activity will re-enforce them if properly presented and integrated (the last part is so important).

Doing e-sales just to undercut retailers is, IMHO, sheer madness.

Best,
J.

Olivier MULLER
Olivier MULLER

Great articles generate great comments. That's what I call an in-depth article, dear Ariel. Thanks for the work & research done for it. You raise the bar of watch-makng journalism, just like we try to do @ The Watch Lounge. Cheers !

Olivier

Columbo
Columbo

GREAT article, very BOLD-- you made a lot of enemies today.

Columbo style, there are a few things that still bother me...

Hi-end Bricks and Mortar retailers pay a tonne for real estate in prime locations-- (think board walk and park place), that's one of the reasons why their margins are so deep. Therefore, a brand's internet "virtual store" and marketing efforts must create more foot-fall for the bricks and mortar retailers than they currently experience, in order to justify reducing their current retail and/or distributor margins. Volume will need to compensate for value. To do this, however, (like you say in your article), the pricing will need to adjusted downwards (and especially because today's consumers are becoming very savvy/aware of the actual cost vs. retail price of the hi-ticket items they are purchasing).

But small independent brands like ourselves who are limited by the number of pieces we can (or want) to produce each year will have a hard time exchanging volume for value.

Hence the grey market will only disappear if the delicate balance between price, supply and demand is managed properly by the brand and executed properly by the retailer (on-line or otherwise).

Another thing-- I believe the internet has made brands more accessible to the client and today's client very much enjoys the direct contact with the creator. Therefore, contrary to your prediction that smaller, independent brands may be more reliable on bricks and mortar retailers than the bigger brands in the short term, I do not believe that is the case.

In the last year, we have experienced more clients coming directly to us via our website than ever before. And they want the full monty-- to come to our showroom, meet the creator, feel privileged, BUY DIRECT and be able to "tell the story". So while I do believe (as it appears you do) that its easier today for a large brand like Cartier to sell on line (because of its heritage and long-standing reputation), I also believe that the Cartiers and Lussori's of the world are trail blazing at rapid speed and soon the consumer will trust even the smaller brands because they will be used to doing business on-line.

I am not sure, therefore, that the remaining indie watch retailers will be carrying the smaller brands only.

In my opinion, this is not dissimilar to the existing problem that retailers have faced for many years. They play a very significant role in supporting and growing a brand, then when the brand is strong enough, it opens its own retail shops. The brand argues that creating a dedicated brand environment helps the retailers' business by allowing the consumer to experience the brand in its own environment, increase the consumers' affinity and loyalty to the brand, etc.

In this way, the brand's website plays a similar role to its Bricks and Mortar dedicated brand shops.

But in both cases, it can only help the retailers business (or at least not adversely affect it) if the pricing is static.

The net-net:

The internet has made clients more knowledgeable about the watches they desire, and this includes more knowledge about the real costs and margins.

While I agree that clients still want to "kick the tires" of the watches they purchase, the internet has made brands more accessible to the end clients, and today's client can now choose-- do I want to buy the watch at full retail at my favourite dealer, or invest part of that margin into an air ticket and go meet the creator, visit the factory, etc? Tough decision for those discerning clients with time on their hands (no pun intended).

The internet has allowed the brand to create elite flagship shops and experiential brand environments without the cost of the real estate.

In every channel to market, there is a captain. A gatekeeper who controls how the dynamics of that channel operate. In the hi-end watch channel, the gate-keeper has historically been the retailer. He had his elite client list and guarded it like the grail. He did not allow client access to the brand or vice versa. Everything went through him and he could charge a premium for that privilege.

The internet has passed the hi-end watch channel captain's hat from the retailer to the brand. More and more, its the brand that is taking control of the dynamics/ becoming the gatekeeper of the channel.

But with power comes huge responsibility, therefore, it is incumbent upon today's hi-end watch brands to find new ways to help and support our bricks and mortar retailers--to work together to redefine the rules and become a shining example for collaboration in our industry.

In the independent/ hi-end watch market, there are core group of intelligent, savvy, movers and shakers in both the brand and retail camps-- To this privileged group I say:

"Come on people now, smile on your brother, everybody get together, try to love one another right now, right now"!

rob
rob

I have to say I've been to quite a few watch stores, and most of the time, it's some young pretty woman, who has no idea about the watch trying to get me to buy it. Sometimes they are very knowledgeable, and I'm impressed. . . the last couple times I was at the Breitling shop I like to go to, she was not knowledgeable as how what movement was used (Blackbird model), nor the power reserve. So from my perspective here, they were using attraction in an attempt to sell, without fully understanding the intricacies of the product. Truthfully, I'd rather have the fat, unattractive guy, who is knowledgeable sell to me, if he could answer questions.

But maybe this is a shift in the dynamics of a salesperson.

Truthfully, anymore, I tend to do most of my purchasing online, for the simple reason that I can avoid sales tax on an expensive item, and the secondary reason, there are just no dealers near me, literally not within 180 miles (other than Seiko, Citizen, Movado, Tag, Rolex (only 1 Rolex dealer) ). Now with that being said, I tend to use non-graymarket dealers (toppers jewelers, continental jewelers) for items I want, as I get the benefit of manufacturer warranty.

Highwaysignpost
Highwaysignpost

Thank you for an interesting article. As a well connected watch afficionado I suspect you have some clear insight as to what is coming from the major watch players as well as hearing some cries of disbelief from retailers as their status gets pulled. It will be interesting to see how things play out.

I suspect most of this is a knee-jerk reaction to the recent economic hardships. Everyone in every industry cut jobs and saved every penny they could. It was the most obvious way to survive the 'crisis'. I don't think the end of AD is all that close. While brands may start direct selling more and more there are a couple of points that might keep the field even.

The first has been previously stated. B&M offers service, attention, and the actual product. When you're purchasing a quality product you want to inspect it yourself. I'm willing to wager more sales are finalized once the purchase has the watch in his/her hand. Hopefully major watch houses will remember this. To add to this some ADs have in house watchmakers. I know the Rolex one in my city. I know him, talk with him and trust him. I take comfort in knowing I don't have to send my watch half way around the world for it to be serviced. There's an authorized Rolex watchmaker nearby. Brick and Mortar establishments are also a place to enforce accountability from the Brands.

The second is money. In the 'old' system, a Dealer has that option to take a percentage off the stated retail price. It's a win for the consumer and the Dealer. I fear this will disappear if major watch houses move to selling directly to consumers. This "discount" establishes relationships, good will between consumer and Brand, and reinforces the illusion that Watch Brands care more about providing exceptional product at competitive prices than lining their pockets with cash. Should the major Brands remove this then that veil will be lifted and likely leave the public with a sweaty stain around their wrists.

WatchMark
WatchMark

The good watch retailers have been around for years and years and years. They will still be around, especially the ones with in-house service. Have you ever been in a retailer with a strong service department Ariel? If so, then you know those are not going anywhere. As far as closing stores, brands have been lowering the number of worldwide retailers for a while. This was the trend before the recession. It makes watches more rare and exclusive. But all retailers are not going away. And yes, it is more profitable to just have the branded and online stores, however, without the independent retailers it would be hard for brands to reach so many different demographics - impossible actually. WHAT DO YOU SAY ABOUT THAT ARIEL?

Jeff Freedman
Jeff Freedman

Yes, the times they are a changing! However internet, will not replace in store purchasing. In the past many industries experienced a changing that was thought to kill another industry. Technology kills an industry, but retail in-store purchase will not die. People will remain loyal to the view and touch of in store sales. Plus higher the retail value, serving/selling caters to the personality needs of the buyer.
In the past many “experts” in other industries claimed a death was coming, however they were wrong. In the early 1900’s with the invention of the record player many musicians refused to have their performance recorded. Their fear was fueled by the “experts” claiming the recorded disc would kill the live presentation. People will no longer need to view an artist. WRONG! Once people heard the recordings, they wanted to see their favorite artist perform. During the 1950’s experts claimed radio was dead because television was invented. Why would people want to listen when watching and listens were offered together? Needless to write in the long term radio is not dead. During the mid 1970, many “experts” claimed with the birth of the video recorder and the ability to rent movies would kill movie theaters. People would stay home and watch TV when they wanted. No longer would the consumer need to show up at a certain time to watch a movie. However that did not happen, as people continue to enjoy the large screen, and sit near a stranger.
Internet selling will not kill in store sales. Internet helps retail stores. The internet is a source of information. We operate WATCHWEAR.com and consumers write us letters, chat on line and thank us for the information we provide so they can purchase at a brick and mortar store. The need to feel /touch and exchange verbal communication with a live person will not fade. Internet represents a total of 10% of all retail sales. The 10% never existed 10 years ago, so new companies grew fast, and the weakest of the brick and mortar is more apparent. The 10% are loud and brag about their growth, and they are news worthy due to the change of buying habits.
Manufacturers are frustrated with the changes, so many attempt direct selling. However the consumer needs to compare products. WATCHWEAR.com offers over 150 brands of watches and allows the shopper to compare at one location. 1000’s of people visit our website daily, but purchase via brick and mortar. Yes, people use the internet to locate the best price but the majority of buyers want to be treated with respect and desire service after the sale. The discounters will win some sales, yet customer service; selection will remain as the key issues to making a buying decision.
Prior to the internet; the 1950’s offered the first discount stores and it was claimed to be the death of department store. Catalog jewelry stores of the 70’s caused fear to the basic retail market. Yet their service and selection levels lacked and they too faded. Today we have warehouse club stores, yet they lack service and selection as well. The internet will not kill in store retail sales. Retailers need to offer selection and service. Brands are selling direct due to poor service and selection offered to the consumer. The internet will not kill brick and mortar, poor service and customer selection causes death in retail.

Erik
Erik

Thanks for the interesting, saddening article. Many industries have done this type of thing including the one I recently retired from.

Commoditising the retail experience is a very dangerous thing. Consumers are fickle enough and have enough choice that they really do need more than just a brand to draw them in. I personally do business with people not brands. Brands are what I own.

Based on my own experience and observation the problem arises when you pull independent business owners from their markets and replace them with corporate bureaucrats. The bureaucrats may be well educated, but there is a significant difference between that and experienced and wise. They can crunch all the numbers they want that does not necessarily reveal the secret to getting someone to pull the trigger on an expensive discretionary item.

The retail bureaucrats will also be less able to resist the manufacturer's inventory pushes, so eventually they will find themselves (all but the very best of them) with excess inventories to discount.

I have a number of nice watches and have never paid full price from my local AD. I never will. They made money and kept a good customer for other purchases, and I got a fair price. I may explore a corporate boutique but I have no incentive to ever buy at one.

Cheers,
Erik

Marco
Marco

I would like to add a few things to this fine article from the retailer's point of view. The grey market has always been around and always will be, regardless of the Internet, for the simple reason that there will always be overstock. In my experience the only times when it has been profitable for a consumer to buy a specific watch from an unauthorized source is when the manufacturer made a mistake somewhere along the distribution line. Manufacturing too many watches and having to dump them, like when loads of watches from a specific brand show up on Overstock.com at insanely discounted prices. An other mistake that big manufacturers often do is to force retailers to make huge commitments in order to get the desirable models. This often leads to the big retailers dumping many of the pieces they were forced to purchase onto the grey market. When distribution is organized properly the price difference between authorized and grey market is not often a deciding factor. It makes sense if you think about it: the actual value of watch depends on supply and demand. Brands like Rolex and Cartier, who probably manufacture more than a million watches a year, have to devise strict rules and expensive marketing campaigns in order to veil the fact that their watches are not so rare and arguably not worth the retail price.

In regards to the shutting down of authorized retailers this again is caused by the manufacturer's greed. Cartier for instance has been shutting down stores like mad presumably to protect their own branded stores.

The Internet is just an extension of the Real World where the customer has more power of choice. Both manufacturers and retailers that have nothing to hide will prosper online. Stores like Lussori, Jurawatches, MattBaily.ca are all very authorized, brick and mortar stores that have a good grasp of the online market. Brands like Hamilton, Marvin watches, and Bell & Ross are examples of manufacturers with a good grasp of what the end customer wants from the Internet: convenience and transparency.

americanwatches
americanwatches

No way, you're wrong about this. That's not the way business works, like nature, business works to streamline and make more efficient. It's business '' evolution'' and the ones that adapt survive and those that don't go extinct. You can complain about it but he forces of the natural market are stronger than anything ''artificial'' like sticking to an outdated and inefficient system because of the past. The past relationships between brands and retailers came about because that was what was needed and most efficient for IT'S TIME. And now that time has changed. Of course, conservative Rolex will be last to the show and as a result will again lose market share to Breitling, Omega, and Heuer. Rolex will be the one brand most hurt from this. They aren't a super status brand like Patek Philippe, they rely very heavily on their dealers and are so resistant to change that the others will be on board with this new marketing wave and will have at least a decade's head start before Rolex is forced to follow the rest of the industry. Rolex is quickly turning into '' the old people's watch company'' and not in a good, old money way that Patek is.

ilanvfs
ilanvfs

How so??? Retailers are asking for 60 percent profit margins nowadays. I design my own watches and find it almost impossible to offer my watches at a competitive price to retailers because they expect so much. Should I make 100 on my watches so a retailer can make 400? Greed is everywhere that's what business is. If retailers want to stay competitive and in the market they need to adapt and ask for less of a profit margin especially for new brands such as myself. I can sell off my own site and get 4 times the money which can go right back in to advertising for my watches.

admin
admin

I don't follow the Watch Snob even tough we both write for AskMen.com. Just not my cup of tea. Most brands regularly engage in minor price increases from time to time. I was with a dealer recently that got a letter from Ulysse Nardin about a bunch of prices increases $200 per watch. Which doesn't feel like a lot on a $10,000 pieces. Omega probably does this as well, but I highly doubt they will engage in "massive increases."

admin
admin

Thanks for the thoughts Marco.

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