At aBlogtoWatch, we’ve dedicated a lot of editorial time to discussing the very real problems that the watch industry is facing today. To some people who see their status as mere timepiece consumers, I can understand why such topics could be interpreted as boring or off-topic. Yet, I still feel there is value in it even if your interest is more in buying watches as opposed to a deeper involvement in the industry. If anything, it helps people understand the context within which their favorite watches are produced, and perhaps also explains frustrations that regular consumers of luxury watches face. I encourage anyone who puts money into anything that could be considered a “high-end watch” to pay attention to the industry that makes such products in order for them to be the smartest possible consumers.
We began this larger discussion of “fixing the modern watch industry” by explaining that the economic and performance issues the traditional watch industry is facing are not related to technology timepieces and also only tangentially related to economic recessions. In other words, industry problems are not temporary and merely blamed on external factors. We also started to point out deep systemic issues in the structure of how the watch industry operates internationally that has led to a situation where growth is challenging, prices are bloated, inventory is excessive, and marketing is misunderstood and mismanaged.
Identifying issues is one thing, but I feel a greater ameliorative responsibility to the industry which does indeed represent where my income and that of aBlogtoWatch comes from. So, in addition to simply demonstrating to the watch industry some of the larger problems that exist (even though some issues are well-noted by them, not all areas of the industry are aware of all the problems), we have taken steps to at least suggest possible solutions to the major problems which once resolved should lead to a happier, healthier watch industry.
This is the final of three articles in a series which attempt to identify major fixable problems in the watch industry, along with solutions to fix them as mentioned above. No solution comes without additional problems to solve, but after lots of study, discussion, and analysis, we’ve identified that these are all solutions that could work quite well and additional problems that arise are by no means insurmountable.
So why listen to aBlogtoWatch’s advice? Consumers, manufacturers, and retailers alike are clearly aware that the luxury watch market has a variety of struggles and challenges. With that said, myself and the rest of the aBlogtoWatch team are uniquely situated in a position to survey large areas of the industry “from above.” Thus, while we are not experts in all fields, we do regularly work with experts in all fields, and have the unique ability to claim having a very comprehensive understanding of the larger watch industry and how it all fits together. This “broad spectrum” awareness makes us unique, especially in seeing how various parts of the industry fit together to form the larger puzzle.
This “solution” series on fixing the modern watch industry focuses on the larger areas of manufacturing and production, marketing and communication, as well as sales and distribution. This particular article will cover that final area of sales and distribution. You can read about the other problems and solutions in other articles you should find links to in this article. In other words, the major topics of discussion related to how watches are made, how they are sold, and considering timepiece sales in a truly global market place.
A summary for my plan to fixing watch retail is to deregulate the experience of being a watch retailer by flattening the market (I’ll explain that later), ending price discrepancies around the world, and establishing a single currency (such as the Swiss Franc) that all watch sales will be based on.
The Current Picture Of Watch Retail Around The World
Explaining what is wrong with watch retail is quite complicated, and could take a book or more to fully discuss. I’ve never sold watches but I have as many close colleagues that do so, as I do who make watches. More so, I have the experience of working with people around the world who sell new and used watches. People who sell watches online and off-line, who auction watches, who trade watches, and who engage in dealer-to-dealer sales and trades. I say all this again to demonstrate my ability to intelligently speak on the topic.
Watch retailers these days aren’t the happiest lot. Prior to the internet, it used to be that if you had a nice store, in a nice part of town, with decent friendly staff selling decent products, you could make good money; better yet, if you carried brands that benefited from high demand and powerful marketing. The best news was that there was little pressure to discount. Watch brands put limitations on what you could do, which were intended to prevent you from competing with retailers in other areas that sold the same products, as well as to “protect brand image.”
Today, the situation of being a “traditional” watch retailer is very different, even though the rules you must comply with are similar to those in the past. You are faced with the fact that the internet has allowed a blossoming “parallel market” for watches to develop which allows watches from around the world, at lower prices, sold outside of “authorized” (rule bound) channels, to be sold to customers at prices below what you are allowed to charge. More so, some of these prices are so low that even if you could discount you would not be able to earn enough money per watch to pay all of your bills.
Watch retail today is often seen as “showrooming,” in that customers come in to see products hands-on and make purchase decisions, but eventually go online to purchase watches at a discount. At worst, watches sold across state lines (in places like the United States) aren’t subject to sales tax. The number one problem facing watch retailers today isn’t a lack of good products, the inability to get inventory, or finding customers. It is that they simply cannot offer the price discounts that customers have been accustomed to.
The internet has removed many of the traditional boundaries between cities, states, countries, and even languages. It has allowed customers to not only find good prices, but also has allowed clever watch retailers – who often have no official relationship with the brands they are selling – to sell at the lowest price they can find, and to enjoy slightly lower business overhead costs than traditional brick and mortar stores for high-end watches that tend to exist in “high rent districts.”