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TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

Today, investment-backed TrueFacet.com introduces the TrueFacet Boutique as an authorized online store for a growing list of high-end luxury watch brands (more brands will be added in the coming months according to the company). This is big news because most luxury watch brands, especially the more exclusive independent ones, have traditionally shunned internet sales for their timepiece goods, preferring instead more “traditional” distribution and sales models through brick and mortar boutiques. Old ways of doing business are changing rapidly as old-school watchmakers are increasingly trusting new, competent companies like TrueFacet and their colleagues to help them do business in modern times.

Many of the internet’s best watch sales firms continue to operate outside of “authorized dealer” channels. TrueFacet for example began as (and continues to be) a curated digital dealer of pre-owned watches and jewelry from big brand names. Other high-performance online watch sales firms are gray market dealers who sell new watches that initial (authorized) dealers can’t manage to sell first. While there are many good examples of online sales for watchmakers, the big news here is that TrueFacet has just taken a major step forward into being a major online authorized dealer. For the most part, other authorized watch sales online happen directly from the brand themselves.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

Many individuals on the watchmaker side of the industry felt that the utility of third-party retailers might be made redundant by the internet’s ability to match customer and brand directly. In reality however, it has been the odd brand out who has proven itself as being able to run a profitable direct-to-consumer e-commerce platform. Most watchmakers who sell direct to consumers online, bypassing traditional retailers, do not achieve the success they are hoping for, for two reasons. The first reason is that most of these brands do not understand digital marketing, and thus do not advertise and communicate very well.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

The second reason that most brand-direct e-commerce stores do not perform is because of the availability of discounted merchandise available online. This is where the gray market plays a powerful role. If a brand sells their $8,000 full-retail watch on their website, but the same watch is available for $6,500 from a gray market website, data strongly suggests that the consumer will go with the $6,500 option assuming the latter retailer appears to have a modicum of positive reputation. More practically, TrueFacet offers 24/7 customer service, logistics, as well as user behavior data that they intended to share with their retail brand partners. Such data is intended to help these brands better understand how their watches perform, as well as what watch collectors appear to be in search of.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

The TrueFacet Boutique online authorized watch store will launch selling the following diverse assortment of watch brands:

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  • Bovet
  • Manufacture Royal
  • Arnold & Son
  • Fendi Timepieces
  • Les Artisans De Geneve
  • HYT
  • Frederique Constant
  • Faberge Watches
  • Tutima

The TrueFacet Boutique will have varying agreements with its partner brands, but in some instances will have territorial exclusivity. Meaning that TrueFacet will be the exclusive United States retailer of many of the brands that it is an authorized dealer of. That means each watch comes complete with a valid manufacturer’s warranty, and buying from TrueFacet will be the same as buying from a traditional brick and mortar store (without the going into the store part).

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

TrueFacet also seems to suggest that their model will not be a threat to brick and mortar retailers who may also carry the same brands. Part of this plan is to reduce gray market inventory, which allows for rampant discounting to happen. If TrueFacet is the only dealer in such a large territory, and agrees to keep retail prices consistent, the availability of gray market stock should be extremely limited. With that said, according to TrueFacet, more than 65% of watch and jewelry sales will happen online within a period of five years from now.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

In addition to announcing that the TrueFacet Boutique is now an authorized dealer of nine brands, it will also now start to sell certified pre-owned watches. Pre-owned has been a hot area in watch sales, and certified pre-owned watches are used watches that are certified (in some instances with the original manufacturer’s seal of approval) to work, and be in particularly good order. More so, the best part about certified pre-owned watches is that like new watches, certified pre-owned watches will come with a warranty – fulfilled by TrueFacet.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

This type of news is of particular interest to me as I’ve been eager to see the traditional luxury watch industry find better formulas for working online. The reality is that most watch lovers conduct the majority of their research online, discover new watches online, connect with other collectors online, and also purchase watches online. The real-life experience of being a watch collector can never be entirely replaced on the internet – but it is where people seem to prefer doing the majority of their transactions and connections.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

More so, for a while now I’ve held a “leave it to the professionals” approach when it comes to retail and sales. Watch brands are for the most part only really good at designing and making watches – not always selling them. The wisdom of the traditional relationship was that watchmakers produced covetable items, and retailers knew how to attract customer attention and sell them items they learn to covet. No one company was responsible for manufacturing something and convincing each and every consumer to get it.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

It is my belief that success in online watch sales requires the competition of a few multi-brand watch stores online, as opposed to a bunch of watch brands going direct. It is likely a good idea that wrist watch retail profit margins go down a bunch, but consumers are probably best served when buying from retailers who also work as distribution partners with the brands.

TrueFacet Boutique Introduces Authorized Online Sales For Luxury Watch Brands Watch Industry News

With great interest we will carefully observe and track how the wrist watch retail environment continues to evolve online. You can see how TrueFacet does it at the TrueFacet Boutique.

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Comments

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  • BrJean

    The link at the end leads to 404 page; should be https://www.truefacet.com/boutique/ instead.

  • Moonraker

    Les Artisans de Geneve? Of Kravitz fame?

    • Berndt Norten

      You said the word! KRAVITZ!!!!

  • BrJean

    What about that Tutima brand? Is it cool or not?

  • Middle

    “If TrueFacet is the only dealer in such a large territory, and agrees to keep retail prices consistent, the availability of gray market stock should be extremely limited.”

    Sure, they want market supply for the good of the industry. Sure.

  • cluedog12

    Ariel, it’s not clear to me how True Facet Boutique will reduce grey market inventory, even if they are the only authorized online dealer in many territories. Brick and mortar stores will still provide a drip of inventory to pro resellers on sites like Chrono24. These watches may not be authorized, but most people shopping online will choose a substantial discount over marginal peace of mind. Retail pricing on True Facet makes it a non-starter for me and most people. It will remain that way as long as there are trustworthy sources selling the same watches at discount.

    Here’s an example: The Time Pyramid Translucent Back, which you reviewed last year, is selling on True Facet for $31,900, i.e. full retail. You can walk into Roman Times in Las Vegas and get *something* off retail, so there’s no incentive to buy online. Chrono24 has a number of sellers offering the slightly older version for $15,000.

    • Ariel Adams

      I think we need to anticipate a future where the gray market is going to steadily go away. While it is great for consumers, it is a cancer on the industry. Perhaps a self-made cancer, but a harmful thing nonetheless. In any event, I full anticipate that the gray market will drastically reduce in size over the next several years.

      • Middle

        OEM pricing is the only cancer on the industry.

  • simon

    Ariel….this doesn’t make sense: “TrueFacet will be the exclusive United States retailer of many of the brands that it is an authorized dealer of.’ followed by: “TrueFacet also seems to suggest that their model will not be a threat to brick and mortar retailers who may also carry the same brands.” Does True Facet have exclusive dealer rights or not? Do you mean exclusive online dealer rights?

    “If TrueFacet is the only dealer in such a large territory, and agrees to keep retail prices consistent, the availability of gray market stock should be extremely limited” COME ON ARIEL, your better than this, and in the know. Aren’t you buddies with Danny Govberg? Surely he has told you brands sell direct to grey market dealers when sales are down! Yeah sure, some retailers supply the grey market, but it is the brands themselves that dump the product, many of which are included in the list that True Facet is a part of, plus the mainstream brands. Somebody sold true facet a bridge in Brooklyn with this rhetoric. Furthermore, I wouldn’t be surprised if True Facet becomes sole distributer of the brands listed…..no one else wants to carry them.

    • Middle

      Are you not aware of the noble pursuit called gaining majority market share? It’s quite beneficial to all of us, you know.

      • simon

        What part of my comment is that in regards to?

        • Middle

          What I believe to be our mutual aversion to Ariel’s reiteration that this seller is somehow doing a good deed to the industry by attempting to monopolize certain markets.

          • Ariel Adams

            I’m suggesting that this is good news because of the endorsement by the brands of the business model. I think traditional retailers were in many instances incapable of properly competing in today’s retail environment. I see this as a step toward modernization for the watch industry, which is ideally a step in the direction of first stability, and then eventually growth.

          • Middle

            It is important for the industry to get with the times and enter the online market before they go the way of Tower Records, but True Facet’s statements give off the impression they think they are doing a good deed, when in reality they are seeking market dominance and exclusivity for brands. It is disingenuous.

          • Phil leavell

            I’m a little slow on the uptake but I kind of get the feeling the way Adams describing the J shop, becoming an authorized dealer for the producers would help stabilize market dominance. That would also bring a concrete prices with little movement and keep the Swiss Watch Market at a high rate of profit for the Swiss and keep bleeding cash out of the customer. The trick is for the producer two establish with the grey market shops & bringing them out of the gray and into the retail and keep the l lions share profits. The only thing that will benefit the consumer it’s probably a little lower price point for a while but dealer authorized warranties

    • Ariel Adams

      I’m looking at this in more a long-term manner. Part of that is assuming that the practice of feeding the gray market will reduce and in many instances eventually go away. I’m not per se against the gray market, but I know that the tendency to keep feeding it harms the brands which do so incrementally each year.

    • Phil leavell

      Boy wouldn’t it be nice to be on the ground floor of that$$$$$$

  • SuperStrapper

    Fendi???? Say it ain’t so!

  • Kuroji

    Amazon also has CPO high zoot watches for close to MSRP. What a deal!

  • Marius

    According to this sponsored post: “This is big news because most luxury watch brands, especially the more exclusive independent ones, have traditionally shunned internet sales for their timepiece goods, preferring instead more “traditional” distribution and sales models through brick and mortar boutiques.”

    I’m sorry, but I fail to see how this is such “big news.” If True Facet is charging full retail prices, then what incentive would I have to buy from them? As cluedog12 argued, you would be much better off going to an actual brick&mortar authorized dealer, where you could at least negociate a discount.

    Furthermore, let’s look at the brands that True Facet carries:

    Fendi; Les Artisans De Geneve aka Lenny Kravitz; Tutima; and Frederique Constant = MICROWAVED GARBAGE.

    Bovet; Manufacture Royale; Faberge; and HYT = Obscure & weird brands whose raison d’être is a real mystery. What’s more, these watches should be best handled in person; buying these watches online, without seeing them in person wouldn’t be a good idea.

    Arnold&Son = the only decent brand from the lot. However, I would never pay full retail for an A&S considering that on the grey market as well as on the pre-owned market, these watches can be purchased at huge discounts.

    • Ariel Adams

      The gray market won’t be around forever in my opinion.

      • Moonraker

        Then it was smart of you to get some sponsoredpost cash out of Jomashop before they go under. 🙂

        • Ariel Adams

          I really do think that JomaShop will be an authorized dealer or adapt rather than, as you said, go under.

      • Berndt Norten

        Why not? I’m curious to know why you think people won’t continue to roll the dice and choose a discount over full retail minus warranty? Is it because you think the brands will somehow shut it down?

        • Ariel Adams

          Consumers will always prefer lower prices. That isn’t going to change. But the industry will eventually change its distribution models since the old ones don’t work for the internet-economy we live in now. The old distribution models allowed for a lot of unsold inventory that could be funneled to gray market. I think those channels to get unsold watches to gray market retailers will shrink.

          • Berndt Norten

            Thanks for the response

          • William Jones

            The huge margins create a powerful incentive to greymarket a product. If normal retail margin is 50% and I develop a distribution channel where my selling cost is 1/10 of what a retail jewelry store pays I can sell a product at 30% margin and still make a decent return. The cost of selling a watch on the internet is way less than what it costs a brick and mortar retailer to sell something especially high end watches. Jewelry stores pay the highest rents in the mall and high end watch sales are not a volume business. The only way to fight this would be for the manufactures to get into the retail business and control the whole process from A to Z, but the up front cost of that would be huge.

          • Ariel Adams

            I’m thinking that the “new” watch economy without as many traditional retailers will see margins normalize to 20-30% in most instances.

      • Phil leavell

        The grey market will exist as long as producers overproduce and have to dump their products into the grey market to move them.
        Overpriced overproduced saturation caused by gluttony. I tend to pick on Swatch group a lot I see them as one of the major problems in the watch industry. They in particular have taken notable brand names and turn them into absolute dime-store junk trying to maintain market share.
        There are small editions of watches that command a high price for what they are. The trying to command a high price on name alone is wrong.
        Tell me Mr Adams would you buy shares in Swatch. Actually I know you can’t answer that.

        • Ariel Adams

          I can answer that. I don’t knowingly own any positions in any publicly traded watch brand or company that owns a watch brand. It would just be imprudent business of me to do so since I am more or less a consultant to and about the watch industry.

          • Phil leavell

            Rudy a fair enough answer and if the reverse were true would hold you in a conflict of interest position. Thanks for your honesty

          • Phil leavell

            It was supposed to say truly.
            I have several friends and a bunch of coworkers and I’ve gotten interested in watches at least half of them have started to read this blog site unfortunately most about 30% of them go straight to comments not reading the articles.

          • commentator bob

            Also because they are all horrible investments except for the one that is not public.

    • Sheez Gagoo

      didn`t arnold and son release this horribly build Clinton themed porn watches?

  • Chris

    Chrono24 is also an authorized dealer of independent watch brands. They recently launched their Brand Boutique: https://www.chrono24.com/brandpage/brandboutique/index.htm

  • Berndt Norten

    KRAVITZ DESIGN!!!!

    • Moonraker

      The Power of Christ compels you! The Power of Christ compels you!

    • commentator bob

      Knock-off panda Daytonas also, which I think will get attention from Rolex.

  • commentator bob

    Interesting that Citizen is putting Frederique Constant on this site but not Alpina. Frederique Constant watches are still ~1/3 of the price on Joma, and remember, Joma makes a margin.

    The gross mutilated Rolex watches that infringe on Rolex trademarks by printing “Rolex” on new/completely redone dials might get this site sued out of existence even though I doubt they will sell any.

    Watchbuys.com actually makes this model work, but it is because they are the only source for what they sell.

  • Jerry Davis

    I was wondering where I could get a Bovet with a silicone strap for $173,000.
    Now I know.

    • commentator bob

      Plus discretely delivered to your door instead of having to make that embarrassing purchase in public.

  • commentator bob

    The short sighted incentive is always going to be to over-supply the market with too much stock to maintain MSRP.

    If a company has a $8,000 watch that they get $4,000 for wholesale it is going to be a lot better to sell 10,000, drive the market price down to $6,000, and make $40,000,000 than sell 5,000, maintain the $8,000 MSRP and make $20,000,000. Especially since the lower transaction cost will include grey sales for which in the US the company will not have the honor the warranty.

    The threat is that physical retailers will see the lower margins and refuse to carry the brand, or at least as much of it. But that is a decreasingly relevant threat, as physical retailers make up a lower portion of sales.

    If you are a small online only company like Sinn then you can have a direct sales website along with one authorized US distributor, watchbuys.com, to avoid shipping customs issues. But if you are Omega or Tag the grey market is a feature, not a bug.

  • Jane Genuine

    Awesome tips. I love shopping in online boutiques and one of my favorite is https://www.limelush.com

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