FROM THE EDITORS Letters + Events
Patek Philippe’s
Aquanaut Ref. 5168G
TIME TO BUY TIME
D
ue to the growth of parallel channels and the access to same, thanks to Al when times are not so good, they also raise prices,
Gore’s Interweb, buyers are shopping around for watch bargains like never ostensibly since they are selling fewer units they need to
before. Deep discounts are available due to the inability, or conscious lack of make more profi t on each sale – check valve pricing.
desire, of the Swiss Corporate entities to respond more nimbly and react quickly to the
changing market demands. For too long the need to beat last year, last quarter, or
even last week’s numbers has driven sales people, brand managers and continental
To a large extent the consumer is in the driver’s seat
now and can once again buy a great watch at a reasonable
price. While the brands seem to not only be tolerating, but
in many cases feeding the beast of non-authorized sellers,
presidents at all levels of the industry to take and/or allow actions that they knew they are slowly embracing the direct sales channels and a
in-advance may not be in the best interest of the brand, but enabled them to hit their few have even curtailed production in an eff ort to regain
sales goal – or at least come close. This desperation is led by the innate desire to keep the rarity and cachet that has been eroded through
one’s job or possibly even make a bonus by hitting sales fi gures that don’t necessarily
refl ect the reality of the current demand. Overproduction has led to an estimated two-
year surplus in both fi nished watches and watch movements. Eff ectively the supply
has far outstripped the demand, and without any real strategy to deal with excess
saturation. Watching how this pans out over the next fi ve
years will no doubt be an interesting observation of an
industry that is historically slow to change, but must come
to grips with the new reality and transparency that the
web has thrust upon them.
inventory, the product ends up on any of a hundred discount web sites.
THE UP-SIDE TO THE OVER-SUPPLY OF WATCHES is that the end consumer can fi nd (with rare
exceptions) any watch at a discount with a few clicks of the mouse. A savvy consumer might wonder when, if
Keep Watching!
ever, the $3,000, $5,000, or $10,000 watch was ever worth this price when you see it new in box for 62% off on
line. What we see in today’s disparate pricing is a result of what I call “check valve pricing”. For those not
familiar with a check valve it allows fl ow in one direction only. So when times are good, the Swiss strategy Gary George Girdvainis
(followed by others as well) is to raise prices since the demand is there. What’s kind of astonishing is that Publisher | [email protected]
12 | INTERNATIONAL WATCH | SUMMER 2017
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