FROM THE EDITORS Letters + Events
Hit the road with the new
NOMOS Autobahn
SHIFTING SANDS
here is no doubt that the traditional sales channels for fine timepieces are
evolving. As more brick and mortar locations close their doors, online
retailers are stepping up their game. Whether run as an in-house sales
channel for a particular brand, or working with authorized multi-brand platforms,
watch brands are showing up to sell new watches at higher and higher price
points online.
T
IN THIS LUXURY SECTOR THE NEED TO TRUST THE SOURCE IS DEFINITELY MAGNIFIED. I mean It’s one
thing to lose a few hundred dollars on a purchase, quite another to lose a few thousand – or more. Killing two
birds with one stone, most brands are embracing, in one way or another, direct sales and creating formal
partnerships that confirm authentic products are being sold.
As the recognized brands in the high-end category engage these new policies, there is a need to achieve
a balance between the reach, scope (and enhanced margin retention) of the web sale, with the needs and
concerns of the existing traditional retail stores. There are formulas that can work and should be embraced
to achieve the broadest scope of coverage while cultivating both paradigms.
But in case you haven’t noticed, rapid change is anathema to the Swiss watch industry.
Looking at both sides of the coin it may makes sense from a certain perspective to take all sales in-house.
For example, using your own mono-brand boutique(s) supported by your own web-direct sales might make
sense at first take as you retain the margins allocated to the traditional retail chain. But if you are the only
voice in-store or on-site extolling the virtues of the product you make, you have eliminated the very best sales
people that you have; an educated and informed expert at the local independent retailer.
Of course in this scenario you’re forced to compete with other potentially competitive types, but as one
industry expert told me years ago: a customer comes to a mono-brand boutique to “buy,” a customer comes
to a multi-brand retailer to be “sold.” Although pithy, the point is well made.
Direct vs. independent also has repercussions in how excess inventory is handled. To date, independent
retailers, having invested hard cash for an allocation from a given brand, are usually stuck with what they
8 | INTERNATIONAL WATCH | SPRING 2018
bought. Most brands are loathe to buy back aging inventory
already on the books as sold.
This puts the retailer in a spot where they need to make
room on the shelves for new product as well as convert the
less popular SKUs to whatever cash they can get for them.
As few as ten years ago this vicious cycle was a more opaque
and often overlooked necessary evil that saw special events
and industry insider deals moving the superfluous inven-
tory. Today, these watches as well as excess inventory at the
manufacturer level are pushed through various channels to
end up on one of many discount sites at substantial discounts.
If the need to expand unit sales from month to month,
quarter to quarter, and year to year continues unabated,
the glut of excess inventory must fall victim to the basic
tenets of supply and demand and will affect the perceived
value of any product.
Keep Watching!
Gary George Girdvainis
Publisher | [email protected]
iWMAGAZINE .COM