edit note
Retail Really Must Be
For Suckers
It seems I find myself offended far more often than I used to.
It’s not that my clients or readers are being rude, or that I’m simply
getting older (but not ‘old’) and grouchier, it’s that I’m really at a
loss when every other watch brand sends me a press release about
its latest offering and proposes a price that is just dumbfounding! The old adage of bullshit the fans–not the players–comes to
mind. Only now, with the simple click of the mouse, everybody is
a player. Long gone are the days when savvy buyers had to pay a
fee and attend private watch shows where name brands could be
bought sans the traditional distribution chain vig. Now anyone
can simply do a quick web search on a particular watch, add the
word ‘price’ and find brand new watches from this year’s selection
at ridiculous discounts. To be sure, there are a few less exposed
brands like Patek and Rolex due to popularity and presumed rarity,
but most brands can no longer hide the fact that their original retail
pricing is completely specious.
So what are modern watches really worth? Twenty seconds on
the search engine of your choice will elicit discounts in the vast
majority of cases anywhere from 25%-65% off the original retail
price. That’s not to say the brands are taking on the ‘mark ‘em high
and sell ‘em low’ TV formula, it’s just that these watches are being
sold en-masse into non-authorized channels that are happy to make
a few points over their cost and let volume make up for the miniscule markup. Without the need to pay rent, or in many cases even
the wholesale cost of inventory – why not?
I’ve previously opined on the check-valve pricing that stipulates luxury watch prices will only go up year on year – regardless
of a strong or weak sales cycle, so I won’t harp about that again.
Rampant overproduction and an inertial inability to adjust to the
current demand, or lack thereof, as well as the unending drive to
create something new EVERY year has simply flooded the worldwide market with too many watches. Seems the Swiss have forgotten Business 101 and the whole supply-and-demand thing.
4
Wristwatch | 2016
As a reporter on the topic I find myself in a conundrum; as
I compose these issues and feature new watches, I always like to
include pricing. The problem is, when I see a brand new watch
that the PR agency for the brand tells me retails for, oh let’s say
$14,800; I punch a few keys on my computer, find them for 32% off
at just over $10,000 (new in box mind you) and wonder what to tell
my gentle reader.
Some brand leaders might decry “beware of fakes” or “that
watch does not come with a factory authorized warranty,” but even
the parallel sales channels are gaining legitimacy and selling authentic products, and most are opening up their own service centers
to replace the factory warranty. Is the service as good? Maybe,
maybe not, but if you just saved close to five large on a $15,000
watch, you can afford to take it to the best watchmaker you know
and still be well ahead of the cost of ownership curve.
For the moment, I’ll continue to report the ostensible pricing supplied by agencies and brands, but I advise a large dose of
sodium chloride as you review the ‘proposed’ prices. Something has
got to give as the tension between a fantastical wish price and the
mundane market value are on a collision course.
On another note I’d like to welcome Mike Thompson to the
WristWatch team. I’ve worked with Mike in the past when he was
my editor back at iW Magazine, and after a few years travelling our
separate paths, we are once again working together to bring you our
take on the wide world of watches.
Keep Watching:
Gary George Girdvainis