As we saw in Part Two, the big brands have woken up to the idea of e-commerce. But how will that affect the established retailers? Put another way, given the choice, where would you buy your watch – assuming you were going to buy it online at all?
By Chris Hall
Research by Caitlin McDonald
With the big brands showing the desire to open up e-boutiques, investing significant amounts of time and money in developing and staffing 24/7 online shopping operations, one could be forgiven for thinking that the inevitable losers will be the traditional multi-brand watch retailers. After all, what more trustworthy source to buy your new watch from than the brand which produced it? And if you’re trying to get hold of one of this year’s new watches the brand itself will be your best bet; retailers’ stock of in-demand pieces is often very short indeed.
It’s not as simple as that, though. As the online market booms, the retailers are working as hard as anyone to retain and grow their share – and let’s not forget, they have been doing this for longer than the brands. Brian Duffy, CEO of Aurum Holdings, which owns Watches of Switzerland, Mappin & Webb, Goldsmiths, WatchHut and WatchShop (in other words, approximately 40 per cent of watch retail in the UK), told QP that online sales were growing “disproportionately”, and saying that “brands selling directly online has not impacted our business at all. We are in the process of significantly expanding the range of brands available online with Aurum, and with that a major upgrade in customer service.”
“We are in the process of significantly expanding the range of brands available online” – Brian Duffy, CEO of Aurum
James Sellors, of CW Sellors (which took over JuraWatches.co.uk a couple of years ago), went one further, pointing out that the rise of own-brand e-boutiques could actually help retailers. “We have recently seen some brands make the transition to selling directly, although this has been a strategy for some of the larger brands for some time as we have seen more mono-branded stores appear in most major cities and shopping centres. We have found this has helped increase sales as the visibility of the brand has increased…”
Having a head start
Counterintuitive as that may sound (and it may be a point that holds truer in a bricks-and-mortar context than an online one – shoppers don’t browse search results in the same way as they window-shop their way down the high street), there are certainly areas in which the traditional retailers have the edge over the brands.
Some of these are structural, and some merely temporary; in most cases, the retailers have a head start on the brands, giving them greater experience running online sales operations, establishing themselves with consumers and gaining their loyalty. Similarly, retailers currently have the advantage when it comes to SEO and sales marketing, but these are areas in which that advantage could be eroded; having taken the plunge, the brands will be looking to quickly plug any gaps in their knowledge.
Anything you can do...
Several e-boutiques have made efforts to match every aspect of the in-store experience – and there are some areas in which buying online gives you an edge. Worried the watch won’t fit? Baume & Mercier and SevenFriday let you print out a life-size “wrist sizer”, so you can enter the perfect strap or bracelet length, down to the millimetre. Think you’re missing a trick paying full price? At Doxa, you can reportedly haggle on price through the live chat window.
Impatient to wear your new purchase that same evening? Mr Porter offers same-day delivery on watches (currently only in London). Even better than a boutique, it also also offers you outfit tips to match your watch. At Watches of Switzerland, meanwhile, any watch costing over £5,000 is hand delivered by their concierge service. (WoS also offers live video chat, which it claims increases the likelihood of a sale eightfold).
Concerned about the store’s trustworthiness? At Jurawatches.co.uk, customer reviews pop up when you reach the checkout, giving you the ideal chance to spot any red flags. And how about this for an exclusive online feature: at Ball Watch, you can upload your own picture to be printed on the caseback…
It’s not just about being able to compare watches either (something you could hypothetically do side-by-side online from multiple sites in any case); retailers such as Watches of Switzerland are the only places where you can buy some of the biggest brands online, such as Omega, Panerai, Breitling, Bremont, Longines and Zenith. If you’re looking for pieces from Audemars Piguet, Vacheron Constantin and Breguet, your only options are Harrods and the Watch Gallery. That’s a pretty compelling draw.
Also on the retailers’ sides in a structural sense is their simplicity of purpose. Watch brands’ websites have to carry out multiple functions, carrying a wealth of multimedia news and “content”, historical information, catalogues of all watches, information about the brand, details of ambassador programmes, corporate information, and more besides. It’s one reason why several have found it challenging to neatly incorporate an e-store – there’s already too much going on. The best – Nomos springs to mind again – hive off the retail side of things onto a separate site. Meanwhile, retail websites have only one purpose: display the watches for sale. At least, they did… as you probably will have noticed, the more ambitious e-shops are aiming to provide as much information about the brands as the brands themselves, creating their own editorial and historical archives.
Other human factors will keep people coming back to the retailers they know, besides loyalty. The ability to trade watches in at several retailers is one; brands being unwilling to countenance the fact that you may not want to keep your watch for life. Another is the pricing flexibility afforded to retailers that brands don’t have; sales, discounts and special offers are all part of the job for retailers but represent an uncomfortable area for luxury brands. And that’s not to mention the thorny issue of global pricing; brands don’t want customers picking the cheapest price from around the world, undermining their (expensive to build, staff and maintain) retail networks in costlier countries.
Loyalty to the middleman
There is one other thing the retailers have going for them when it comes to competing with the brands: for the time being at least, most of them don’t want to compete at all. It’s true that in Part Two we heard from Francois-Henry Bennahmias at Audemars Piguet that the position of the retailer may be under threat*, and it’s a view echoed by Mike France of Christopher Ward, who says that the ease of price comparisons online could rebound on retailers: “The customer, for a known product, will go for the best price package. I suspect this will lead to many interesting discussions between the brands and their wholesale clients who today have pretty much a free rein online. The brand has the ultimate control over distribution and with renewed focus online this is likely to bring forward the inevitable disintermediation of the industry. It could get messy along the way!”
*Update: At SIHH2017, Mr Bennahmias confirmed that Audemars Piguet would not be increasing production for the next five years, and was also not intending to raise retail prices. He went on to add that the only way for the brand to grow its business therefore was to reduce its percentage of sales through retailers, and would aim to sell more watches directly, cutting out the middleman and increasing the brand’s margin.
But the majority of brands are singing from a different hymn sheet. The likes of Hublot and Girard-Perregaux have expressed a reluctance to rock the boat when it comes to taking business away from their retail partners, and it’s an attitude that holds true at smaller brands too. Bremont co-founder Giles English, while acknowledging that selling direct online is probably part of the brand’s future, said that he was “very happy with the way that our partners are doing it”, adding that “we sell through some of the finest jewellers in the country and why would you not want to experience that when buying a watch?” (The watch at the top of this page is a Bremont special edition created for The Watch Gallery).
The point was made more bluntly by Philippe Dubois of Rebellion Watches, one of the few high-end avant-garde brands to be exploring online sales. Dubois says: “The direct online retail is a small part of our business and will remain a small part. We are selling high-end, expensive watches and we need the support of a retailer network. If we start to sell direct, they have absolutely no motivation to carry and to support our brand.”
Maybe the ultimate show of faith in the traditional relationships is that given by Rolex, which very recently (and with absolutely no fanfare whatsoever) entered into a trial partnership with four retailers to offer click-and-collect services across the UK. The choice of partners, which included Mappin & Webb and Edinburgh-based Hamilton & Inches, represent in all honesty a pretty low-key way in for Rolex to begin exploring the idea of online retail, but what it does show is that Rolex is, for the time being at least, committed to doing things the traditional way. Maybe the middle isn’t that squeezed after all.
In Part Four we look at what changes are afoot in the vintage market online…