The consumer needs new watch brands and, I would argue, so does the industry. The bulk of the business is done by the established brands, there is no question, but no one, pardon me for stating the obvious, gets very excited about the next Rolex or the new line extensions to the Classimo line of the tried and true Swiss watch brands.
Certainly, established watch brands can get people talking with exciting developments (think TAG Heuer's V12 or Zenith's Defy Extreme), but what really gets people going is a new watch brand that brings something extraordinary to the market.
There is certainly a formula for success - great product, great marketing, capital for advertising and awareness building but it's a tough one to realize. We all know of brands that have one or more of the ingredients, but still have not succeeded.
Some brands have done well without great product but with killer marketing and advertising, while other brands have had great product, yet without a big marketing budget, no one knows about them.
It's a real balancing act, getting the right mix, to achieve success.

The challenges
Introducing a new brand to the market is no easy task. Very rarely do retailers greet you with open arms.
“I remember when we went to the United States in 2004, we worked really hard to break in,” says Thomas Morf, CEO, Carl F. Bucherer. “Nobody wants a new brand. Nine out of ten brands, they come and they over promise and under deliver. We did the opposite.
”The problem is that, as a relatively new brand, we are crying for acceptance,“he continues.”We are being scrutinized and challenged more than established brands like Breitling. The right crowd has to wear our watches to make it work, and that's a tough market to catch without interesting, unique product. In today's world there is too much of everything, especially in consumer goods. When you start marketing a new brand, you need to find out exactly where you want to fit in, who's going to be your consumer etc. You have to separate yourself from your competitors to be seen and heard."
New brands can never rest on their laurels; they always have to be pushing for more: more edi-torial, more advertising, and more retailers.
“First, creating and maintaining your brand and its positioning consistently for your audience is a challenge,” says Ali Soltani, President, Ritmo Mundo. “The second obstacle is that once you have created a corporate communication campaign to position yourself among all the other brands, it is very difficult for new brands to compete with all the 500+ other brands with the same objective.”
The fierce competition in watches has made it more difficult than ever to introduce new brands. “Distributors and retailers see so many new brands that they often don't feel comfortable with them anymore,” says François Candolfi, CEO, Volna. “There might have been ten new brands last year alone. You can no longer just have a good product and good marketing; you really have to have something different.”
Getting the brand known is the chief stumbling block and one that baffles many companies. “In such a competitive and brand savvy market the main challenge is that of building awareness and confidence in a brand with a limited track record,” says Andy Youings, Marketing Manager, NITE International. “Many watch brands have been around for many, many years so getting noticed in the market is always going to be a challenge.”
The bottom line, however, is that retailers need new brands, so if a company can do it right, it can be successful. “Retailers and customers want novelties and new products,” says Stefan Varak, President, Voltime. “We got orders immediately and we started working with the best retailers, because the idea was so well received.”




A selection of advertisements – Europa Star 1960s & 1970s




Reaction from retailers
Retailers cover the spectrum from very open to not willing to even meet with a new brand, and everything in between. It all depends on the position of the retailer. New retailers might need new brands more than established ones and every retailer's individual experience influences its position. “We find the response from retailers varies enormously depending on the market,” says NITE's Youings. “More traditional markets such as jewellery are more cautious when investing in a new brand. Therefore, the immediate reaction is to play it safe and stay with what they know. However, this stance also means that jewel-lers often find themselves holding large stocks of the very same products as their competitors.
”We have tried to address the concerns of retailers and remove the obstacles that would normally impede their ability to give the NITE brand a try,“he adds.”For example, we don’t impose large minimum order quantities and in some circumstances will even work with our smaller retailers to provide a ‘drop shipment’ service that allows them to effectively offer the complete NITE collection without having to invest too heavily in stock. As a relatively small manufacturer we are able to provide a level of flexibility that many of the larger brands are not willing to offer."
Even the new brands realize that retailers have to measure the risk. “Retailers are resistant to new brands because their job is to make money not to lose money,” says Armand Nicolet's President Rolando Braga. “New brands have to prove that they are not there for only a while but that they will be there for a long time, proving that each year they are improving the product and the service, meaning that they will become a reliable brand with which retailers can make money.”
Ritmo Mundo is not a new brand, having been on the market for five years, but it's still 'new' compared to the giants of the watch industry. “Even after 5 years, we are confronted with the challenges of retailer commitments,” Ritmo Mundo's Soltani says. “Retailers unfairly compare their 'new' brands to existing brands in terms of sales and end consumer knowledge. However, the intelligent retailers recognize that these new brands differentiate the retail store from others who are focusing on mainstay brands. Those focusing on mainstay brands are conservatively losing a bigger portion of the market share to those retailers that are attracting 'new' clients due to the new brands in their store.”
“Other than the major luxury Swiss watch brands, every retailer wants something different than the next retailer but no one wants to take the chance on an unknown brand,” adds Jimmy Olmes, President, Reactor. “How they expect to have something new and also have their customers know all about it is beyond me. Marketing a new brand comes down to trust, if the retailers like your product but do not trust you, you are out of luck. If you are marketing a powerful established brand, the retailer needs you more than you need him. When marketing a new brand the reverse is true.”

The potential
If a retailer is successful with a new brand, the room to grow this new brand usually far exceeds that of established brands. “It is easier to change and/or set consumer perception of a new brand than it is for an old established brand to try and shift their positioning and how people view them,” says NITE's Youings. “So from this point of view I would argue that the upside is greater for a new brand as it affords the flexibility to adjust your market positioning and branding to suit the broader market environment.”
Soltani, who is also a buyer for his family's store, David Orgell in Beverly Hills, knows that the upside of a new brand is greater “if you chose the product of a new brand carefully you have more momentum with a new brand if the store wishes to identify itself with the new product,” he says. “On the other hand, if the store wants to be old school, the growth of major established brands will always be paramount, but you don’t have the same sex appeal as new brands. Old brands continue with same old models with slight variations, whereas new brands often are breaking the mold on new collections constantly.”

What retailers can do
The most important thing is for retailers to be open-minded to new brands. “Always stay open for new brands with potential,” says Carl F. Bucherer's Morf. “Look behind the curtain. Is there substance behind the brand? A brand needs to have a global strategy which is laid out long term.”
Putting in the time and doing research is vital to making the right decision about a new brand. “I always spent my first few days at Basel with the smaller brands since I wanted to get exclusivity and first rights to the product of these new brands,” Ritmo Mundo's Soltani says. “After I was done reviewing what new brands had created, I would go to the more established brands. They were often predictable and always willing to show the product either in Basel or they would come to your store with all the information within 45 days. The new brands don’t always have access to your store; hence owners ought to spend time with them first.”
Don't underestimate the impact a good new brand can bring.
“Established brands are important and may serve as the mainstay of their business but new brands create excitement, separate retailers from their competition,” Olmes from Reactor says. “When is the last time a 'regular' customer walked into their favourite watch or jewellery shop and bought an established brand on ‘impulse’ this simply does not happen. I would estimate that over 50% of Reactor sales are impulse. This is due to our unique styling, creative merchandising and affordable price points.”

Though it feels like no-one needs a new brand, the reverse is true, for the right brand and the right retailer. New brands and retailers, if they approach the business correctly, can be successful. It's a combination of the right product, the right price point, the right relationship, the right timing and the right decisions. It doesn't always work out, but knowing what both sides are getting into can help you make the perfect decision.


Source: Europa Star February-March 2007 Magazine Issue