How can a retailer tell the difference between a brand with real potential and one that is doomed to fail? Unfortunately, it's not anything as simple as a checklist or formula - it most often comes down to due diligence, research and gut feeling. Not the most scientific way to run a business, certainly, but the only way it can be done.
Most retailers accept the fact that there are going to be brands that come and go and, even though they are reluctant to take on new brands, many times they can't afford not to, because their customers expect to see new things when they walk through the door.
“We don't take on new brands without carefully scrutinizing and weighing our market,” says Marion Halfacre, Traditional Jewelers (Newport, Calforrnia, USA). “When we feel that it would be a good addition to our inventory, something different, we are more than happy to add new lines. New brands can generate much enthusiasm and draw customers into the store, who may then view even existing merchandise slightly differently.”

The dangers of new brands
Excitement and the next big thing can really help drive the watch industry, but at the same time, new watch brands can be difficult and extremely costly to market and sell. There has been such an influx of new watch brands over the last ten years, some retailers are jaded and adopt a ‘watch and see’ attitude when it comes to deciding whether to take a new brand on. So many watch brands have come and gone, leaving retailers with product that won't move and dissatisfied customers who can't get service on watches that no longer work, retailers are justifiably wary of getting involved with a new watch brand too soon.
“New brands don't have history and no one knows about them,” says Amit Handa, Vice President of fine watch sales, Alpha Omega Jewelers (Boston, Massachusetts, USA). “It's hard enough with brands that are well known. I feel that it's good to have selection, but when you have too much selection it can confuse the customer.”
Just about every retailer has a cautionary tale about a brand that went out of business. “I certainly have been burnt in the past and some brands have not behaved correctly, ethically speaking,” says Jurg Kirchhofer, Kirchhofer Haute Horlogerie (Interlaken, Switzerland). “But this will not stop me from trying to help others. We do it differently with new brands, without harming successful existing business relationships - the newcomers must really find their niche in the market.”




Would you have bet on the future of Breitling based on this 1952 Europa Star advertisement?
Does anybody know what happened to this brand advertised in Europa Star in 1960?


There is risk in trying anything new. “We are very leery of taking on new brands, due to the fact that if they do not sell through, you have dead inventory which you will only get very few cents on the dollar to liquidate,” admits Denis Boulle, de Boulle (Dallas, Texas, USA). “On the other hand if you can create a meaningful relationship with a brand it can give you many rewarding years.”
“I am very leery of new watch brands,” admits Ray Grenon of Grenon's of Newport (Newport, Rhode Island, USA). “There is very little that hasn't already been done. I ask myself why is this brand coming to market and what do they offer that isn't already offered elsewhere? Many brands do not have the resources to advertise enough and build brand awareness. Its always embarrassing when a customer asks about the watch they bought two years ago and you have to explain that they are out of business now.”

The rewards
If you can pick the right new brand to get involved with, and it takes off, it can be a big success. Some retailers feel that it's part of a retailer's duty to be open to new ideas and give new brands a try.
“I continuously take in new brands as I love new technological innovations and design features in watches,” says Jurg Kirchhofer. “Many of the innovations came from small newcomers. I consider retailers responsible to help smaller new brands be in the marketplace.
”It is in general more difficult to sell a new brand than an old established one,“he continues.”But the satisfaction is also greater when you can consider having been part of the rise of certain brands."
The quickest way for a retailer to lose business is to offer the same watches day in and day out. When customers walk through the door of a store, they expect to see new, exciting products, watches they've never seen before, new brands, new models and more. If all they see is the same tired watches they saw the last time, they might just turn around and walk out.
Nowadays, store loyalty is fleeting. Sure, many retailers have a reliable core group of customers that keep coming back but if a new hot watch is introduced, and you don't carry it, the customer that wants that watch will most assuredly go to a retailer that does.
With the Internet as a threat to brick and mortar retailers, where the purchase of a new watch is just a click away, it's never been more important for retailers to remain on the cutting edge of the watch business. Today, many customers seem to know more about new products than most retailers, so surprising clients is getting ever more difficult.
Marion Halfacre advises retailers to “study your market carefully, check your territory for competitors, and make certain that the new brand will participate in an advertising and marketing campaign to promote your new line.”
Spreading the word about a new watch is a costly proposition anywhere in the world, so it's important that a new watch brand has the financial backing to make a splash. Sure, there are certain customers who are always looking for a new watch brand, something that their buddies don't have, but the majority of customers come into a retail store looking for brands they have heard of before.

Ways to minimize risk
There's no way to be a watch retailer without having some risk. The time to protect yourself with new brands is before you sign on the dotted line.
“Choose your brands very carefully,” advises Boulle. “Make sure if at all possible to work out an exchange program or do a test trial with a clear understanding of how you can separate the relationship if the product does not sell.”
Jurg Kirchhofer urges retailers to give new brands a chance. “Retailers have to become more courageous and remember that your part of it in the beginning will be like a boxing match - the one who hits first hits twice,” he says. “In our new shop we have a special area reserved for new brands.”

There are going to be new brands introduced every year, without fail. Some of those brands will succeed. Many of them will not.
There's no absolute way to determine which is which. If it was easy, however, everyone would be able to do it, so the savvy retailer who can pick the right new brands has a definite advantage.


Source: Europa Star February-March 2007 Magazine Issue