Returning to genuine values
This confidence crisis has pushed consumers to take refuge in genuine and recognized values. But this return is not necessarily negative for the small independents. Lionel Ladoire remembers a recent interview with Philippe Stern, the owner of Patek Philippe, which, in spite of the crisis, is seeing 2009 results comparable to and even slightly better than 2008. In this interview, Stern said he noticed this “return towards the large institutions that, aside from us, may also affect the young brands that have strong, consistent and innovative products.”
As in art, genuine values are not only those relating to classicism and tradition. There can be real values in the avant-garde. In short, if the economic downturn is responsible for cleaning out distribution channels, it is doing the same for watch brands. There is no longer a place for the dabblers and others who come from a pure marketing perspective. Now, people want substance, not just hype.
Getting the word out
Speaking of substance, a major concern is having the financial means to get the word out about one’s product and the rigour of the watchmaking approach. But for getting the word out, it is necessary to have money and a lot of it. This is even more important today since retailers (besides reducing their access to independents) are no longer assuming all the costs of promotion.
Thierry Oulevay, Jean Dunand ‘Pièces Uniques’ President and one of the latest Tourbillon Orbitals.
The independents we spoke to often say that they are aghast at the lack of watchmaking culture and knowledge on the part of many retailers, including some very important ones. It is not uncommon that their clients are more knowledgeable about watchmaking issues and techniques than the retailers themselves and their staff. Are they exaggerating? Without mentioning any names, we offer the example of a watchmaker who provided training three times during the year to the sales team of a major retailer on the subtleties of his totally original movement. When he later asked the retailer why sales were so weak, he was told that his watch “was expensive for having an ETA movement”.
At Hautlence, they are quick to say, “For people like us, the future is not with tradition-al retailers.” So, who then? It is too early to say more, but some very interesting initiatives are coming to light. A new fact characterizes this new generation of independent brands—they are speaking to each other. They bump into each other during their travels around the world and they share the same observations and exchange experiences.
Tightening the networks
For François-Paul Journe, who began ten years ago, the answer lies in tightening up his distribution network and creating his own boutiques. “Already before the crisis, I went from 50 points of sale to 35. This year, I closed another three. In the remaining ones, I did not force anything. I did not push the sell-in. At the same time, I strengthened my own bout-iques, of which there are seven today and of which I own all or am the major shareholder. This allows me to showcase all of my collections, to maintain my service at the required level of excellence and to perfectly master and control my prices, without having to discount anything, all while avoiding the grey market. In addition, I am creating some special series that are on sale only in my boutiques. As for the retailers, I carefully analyze their sales. Since I know that certain products are only available in my own stores, I pay special attention when a special order comes in so that it sells for the indicated price.”
In passing, we might say that their prices are ‘reasonable’ for such original and complicated timepieces. “Before the crisis, people told me, ‘You are not expensive enough! I answered them that I was there to sell [Editor’s note: about 850 watches per year]. And when the crisis hit, I was quite happy to be able to continue selling, without changing my prices,” adds Journe.
The strategies of the independents confronted with the economic crisis: Part 1
The strategies of the independents confronted with the economic crisis: Part 3
The strategies of the independents confronted with the economic crisis: Part 4
The strategies of the independents confronted with the economic crisis: Part 5
The strategies of the independents confronted with the economic crisis: Part 6
Source: Europa Star October-November 2009 Magazine Issue