With China slowing down, brands are turning to other, more mature markets. The US market, in particular, is showing some signs of recovery, though the turn-around hasn’t been as fast as many would like.
The American shows this year in Las Vegas (JCK, Swiss Watch and Couture) seemed to have been a little slower and not so well attended, but the retailers we talked with are still optimistic about the future of the US market.
Here are five key retailers and what they have to say about their home market:
St. Louis, Missouri
“On a rolling twelve month calendar sales have continued to outpace previous years, and we’ve definitely been able to feel more confident in the amount of store traffic and sales we’ve been able to forecast and attain. There’s a growing sense of stability that we’ve really not seen since about midway through 2008.
Consumer confidence continues to grow, at least in the St. Louis market. While consumers are, and always will be price conscious, when their perceived buying power begins to increase then we see that more consumers are willing to pay a premium for expertise and service. Value isn’t directly related to price alone, so our “value” proposition of selection and expertise resonates better when consumers don’t feel like they just need to get the best price alone.
- Scott Bolosky, Clarkson Jewelers
“Internet sales from non-authorized retailers continue to take business from the brick and mortar retailers. We offer something they can’t and some of that is customer assurance.” Scott Bolosky, Clarkson Jewelers
While we’ve seen ups and downs for sure, we were able to rein ourselves in and weather the storm. While we continue to grow I have to believe that the worst is behind us, and we’re optimistic for a record twelve months coming up.
I am excited about our growth. We’re a small, privately owned business.
That said, our focus is always on growth, but not at the expense of the service and expertise we provide. My thought is this, if you can grow a business continually and profitably while constantly creating consumer advocates, champions, then you’re doing something right, and that’s always exciting.
While we’ve always done really well with Rolex, we’re seeing great sales trends with that brand this year. They’ve done some great things with product designs and introductions, and that always helps. Rolex clients are loyal. We’ve always done really well with the Rolex Submariner, but the Datejust II is really strong as well. They just added a new version that features an all steel polished bezel that we think is going to sell really well.
This is nothing new, but internet sales and sales/service from non-authorized retailers continue to take business from the brick and mortar retailers. Fortunately, our fix to this is simple - we’re not the destination for the internet shopper. Our clientele isn’t always looking for the best price alone. We offer something they can’t and some of that is customer assurance. They compete with us, but not vice versa. This has worked for us and we’ll stay the course.
Honestly, our largest and most extravagant events typically haven’t performed all that well, and we’ve tried a lot of them. We are becoming much more focused on the individual and personal attention. We’ll be doing much more in the way of private dinners, VIP events and personal connections.
Our brand really doesn’t resonate well with a mass of people. We focus on personal relationships, so when our large, non-personal events don’t do so well it might just mean that our “real” brand is resonating with clients, and that’s a good thing.”
“Business overall is good in a general sense. There are definitely more high-end transactions than in the mid-range. The wealthy clients out there still have the disposable income to treat themselves. But the way they are treating themselves and the items they are pursuing are different than years ago.
There is a focus on classics and timeless, real statement pieces. Watches in rose gold for men are on the shopping lists more than in the past.
- Armen Darakjian, Darakjian Jewelers
For us, this year is hugely different. Darakjian Jewelers moved to Birmingham Michigan, Michigan’s only “city” with all the financial institutions and high-rise high-end condos, and a selection of boutique restaurants. This year it seems that social media is playing a larger role in getting the word out, for promotion and endorsement. The one thing about social media is that it’s demanding and technology has made us all part of the “IGG” – the Immediate Gratification Generation.
“Yes, there are sales of quartz watches but the real growth and the cultivation of clients for longevity of the relationship comes from the mechanical watch sector. This is where the relationship between Authorized Dealer and the client gets formed and strengthened.” Armen Darakjian, Darakjian Jewelers
The brands are getting stronger and the clients are recognizing them. Whichever brands a retailer carries, they can still make it a great success. It’s not limited to a few names. You’ve got to run with what you have. Be passionate, be enthusiastic and know your product. I am most excited about our new location. In the heart of the action for the Detroit suburbs, Birmingham drives clients to our quaint city with restaurants, lounges, patios, and a great residential neighbourhood, all within walking distance. The shopping/social scene in this area is comprised of generation X’s.
Our best selling brand in jewellery is Tacori in bridal and in watches, Audermars Piguet. For Audemars Piguet there has been an heightened interest in the Royal Oak series. And an even greater desire for the rose gold versions, where years ago everything seemed to be steel Offshore only.
The biggest challenge facing the Darakjian Jewelers brand is making everyone in our community and the watch community aware of where we are and what we do. Even being in business for 50 years (which we are going to celebrate October 2014), you’re never done with the message. Our company is based on customer service and we strive every day to create an experience for our guests that they haven’t had and will not get anywhere else.
I think brands are refocusing back to the US market. They have to. The spike in the China market was an opportunity that brands had to take advantage of, like cultivating a new client. Now that China has been slowing down coupled with the situation in Europe, the US is still a huge market and hungry for high-end mechanical watches.
The US is slow and steady growth compared to China, but the US customer is here with their wallets open and ready to buy. The brands just have to be conscience of the relationship between what they are offering and at what price.
Mechanical watches in my market are the market. Yes, there are sales of quartz watches but the real growth and the cultivation of clients for longevity of the relationship comes from the mechanical watch sector. This is where the relationship between Authorized Dealer and the client gets formed and strengthened.”
Beverly Hills, California
“Business is up and down, you really don’t know what’s happening until it really happens. We’ll have one great day, followed by two bad days, then one okay day. Our Chinese clientele has dropped about 35% this year.
- Korosh Soltani, David Orgell
The American consumer is not interested in buying a new watch as often as the past. We are always hopeful, we try to have a healthy stock of watches, new pieces are important for us. I am excited that we are building two shop-in-shops in our store - Ulysse Nardin and Carl F Bucherer. Our best-selling brand is Ulysse Nardin and our best-selling watch is SevenFriday, because of the units we sell per week, and the requests we get.
“On Rodeo Drive …the watch manufactures are opening their own stores …We have the advantage that we can show customers 20 brands, and they have only one.” Korosh Soltani, David Orgell
Our biggest challenge is that there are too many watch stores on Rodeo Drive, the watch manufacturers are opening their own stores, we have built brands in Beverly Hills and the surrounding area, and they come in and decide, well they can do it themselves, and make double the profit - they soon learn that it’s not easy to sell watches in Beverly Hills.
For example, Chopard closed their doors last year. It’s more of a marketing expense for them, we have the advantage that we can show customers 20 brands, and they have only one.
Our biggest promotion for 2014 is billboards in the Los Angeles area, with doing some special events for the launch of our shop-in-shops this year.
I don’t think the brands are refocusing on the US one hundred per cent, but they are looking to regain consumers in the US with better price points. In regards to mechanical pieces, many of our clients are looking for automatic/mechanical pieces instead of quartz. Our Chinese customers, for example, only purchase automatic mechanical timepieces.”
Fort Lauderdale, Florida
“We ended our season on a good note. Though we are heading into our off-season, we are optimistic that we’ll be able to do some good numbers since Fort Lauderdale and South Florida in general are strong tourist destinations over the summer.
Although the numbers this year are similar to last year, there does seem to be a bit less energy and enthusiasm out there both with clients and amongst other industry professionals I’ve spoken to.
I am optimistic for the future. We came across some great finds at the Vegas show and we have some very exciting plans for the fall and holiday selling seasons to drum up business, including some events and a new marketing campaign.
“I am optimistic for the future. We came across some great finds at the Vegas show and we have some very exciting plans for the fall and holiday selling seasons to drum up business”
First, I am excited about some new fashion lines I found in Vegas, bold pieces that are fashion forward but will still be relevant for many years. We also have some exciting lines that we are considering adding for the fall.
I’m not sure if it is a problem, but we have wanted to convey a message to the younger generation that we have price points for all. With our new advertising campaign and also by being more cognizant of the pieces we feature editorially and in our catalogues, we are beginning to see a difference. We are also maintaining a strong digital presence with lots of activity on all the major social media platforms as well as on our website and apps.
We are very excited to have just recently announced a new brand ambassador for Levinson Jewelers, Lauren Tannehill.
Lauren is a beautiful young model and her husband Ryan is the quarterback for the NFL’s [National Football League] Miami Dolphins. The campaign images are very different for us, young, fresh and will hopefully convey a welcoming message to the younger demographic.
I do feel that the US is getting more attention from brands. Automatics are still the most in demand for us, and I see more hand-wound watches on the horizon from some watch companies.”
Northeast US and Florida
“First quarter business was difficult in the Northeast and strong in our Florida markets. The weather was a determining factor in the drop of sales in the Northeast due to reduced foot traffic and closures. In fact, our stores in New Jersey were closed for a total of seven days.
- Anne Russell, Hamilton Jewelers
“The fickle luxury consumer is a concern for us … Our marketing and client communications need to constantly evolve and sometimes it is hard to know the most efficient method for connecting with our target audiences.” Anne Russell, Hamilton Jewelers
The fine jewellery business has been strong, especially in the collections Hamilton designs and creates. There was a bit of softness in the higher watch price ranges earlier in the year, which we anticipate being corrected in the second quarter. I continue to be optimistic and amazed by the new creations from our partners each year and our clients’ interest in the novelties.
Tudor is exciting to me. I like having something to offer a client starting at $2500 that has brand heritage and great design.
Patek Philippe, with which Hamilton has a relationship dating to 1938, continues to be a very strong brand for our business and we are looking forward to their 175th anniversary collection at the end of the year.
Our best-selling watch is whatever we sold today!
The fickle luxury consumer is a concern for us. We have extensive data on client purchase histories, buying patterns, and lifestyles – but it seems as if the relevance of the data is constantly changing. For instance, one year Facebook is a key medium for targeting younger consumers, the next year the largest number of Facebook users are age 45+.
Our marketing and client communications need to constantly evolve and sometimes it is hard to know the most efficient method for connecting with our target audiences. We are always testing and trying to improve!
Digital and specialized events are our focus for 2014 and beyond.
For instance, our annual watch fairs in Princeton and Palm Beach are highly anticipated by both our staff and the collector community. The Princeton event takes place each year during the weekend of Princeton university graduation, when over 25,000 people visit our town from around the world. This year’s event, our 20th consecutive year, brought over 1000 guests through our doors to view and choose from our timepiece presentation.
Several of our partners chose to join us for these events, and are always successful in presenting the brand and providing the consumer with added value and information.”
Source: Europa Star August - September 2014 Magazine Issue