#Resilience


Pre-owned: it’s been a long time coming, but now it’s here

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December 2019


Pre-owned: it's been a long time coming, but now it's here

Nothing will ever be the same again. Long confined to the shadier corners of the digital grey market, fed by oversupply, short-term greed and brand managers’ bonus schemes, the “used” watch now has a new, more elegant name: pre-owned. Europa Star has collected several opinions about the evolution of this market.

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othing will ever be the same again. Long confined to the shadier corners of the digital grey market, fed by oversupply, short-term greed and brand managers’ bonus schemes, the “used” watch now has a new, more elegant name: pre-owned. Europa Star has collected several opinions about the evolution of this market.

ODILO LAMPRECHT, HEAD CPO EUROPE, BUCHERER
ODILO LAMPRECHT, HEAD CPO EUROPE, BUCHERER

“WE ARE READY TO REVOLUTIONISE THE PRE-OWNED MARKET”

What triggered your decision to enter the pre-owned market?

More and more people are interested in beautiful watches, and vintage models with a history are especially popular. There is rapidly growing demand. We have been keeping an eye on those developments for a long time. As watch experts, we understand that buying a pre-owned watch often comes with uncertainties. Our Certified Pre-Owned concept aims to give watch enthusiasts an entirely new platform and redefine the preowned watch business.

Can you share your expectations on the longer run?

Bucherer aims to revolutionise this market and reintroduce pre-owned watches into the luxury segment. After all, coveted brands and models retain, or even increase, their appeal over time. We can offer collectors a carefully curated range of rare models and limited editions that they would otherwise be unable to find. A good selection of vintage items additionally gives us access to new customers. They are the ones who probably wouldn’t spend a lot of money on a new watch. We also believe that the pre-owned concept provides us with an opportunity to boost our sales of new watches, because customers may trade in their own watch for a new model.

However, the competition is already tough on this segment…

There are plenty of companies in the market. But many of them are start-ups that rely primarily on online sales. Most sellers do not even have an offline presence. We sell offline as well as online. We believe that the offline range displayed in our boutiques is an important key to success. Customers like to be able to see and try on the watches. It turns the purchase of a luxurious watch into an emotional experience. With a company history dating back more than 130 years and a wide-spread presence in the market, Bucherer exudes tradition and important values, such as reliability. Trust is crucial in the Certified Pre-Owned business.

What are the next steps in your expansion plan?

We have global ambitions for our Certified Pre-Owned business. After Geneva, Zurich and Hamburg, there will be more outlets soon: in spring 2020 Paris and London will follow. But even if the Certified Pre-Owned offering has not yet a physical point of sale in a local Bucherer boutique, customers can still browse the range of our Certified Pre-Owned watches online.

PHILIPP MAN, CO-FOUNDER OF CHRONEXT
PHILIPP MAN, CO-FOUNDER OF CHRONEXT

“WE WERE NEGLECTED THEN FEARED, NOW IT’S FINALLY CHANGING”

“More and more brands understand that online selling is a very real phenomenon and is here to stay. At first we were not on the radar of the brands at all. Then we were greeted with a degree of fear, and finally now we have strong cooperation. As a result, we now work directly with 15 brands. The mindset of most brands is changing. What we really want is to become the partner of established brands when it comes to pre-owned. The ideal scenario for us would be to become like authorised retailers, but specifically for second hand. For a very long time, anything that was not authorised or official was considered ‘grey’. The term is not clearly defined. However, what is clear is that the industry has serious distribution challenges. To resolve them, a real understanding of actual stocks and prices is required. Brands are angry about discounts on online sales, and yet retailers do exactly the same thing in physical stores. Only, because it’s not public, they don’t have a problem with it... How can the industry get a better grip on inventory movements? The best solution would be a platform that welcomes both brands and retailers, pre-owned and new timepieces. And price parity between the store and the website that is good for the brand.”

PAUL ALTIERI, FOUNDER OF BOB'S WATCHES
PAUL ALTIERI, FOUNDER OF BOB’S WATCHES

“MARKET PRICES ARE CHANGING MUCH MORE RAPIDLY TODAY”

“The pre-owned business is hotter now than ever. And the first concern of the buyer today is not price but authenticity. Watches are expensive items, so customers deserve to get some guarantees. We help to ‘clean up’ the market by offering original watches, but there are still a lot of Frankenstein watches out there.

A new challenge is that market prices are changing much more rapidly than 10 years ago. Then, prices could change ten times per year. Now it’s once per week. A lot of factors explain this evolution: social media, shortage of steel models, a lot of press and excitement. There’s been so much attention on pre-owned that prices are much more volatile. For the most part, prices have been up. Some claim it’s a bubble. I don’t think so. The only element that could stop prices growing would be a global recession, way beyond the world of watches.

Another challenge: there are still a number of dealers that are a bit ‘shady’. We don’t work with dealers, all of our watches are purchased directly from individual customers. Moreover, I see more and more certification programmes established by the sellers themselves. This is wrong. The only person who can certify a watch is a third party, you cannot certify your own product. That’s a conflict of interest! If you want to certify a diamond, for instance, you go to the GIA, you don’t deliver your own certification.”

JOACHIM ZIEGLER, CEO, LES AMBASSADEURS
JOACHIM ZIEGLER, CEO, LES AMBASSADEURS

“WHAT WAS MISSING WAS A TRUSTWORTHY LINK BETWEEN DEMAND AND SUPPLY”

“When we launched our new CPO activity last April, we simply couldn’t keep up with the first wave of customers that were interested in this new service.

Even though the product is the same, the approach in dealing with used watches differs quite a bit from selling new ones, and it was a challenge for everyone involved. Our team has adapted quickly and pre-owned is now an integral part of our business.

The world is constantly evolving, and so is retail. With the watch business booming for years, there are large quantities of watches waiting for a second life in our clients’ drawers and safes. At the same time, we have seen a continuing trend for retro watches. So the supply is there, as well as the demand. What was missing was a trustworthy link between the two.”

SUSANNE HURNI, MARKETING DIRECTOR, WATCHBOX SWITZERLAND
SUSANNE HURNI, MARKETING DIRECTOR, WATCHBOX SWITZERLAND

“WE USE THE POWER OF TRACKING TOOLS AND BIG DATA”

“How can we have turned a blind eye to this phenomenon for so long? The brands have been a little arrogant in wanting to impose new watches. Young people have changed their consumption patterns and no longer necessarily want to own items for the long term.

We are neither a marketplace nor a consignment site, but currently own watches worth about $60 million. We only sell what we have in stock. It actually all began with a segment of the WatchBox app which enabled customers to register their collections online, to find out about and monitor the popularity of their watches. With new tracking tools and Big Data, we can easily identify and cross-check which watches from which collector interest which other registered collectors.

We offer a form of market cleansing that also keeps the brand image strong, rather than asking for knockdown prices or destroying watches. Letting retailers resell last year’s watches 40% cheaper or destroying stock only weakens the brand image and annoys collectors.”

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