“Brands must limit production, control supply and stabilise pricing”


October 2017

“Brands must limit production, control supply and stabilise pricing”

“2016 was certainly a challenging year for retail. The increase in grey market activity and the aggressive pricing stemming from product dumping resulting from oversupply has undoubtedly damaged the traditional retail market for watches."


he increase in grey market activity and the aggressive pricing stemming from product dumping resulting from oversupply has undoubtedly damaged the traditional retail market for watches. While it didn’t affect our niche sector too much, we have noticed the retailers holding big brand names are really struggling during this price war.

Unfortunately, the longer-term implications of heavy price reductions are that service and support may suffer if watches are sold by short-term profiteers rather than genuine watch retailers with service and support structures in place.

While customers believe they are grabbing a great deal, this may not necessarily be the case. If non-legitimate or uncommitted retailers continue releasing excessive watch stock at reduced prices without the view to building longterm relationships with customers, clients may feel ‘let down’. This ultimately reflects badly on a brand, damaging its reputation, and is very hard to reverse.

In 2017, Define Watches relocated from a large city to a boutique holiday region which draws an international clientele and boasts year-round perfect weather conditions – even by Australian standards. This has evened out our sales cycle and exposes the brands to a broader cross-section of customers.

We actually added two brands to our collection, and found that other boutique Australian retailers we distribute to have also increased the number of bespoke brands they offer. Despite the tough year we found that customers were looking for something unique that represents value for money. But 2017 continues to provide challenges to the traditional retail sector. The market is beginning to expect discounts all the time, both in-store and online. If brands don’t make efforts to limit production, control supply and stabilise pricing the emerging market expectation may be impossible to reverse.

We strive to hold pricing in line with the global retail price structure (i.e. no discounting) and prefer to value-add with items such as insured, overnight delivery, personalised service, a VIP club, VIP events and other relationships.

Because Australia is so remote from the watchmaking HQs in Germany, Austria and Switzerland it was necessary for us to establish a service and warranty centre in Australia. In this way we can control the quality and turnaround time of repairs and minimise the cost involved with shipping and handling.

We carry the cost of our service centre, and the brands support us with international warranty parts when we repair the cases locally. In general the brands are very responsive and fair – another benefit of working with independent companies where your contact is often the watchmaker him/herself. Our strategy is to nurture a positive and open supplier/retailer relationship built on trust and respect, and pass this on through the chain to the customer – creating a uniform sales experience from manufacturer to customer. As Define Watches specialises mainly in independent German watch brands we have no direct competition in our area. Australia is also a relatively young and small market for watches so, with the exception of only a few stores in our major cities, most brands retail through a store-in-store method in our market.

We do run an online boutique but are very careful to respect the sales territories of our fellow distributors, as this is the only way to ensure everyone has a chance to succeed and the customer is always receiving a fair offer. (This is simply solved by allowing sales to regionally registered IP addresses only.) But online retail is very much price-driven. The online shopper is primarily driven by best price, at least in the first purchase instance. We endeavour to represent brands we trust to uphold uniform global pricing.

The retail environment is becoming more and more clouded with experience shopping, where the event or value-add is becoming more important than the product. Whether the expense of creating a product experience translates to the bottom line, remains to be seen. Big watch groups with big budgets have always supported the idea of creating a brand ‘aura’, but now the product/price dump that is happening is somewhat at odds with the image they have spent so long to create. It will be interesting to see how loyal the market base stemming from uberisation is over the long run.

Because the brands we represent are niche, independent companies, our customer base has always consisted of early innovators. Over the past 3 to 5 years, we have noticed a trend towards a younger, trend-conscious male. Twenty years ago these men were after big names, but now they want something different, something unique. They are savvy consumers who know where to find products and embrace multimedia to research their product, source it and acquire it. Interactive programs and apps are becoming increasingly powerful and advanced. Simulators and configurators allow people to play with watch design and see how the end product could look on the wrist. As such, holding a watch is less of an issue than it was even 10 years ago.”


Name: Define Watches
Boutique: Noosa, Australia
Category: High-range and middle-range
Brands represented: Armin Strom, Benzinger, Bruno Söhnle, Dornblüth & Sohn, Habring2, Hentschel, Hanhart, Lehmann, MeisterSinger, Moritz Grossmann, Mühle-Glashütte, Sinn