atch brands and independent distributors have had a long and fruitful relationship. For decades, success for brands partnering with distributors was synonymous with volume and physical presence. Brands had to be physically everywhere to reach consumers, and that meant a wide distribution network. The bigger your distribution network, the bigger the volume you could move. Watch brands relied on distributors to drive their expansion and increase sales without incurring the costs of running the business directly.
Well before the pandemic hit, brands were already exploring direct retail. Direct retail seems the most appropriate and effective way to drive the brands’ value and identity, to strengthen relationships with their customers and to have greater control of their commercial strategy. Many watch companies – especially the big ones – opened local and regional subsidiaries to implement this strategy.
“Many digital natives are now looking to redirect their strategy towards bricks- and-mortar retail.”
Then came the direct-to-consumer approach. For brands, selling directly is not only more profitable, it gives them access to huge margins, often compensating for the decrease in volume. But it also allows them to create a one-to-one relationship with the consumer, gathering more data along the way (but also facing the challenges that used to fall to their distributors in the past).
- Key data from the Watch Distributors Directory’s latest study on the global distribution of timepieces
So, is there hope for independent watch distributors? For emerging or local watch brands looking to gain name recognition in some specific markets, partnering with distributors is important. Distribution partnerships can help them with distribution and customer service while building brand awareness in new markets.
Most young brands can’t afford to spend enough on digital marketing to get the presence and competitiveness they need through their own channels. Distributors can prove to be beneficial if added into their strategy in the initial stages of their business, and many digital natives are now looking to reorient their strategy towards bricks-and-mortar distribution. Nothing can replace the emotional power of physical presence.
- Japanese brand Minase has partnered with its Middle Eastern distributor 10tenlabs to launch the Divido Arabica Edition.
Sandwiched between watch brands and retailers, and with brands increasingly tempted by the direct-to-consumer approach, there is no doubt that the watch distribution industry will see more change over the coming years. Watch distributors who embrace the challenges of digitisation and adapt their business model, their services, and also their corporate culture to the ongoing social and market changes will ultimately emerge stronger.
1. What is your company’s background story?
2. What impact has the pandemic had on your activities?
3. Is there still a promising future for independent watch distributors?
4. What investments in e-commerce look most promising to your company?
“In a post-Brexit UK, our role is even more valuable”
- Monica Porracin, The Blue Company
- Since: 2008. In: United Kingdom. Brands: Doxa, Junghans, Maurice Lacroix, MeisterSinger, Mühle-Glashütte, Scatola del Tempo, SwissKubiK
1. Story: I am the founder and managing director of The Blue Company, a watch and watch accessories distribution company, established in London in 2008. I started the company from scratch, as a foreigner and a woman with no industry connections or experience, in a male-dominated environment. However, I was lucky to be in the country of opportunity, the aptly named “Great” Britain, a meritocratic land where nationality or gender do not count for much. The segment we are active in is the mid-luxury bracket with fine watch brands whose price goes from £500 up to £10,000. A significant milestone was the addition of Junghans to our portfolio seven years ago. Under our management, the brand was nominated for “The Rising Star of the Year” award in 2015, I felt that was also the moment we received recognition for our work as a distributor in the UK market, from both retailers and brands. All the brands in our portfolio have a distinctive DNA and a rich heritage; this is by design and not by chance.
2. Pandemic: The UK is known to be an extremely advanced country when it comes to online platforms, and consumers here are very comfortable purchasing online, whether it is food or cars, which has put this country in an advantageous position throughout the pandemic. Dynamic retailers have adapted very quickly to the situation and we have clients who have been able to ride the wave and grow sales in 2020 despite everything. March and April 2020 registered a slowdown in sales for us, but from May 2020 onwards we went back to a “normal” monthly turnover and even grew, registering a +10% growth at the end of the year.
3. Future: I strongly believe there is a future for distributors. In the UK most of the major brands have their own offices in London. However, there are still independent watch brands out there which prefer to work through distributors rather than open their own branches. As a watch brand, if you want to open a branch in the UK, it must be in London, and possibly in the most exclusive addresses, which have a very high cost, and this is not something that is feasible or worth doing for every brand. This means there is still a necessity and space for a distributor to be in the game. And today, in a post-Brexit UK, the role of the distributor is even more valuable if the brand doesn’t have a presence in the UK, as they are the one sorting all the issues connected to customs clearance once goods from Europe land in the UK. It is essential for a brand to have a representative who knows and understands the market. It is unrealistic to believe a brand in a country can be managed directly from a head office in Switzerland or Germany.
4. E-commerce: Currently, our web page is just a small step up from a digital business card. We don’t plan an aggressive development through e-commerce, we leave that to our dealers who are the experts. We have recently started to build up our e-shop, but we don’t aim to take any business from our partners; the aim is to increase visibility of the brands and direct traffic back to retailers.
“In the Middle East, there has been a fundamental digital transformation”
- Khaled Zainalabedin and Mazen Ebrahim, 10tenlabs
- Since: 2017. In: Bahrain, Saudi Arabia, Kuwait, United Arab Emirates, Oman, Qatar. Brands: Sinn, Alexander Shorokhoff, Kudoke, Minase, Hanhart, JS Watch Co, Cuervo y Sobrinos, Tockr, Garrick, Artya, and more
1. Story: In early 2020, we launched 10tenlabs, which strives to change the face of watch retail in the Middle East by introducing a digital platform catering to watch collectors and enthusiasts in the region. We focus mainly on independent brands and selected high-quality microbrands. Our business includes an online boutique offering about 23 watch brands, as well as a watch club community and a lab to craft highly exclusive limited editions. So far this year, we’ve successfully curated ten limited editions with our partner brands, including four completely sold out editions with Kudoke, Minase, Alexander Shorokoff and JS Watch Co.
2. Pandemic: By moving away from brick-and-mortar retail and focusing more on digital platforms, we have been going in the right direction. The Middle East’s retail market is undergoing tremendous change and is heading towards digitising aggressively after the pandemic. Consumers are becoming more e-commerce savvy and we have seen a very healthy growth in our sales during Covid, being an e-commerce player.
3. Future: Yes, indeed. With platforms like ourselves and smaller boutiques that specialise in offering independents, this category of brands gets more focus and attention, versus huge retailers that offer large numbers of high-profile brands and put less effort into promoting independents. As some waiting lists at authorised retailers become endless, independent retailers and distributors have the opportunity to capitalise on a large market segment that will be uncatered-for by these brands.
4. E-commerce: Artificial intelligence (AI) and using leading Fintech companies to ease payment processing, as well as further enhancement of digital retail systems.
“Close, proactive and adaptive relationships”
- Mohammed Ravat, Bellagio Jewellers
- Since: 1950. In: South Africa. Brands: Franck Muller, Bell & Ross, Oris, Nomos
1. Story: Our family has been in the watch and jewellery business for over 70 years. Our company originally specialised in retail, followed by a parallel evolution into watch distribution in South Africa over the past ten years. We have represented a cross-section of watch brands over this period but currently represent and distribute Franck Muller, Bell & Ross and Oris in the country.
2. Pandemic: The local South African retail industry, and more specifically the watch and jewellery industry, has been severely affected by the onset of the pandemic. A high percentage of the industry is dependent on tourism, which has come to a standstill. In addition to this, the local economy has struggled to come to terms with the limitations brought on by the pandemic situation.
3. Future: The pandemic situation has brought into focus the importance of personal relationships, between the watch distributor and the retailer, and the retailer and the end client. Close, proactive and adaptive relationships are imperative for the survival of the retailer and the distributor. End clients want to know that they are purchasing value, especially during clouded and uncertain times such as the one we are currently experiencing. And they can only get this reassurance from independent, owner-run stores. This logic holds true for distributor-retailer relationships, which are seldom genuine partnerships, especially when retailers are dealing with any of the corporate brand subsidiaries. These relationships are often very rigid and don’t allow for quick adaptive strategies and understanding. Independent retailers and distributors that are able to survive will have the opportunity to grow and have a promising future, together.
4. E-commerce: Social media platforms such as Instagram seem to be the most promising.
“More like a full all-round marketing agency”
- Christophe Hoppé, Bausele/Temporel
- Since: 2011. In: Australia, New Zealand and Pacific. Brands: Girard-Perregaux, Bausele
1. Story: We have two activities. One is the development of our own brand called Bausele, a Swiss Made watch brand that I founded in 2011 in Australia, shortly after moving from Switzerland, where I was Chief Financial Officer at Universo (Swatch Group). Bausele’s pricing segment is CHF 300-800 and it has recently been commissioned by the Royal Australian Air Force to be the official watch of their centenary in 2021. Another activity is the distribution of watch brands: we are the official agent for Girard-Perregaux in the premium and luxury segment and we are looking for more brands to represent in this part of the world.
2. Pandemic: When the pandemic hit at the start of 2020, Australia closed all its borders very early, limiting the retail business drastically. We had to concentrate on the only things we could directly control. For Bausele, we focused all our energy on our online channels, and the results have been nothing but exceptional. The brand grew by 300% in revenue year on year, also raising awareness so much that we have been contacted by retailers outside of Australia (we recently opened Lotte in South Korea). Our biggest challenge is to keep up with the production and manage our cash flow. For Girard-Perregaux, the situation is very different as we were heavily reliant on Asian tourism. We concentrated more on the local market and spent time educating collectors and training retailers. Luckily, as we have strong connections and long-term relationships with the Australian watch community, our initiatives, such as a video tour of the manufacture, were very well received. Our biggest challenge remains the lack of tourism, which is set to last until 2022, as the government has confirmed that borders will remain closed.
3. Future: The alternative for brands would be to have someone in-house locally. Our difference lies in the fact that we are not “just another brand manager”: we are personally, passionately and financially invested in the brand we represent. The old model of watch distribution where you rely solely on your retailer’s staff network and “walk-ins” to sell watches will be tougher. Our approach is different. Apart from the few brands that are selling by themselves now, we all compete for the same customers. To differentiate, we consider ourselves more as a full all-round marketing agency. From the start we put a lot of emphasis in building a database of high-quality potential customers that we can then educate directly through monthly newsletters, personal contacts, lunches, dinners, social media, private messaging, and retargeting. Of course, training, and personal relationships with the store staff is a must as we rely on retailers to sell our watches. We combine the best of both worlds (traditional and digital). What also makes us unique is that we have our own brand, that we have been successfully developing for the past 10 years. The watch community members respect us for that, and we know the practical side of getting sales through the door, not just the theory that employees at head office are so good at...
4. E-commerce: E-commerce is a growing beast in constant evolution. You have to make sure the customer journey from acquisition to conversion is as optimum as possible, but there are new tools launching every day, and it’s hard to stay on top of everything. So if you are working with a platform like Shopify, the technical side is covered – their app store and integration is amazing. From a conversion point of view, anything that makes the product stand out is good, such as good 3D modelling where the customer can experience the watch on their wrist from anywhere.
“We have expanded to multiple product categories”
- Emiliano Shnitzer-Bartocci, CTE Watch Company
- Since: 2002. In: United States, Caribbean Islands, cruise ships and travel retail. Brands: Fossil, Timex, Kenneth Cole New York, Nautica, Ice Watch, Festina, Maserati, Invicta, Kronaby, and more
1. Story: My father-in-law, Meir Shnitzer, and his business partner Jose Luis Waingarten started the company together in 2002, after many years of experience in the watch industry individually. Today we not only cover the United States but also the Caribbean Islands, cruise ships and travel retail segments. We have also expanded the categories that we operate in from watches to include handbags, leather goods, footwear, jewellery, sunglasses and luggage. We have something to offer to almost every customer type.
2. Pandemic: The biggest impact has been on the cruise ship and travel retail business. This business went from growing every year to zero within a few weeks. The biggest challenge that we face is finding great people that want to work in the space that we are in.
3. Future: There is absolutely a future for independent watch distributors. There are many brands that are good at managing large retail chains or large customers, but have trouble handling the needs of small independent shops. There is also the matter of logistics, and generally handling the particular needs of different territories. Our location in South Florida makes logistics to the Caribbean much more convenient for most of our customers. The biggest difference is that we are not corporate. Since we are a family run business, we can get our teams decisions and troubleshooting very quickly. We are also very dynamic and can treat each customer differently depending on their needs. Having information from both the brands (as to what is coming out) and our customers (as to what the end consumer is looking for) helps us identify new trends fairly quickly.
4. E-commerce: We are investing in systems that have more automated but personalised touch points with our customers. Our society has changed, and even more so in the last year with travel restrictions. Today, our customers are using many different communication types like WhatApp, SMS and email. So, we are developing ways to always be connected and present with our customers even if we can’t physically be there.
“Only a few will make it”
- Arnauld Lapierre, Equation of Time
- Since: 2008. In: Americas. Brands: Perrelet, Giuliano Mazzuoli, Reservoir, David Candaux, Leroy
2. Pandemic: After putting the economy on hold for three months, the pandemic allowed people to save money and keep their income, as well as to further develop a real need to buy, but only with the brands available on e-commerce. At the same time, some brands produced less, making the market drier and sending prices higher. The result is an increase in the gap between the haves and the have-nots, for both consumers and brands.
3. Future: Yes, of course, but the road is not for everyone and only a few will make it. They have to represent brands with a strong and clean background, which means fundamental assets in products and finance, as well as a strong team. In our case, we offer alternative independent brands for people who want to wear authentic Swiss watches for a reasonable price. Those who are tired of waiting forever for their watch or paying a very inflationist market price find they have other options, as independent brands offer a strong history, product and attractivity. The challenge is to let the public know they exist! So you have to target special market segments with a very limited number of retailers that still offer space for variety.
4. E-commerce: As a distributor, we rely on the brands’ or the retailers’ efforts to take a strong position in e-commerce. Online, it is also a battle between the few luxury brands that everyone wants because they are taking over the social media networks, are assumed to increase in value over time and represent social status, and the independents. The space for independents is now limited to the best ones, which offer a very strong design ethos with an alternative, original approach to communication and a lot of patience. The jewellery business, however, is less affected by the above “addiction” and there is more space for any brand that offers a creative product at a fair price or image.
“It’s key to invest in limited edition models”
- Taketo Watanabe, GM International
- Since: 1995. In: Japan. Brands: Raymond Weil, Corum, Edox, Louis Moinet, Salvatore Ferragamo
1. Story: We started out by handling Givenchy fashion watches, and created the fashion watch movement in Japan. Based on this success, the company became the first distributor of Frédérique Constant in the world and a key player in the expansion of the brand. Our segments include fashion watches, divers’ watches, classic watches and complication watches for a wide range of price points and target customers.
2. Pandemic: The inability for consumers to go out and the closure of sales outlets, especially in department stores, have been a key factor in the decline in sales. The nature of the watch product requires close communication and an in-depth understanding of the product in the relationship between distributor and retailer, and retailer and customer, so new methods are required in the future.
3. Future: We believe that we still have a promising future. Our strength and key strategy is not only in mass communication through advertising, but also in each and every small communication activity that we carry out face-to-face with our retailers and customers in order to make them like our brand.
4. E-commerce: We see e-commerce as one sales network that is necessary in a pandemic environment. We believe that it is important to invest in limited edition models that can only be purchased through distributor-driven e-commerce. We also believe that there will be a growing demand for expensive watches targeted at high-income earners, so we will continue to consider new high-value brands.
“A response to the vacuum left in wholesale distribution”
- Thomas Herzog, Premium Brands Agency
- Since: 2019. In: Austria, CEE, Russia. Brands: Ebel, MeisterSinger, Czapek & Cie, Triton, Anonimo, WOLF1834
1. Story: My agency results from 25 years’ experience in the luxury watch business and aims to offer more diversity and variety to the end consumer. It is an answer to the vacuum created in wholesale distribution by big organisations and groups in the premium segment over the last years, as they focused on concentration and savings in sales. They moved from the personal luxury business to formatted sales concepts, using digital power. My brand portfolio is mainly oriented to independent brands that offer a unique segment but always have in common the following aspects: design, heritage, finish and access to affordable luxury.
2. Pandemic: Covid-19 harmed my business in terms of new openings and acquisitions, but I was able to consolidate distribution and work on very close “clienteling” to strengthen customer loyalty. I also created my own website. The rebound in sales comes from identifying and discovering new and better opportunities to generate business.
3. Future: Yes, indeed. My approach is to offer more than a product, and beyond representing brands, my services also cover customer care, training and any kind of digital support.
4. E-commerce: E-promotion rather than e-commerce! I understand digital platforms as ideal tools to provide information and convey the emotion of the brands. Most of our luxury products are closely associated with emotions, rare moments and special experiences. Therefore, we should provide the opportunity to meet the product. But there are also some items for which online sales are appropriate, for instance the watch boxes and jewellery cases from WOLF.
ABOUT THE WATCH DISTRIBUTORS DIRECTORY
Co-founded by Thomas Baillod and Thierry Huron, the Watch Distributors Directory is a unique B2B database providing access to companies’ information within the watch distribution industry worldwide. Europa Star is a partner of this ambitious initiative and all clients also receive access to our digital archives going back to 1936.