ow to reconcile the classic watch distribution networks and e-commerce? “Traditional” retailers, especially the smaller ones, massively view the digitalisation of sales as destructive for their historical business model, whether they are faced with online stores operated directly by the brands or by new “pure players”.
As for the watch brands, they are claiming loud and clear that the omnichannel model is the only one for them – in other words, the possibility of buying their products at any time, in any place, in a boutique or over the Internet. A number of initiatives are currently being launched to find a solution to this tricky equation. In short, to transition from a competitive mindset to some kind of collaboration.
One such initiative is the BrandCloud platform. Europa Star met the two men behind it, Andreas Felsl and Emmanuel Vuille, who have been on the watchmaking circuit for a long time. “The Internet is killing watch distribution today,” Andreas Felsl believes. “It’s time to do something about it, because when brands begin competing with their traditional retailers online, they’re starting a dangerous game."
Used until now in test mode on the entrepreneur’s own brand, Horage, the BrandCloud tool aims to allow brands to sell online through their retailers, not in competition with them. It also allows both brands and retailers to share precious data in real time: today, only watch brands that operate their own stores really know where their products are, when they were sold and, above all, to whom!
Combating surplus stock
Here is an example, courtesy of the entrepreneur, of how this digital solution actually works: “One of the big problems of the watch industry is the surplus of unsold stock, which occurs regularly. You then find watches sold with a 30% discount simply because of a lack of information, whereas somewhere else in the world they could have found a buyer at the normal price.”
Holy smoke! Has someone at last found a solution to the “destocking” that feeds the parallel networks? This question is providing food for thought at many a watchmaker HQ today, when the market for digital sales of pre-owned watches is gradually being integrated into the official channels, as illustrated by the recent purchase of Watchfinder by Richemont. The platform designed by the entrepreneurs of BrandCloud would, incidentally, make it possible to include a pre-owned sales site launched by a brand – and we can anticipate a proliferation of such initiatives in the near future.
Basically, BrandCloud is cutting through the hype. While today numerous obstacles are seemingly preventing the smooth functioning of the watch distribution channels, it is proposing a global solution via a platform based on “managed” transparency. That’s a word that might stick in the industry’s throat every now and again – but is unavoidable in the era of the Internet, albeit in some ways ambiguous.
A user’s guide
How does the platform actually work? At the “macro” level, firstly the solution connects all those involved in the watch distribution chain who revolve around the customer: the brands, of course, their subsidiaries and distributors, then the physical and virtual points of sale, as shown in the diagram below:
Looking at it from the “micro” angle, from the point of sale’s perspective, it provides a real-time inventory for the seller whatever the brand (if several brands implement the system); an order-taking feature linked with the state of sales, which is also identified in the system, and to the inventory; and a payment tool that allows new sales to be integrated into the system directly thanks to the smartphone and its sacrosanct mobility. In short, the idea is to create a “virtuous circle”. And above all, to provide greater control over sales and logistic flows while allowing each seller instantaneous access, via their smartphone, to the entire infrastructure of the store where they work.
An antidote to labyrinthine solutions
“Today, major companies always buy huge CRM (Customer Relationship Management) solutions like Salesforce, or ERP (Enterprise Resource Planning) solutions like SAP, which are huge, labyrinthine solutions that are not really suited to the new digital reality," says Andreas Felsl. “First and foremost, our system makes it possible to also include smaller retailers. After that, what will really distinguish the different players in distribution from one another will be the level of service and the quality of data to which the seller will have access about their customer base and the products of the brand they represent.”
It is not easy to sum up in a few lines a project that is “easier done than said”. Because it calls for a drastic change in mentality among the players within the watch industry with regard to the way they sell their watches. The two entrepreneurs are aware of the revolutionary aspect of their project, which they intend above all to be inclusive and to bind the industry together: “The idea is also to support small businesses, not to leave everything to Amazon and other major players who are in the process of killing the smaller players,” explains Emmanuel Vuille.
It is clear that if adopted, this proposition will also have to be suited to players of often extremely diverse realities in the watch sector. Once the platform is up and running, BrandCloud functions on a basis of a 1% commission on sales. Is the watch industry gradually entering the “collaborative economy”? Note that in the United States, other players are also looming in the increasingly digitalised independent distribution sector. We will be coming back to that “hot topic” in the near future!
The curious among you can find out more about this ambitious project on Brand Cloud. You can also read Andreas Felsl’s series of articles on trade and retail here.