hese retailers were largely family-owned businesses that stocked a variety of different brands; they were well established in a clearly delimited territory, with a well-understood and loyal clientele. In those days, people might refer to “my watchmaker” as they might have talked about “my baker” or “my florist”.
This model, which survived throughout most of the 20th century, has gradually been eroded, to the point where it is now virtually obsolete. Many factors have played a part in this transformation. Some, such as societal and technological developments, are external to the watchmaking business. But others are entirely its own doing. First came the big groups’ ascent to a position of power, and the brands’ gradual reassertion of direct control over distribution, first in the form of subsidiaries, later through the proliferation of own-brand boutiques. Then came the internet revolution, which facilitated the creation of a direct link from producer to consumer, without the need (or expense) of numerous intermediaries. The edifice started to crumble.
Watchmakers have been notoriously slow to seize all the opportunities afforded by the internet. After investing heavily in bricks and mortar (the bricks to vertically integrate their production, and the mortar to build their luxurious boutiques), it was only natural that they should try to resist the inexorable onward march of e-commerce. Now, they no longer know where to turn. The old model has been placed on life support, but that hasn’t made the new landscape any easier to read. The vertical integration of manufacturing has had the unfortunate side-effect of encouraging overproduction, which in turn has fed into a burgeoning grey market.
Cracks are starting to appear in the mono-brand boutique model. Not only does it cater exclusively to a highly circumscribed and already loyal customer base, but any increased profit margins from the physical stores are entirely swallowed up by the running costs and exorbitant rents dictated by their prestigious city-centre locations. It’s a zero-sum game. Or worse. Clients, who these days often know more about the watches than the sales assistants trying to sell them, have been put off by outrageous price rises.
Millennials are eschewing their parents’ ideal of luxury and turning to vintage chic, at a single blow overturning the brand hierarchy and forcing them into stylistic contortions. And we certainly haven’t heard the last of the smartwatch, despite its being dismissed as an irrelevance by most conventional watchmakers. Smartwatches have added to the general confusion and the mixing of genres, as well as cutting a swathe through the low- and mid-priced segments. The backdrop to all this is the internet: a seething hive of special offers, discounts, amazing (or suspect) deals, opportunities, consumer-to-consumer trades, comments and opinions. Anyone intending to buy a watch today is spoilt for choice. Or, perhaps more accurately, they are overwhelmed and confused by the tyranny of choice available today. Where will it all lead? That’s anybody’s guess.
In an attempt to see the wood for the trees, Europa Star Time. Business interviewed various players, experts, analysts and retailers from around the world. We would like to thank them for their honest and open responses. From these testimonies and analyses, which bear witness to the dozens of different ways in which the actors concerned are attempting to keep their heads above (increasingly murky and turbulent) water, one vital lesson for the watch industry has emerged: bricks-and-mortar and internet retailing will have to find a way to coexist in the future. Steven Kaiser, a consultant in the USA, has coined a phrase that sums up the situation very neatly: Brick-and-Click Watch Retailing.