For a long time, the watch industry has not clearly seen the benefits and advantages that it could draw from the internet due to the dangers, real or imagined, that clouded the view. The dangers of the web, it is true, are the tip of the iceberg. For example, who has not, at one time or another, been swamped with tons of spam e-mails proposing Rolexes and other watchesı Today, the internet has become the favoured vehicle – rapid, anonymous, always available – of the international counterfeiting networks.
Another reason for the reticence felt by watchmakers vis-à-vis the internet is more cultural in nature. The commerce of luxury has developed and grown because of its exclusive boutiques - intimidating to some - where everything, from the total thickness of the carpet to the attentive sophistication of the welcoming reception, has been carefully calculated in order to create a personal and very privileged relationship between the buyer and the seller. In a way, the retailer seemed to be saying, “Look at all the luxury around you, the lovely materials, the wonderful lighting. Here, we do not lie to you. Here, you are among like kind.”
The internet destroys this privileged rapport. It is a cold, impersonal medium, a tortuous labyrinth where it is difficult, if not impossible, to tell the real from the fake, the honest from the dishonest, or quite simply the good address from the bad. You find everything in this online universe except what the traditional world of luxury has made its insignia: reputation, discretion and prestigious address.
Yet, gradually, these hesitations are lessening as people become accustomed to first consulting, then using the internet in their private lives, from e-mails to secure bank payments, from shopping online to bidding for a treasured object on eBay or another auction site.
Consumers have realized the savings, sometimes substantial, that they can make by shopping on the internet. If they can save money buying a genuine DVD or a branded television online, why would a watch be any differentı
The aficionados have taken this new mode to heart. A collector that I know is adamant on this fact; from now on, he buys all his watches online. The first time, however, he admits to having had the jitters when he sent a couple of thousand dollars to a watch site that seemed authentic, even though it was located in Kuala Lumpur, halfway around the world from him. His fears were allayed when the authentic watch arrived at his doorstep, complete with everything that he was expecting.
In today’s world, the online buyer can also receive his purchase in rapid time for a journey that can be tracked – online, of course – around the world. Reassured by his first experience, my acquaintance has now become a serious online buyer. So, even though he lives in the heart of Geneva, a few minutes from his favourite brands, he buys his timepieces on the world wide web. Not unimportantly, the prices are 40% to 60% less than he would have to pay at the watch retailer nearest him. A serious impediment to using the local retailer.
His example raises several questions; all are important but in varying degrees. Are we now witnessing a gradual but irreversible transformation in the structure of retail businessı Over-informed, the consumer no longer needs to ‘touch’ an object before he decides to purchase it. He already knows everything there is to know about it. This evolution in outlook and attitude also contributes to demystifying the act of buying, since it is removed from the sumptuous ‘ceremonies’ that prevailed up to now.
On a totally different subject: How is it that very recent models of prestigious collections are finding their way so quickly to online sales sites offering such high discountsı Knowing that retailers who are able to supply such sites have margins of normally 50%, how can they be content with only a 10% margin from an internet saleı Even more difficult to explain are the discounts of 60% or even 70%. One can rightly wonder about the grey market, or even, in some cases, if sales are being used to launder money.
Still another question on a more positive note: Doesn’t it seem as though opportunities offered by the internet are helping to increase the watch culture and stimulate sales, and even perhaps to form a new generation of collectors, people that are in total tune with this electronic mediumı
Thus, the internet has a double face for the watch industry. It is rife with peril, yet it is also a source of stimulating opportunities.
It is exactly this dual nature of the internet that IC-Agency, a Geneva-based consulting company, is exploring. On one hand, IC-Agency conducted a vast study on watch consumption between October and September 2004, examining 25 million searches on the web, using search engines such as Google and Yahoo. They looked at internet users seeking real or fake merchandise.
On the other hand, IC-Agency is developing an entire series of exclusive tools allowing brands to profit from this fantastic medium. Mastering the evolution of the economic environment, business expectations, protection of the brand, and strategic reactivity are a few of the services they propose.
The following pages present a detailed look at the essential findings of the IC-Agency study and, at the same time, list possible opportunities for watchmakers who are ready to seize them.


Europa Star Magazine February - March 2005 issue