Time to Sell Online?
New York Times, March 23, 2017
Over the last decade, as luxury retailers large and small grew to accept — then embrace — e-commerce, most Swiss watchmakers struck a tone of defiance, vowing to protect their timepieces from the perils of the internet.
This week, with the Baselworld luxury watch and jewelry fair drawing industry executives and watch fans from around the world, many brands, chastened by declining sales, would have to acknowledge they were wrong. They have joined an ever-growing number of high-end companies now convinced that selling online is crucial to capturing the next generation of buyers.
Jules Boudrand, a Geneva-based director at the consulting firm Deloitte, said, “We did a consumer survey in six different countries, and for people between 18 and 30 years old, social media is clearly becoming the most important marketing channel, and they have a high intention of buying watches online.”
He said that half of the watch executives surveyed as part of the 2016 study said they would emphasize online resellers more than any other sales channel this year, compared with only 19 percent in 2015.
“It’s clearly a move the brands need to make to reach this younger audience,” Mr. Boudrand said.
Luxury houses overall were slow to adopt online selling, sure that the experience of a beautifully appointed boutique and white-glove service were fundamental parts of their allure. And Swiss watch brands, highly traditional businesses steeped in European heritage and selling ultra-exclusive merchandise, were all but destined to hold out even longer.
IWC Schaffhausen, for example, held out until November, when it became the first luxury watch brand selling online at Mr Porter and Net-a-Porter. (IWC’s owner, Compagnie Financière Richemont, is an investor in the Yoox Net-a-Porter Group.)
“At the end of the day, we want to help our clients buy where and when they want,” said Christoph Grainger-Herr, who will become IWC’s chief executive on April 1.
Although more watchmakers are coming around to e-commerce, a number of high-end brands added shopping carts to their websites years ago (albeit with rollouts staggered across markets). Cartier, for example, has been on the internet since 2008, Montblanc since 2011 and Jaeger-LeCoultre since 2012. For the most part, they added e-commerce without fanfare.
Online sales have challenged the watch industry’s traditional distribution network, built on longstanding partnerships with multibrand retailers, and managing that conflict has proved tricky. Some watchmakers, like Panerai, have chosen to sell through their own e-boutiques. Others, like the British brand Bremont, have eschewed direct online sales to sell through their retail partners’ sites. “We’re completely indebted to our retailers, who’ve helped build us as a brand, and we want to try and involve them in some way,” said Nick English, a Bremont founder.
Another reason brands have downplayed their online operations is that it’s taken a long time for them to shake the idea of the web as a discount emporium ruled by illegitimate dealers and counterfeits.
“If you Google ‘Rolex Submariner,’ likely the first five sites you see might not even be Rolex,” said Benjamin Clymer, founder of the influential watch site Hodinkee. “For a long time, it was the gray market dealers without any authorization to sell the watch or any warranty.”