Within the next four years, the watch industry will go through a massive shift. This presents a problem as none of the wholesalers, retailers, and after-sales service centers will be ready for this shift in the immediate future. The “issue” in question is relatively simple, however we as retailers must adapt our long- term strategies now, just like the manufacturers are (or at least the ones which who acknowledges this as an issue). Swatch group’s slow retreat of their movements to other companies is a sign of the times which can be seen as a “BIG ISSUE”.
Just like predicting the next “hot seller” in a showcase or that “must have” timepiece (which clients insist on waiting for on yearly intervals), we as an industry must foresee this issue as the next crisis in the watch world.- In other words, this is a smaller scale version of the “quartz revolution” or as most people refer to as the time as when “quartz” movements overpowered and conquered the market in the 1970’s.
The idea of just being aware of this forthcoming crisis is a simple form of pro-activity even though it is really a micro issue to some whom those who just shrug their shoulders or sigh heavily and do not really see anything but a hindsight price increase. However, it is very hard to ignore especially since the writing is on the wall.
Let me give you a scenario. Let’s say that Swatch group implements an immediate ban of distribution on an ETA 2892 (an automatic/date movement). Think about how many people they contract they’re their movement to outside their “umbrella group”. Let’s say we use Baume & Mercier as an example. Baume & Mercier would suffer as some of their family’s families like Hampton and Capeland along with more popular volume luxury price points of mid-$2,000 to mid-$3,000 range would be greatly hurt. Now some of you might may object and say I’m wrong and tell me that Baume & Mercier has the force within their vertically integrated umbrella of the Richemont group to keep them afloat. Incorrect!, even though Baume & Mercier is the sixth oldest brand in watchmaking; it is one of the Richemonts’ lower end or “volume” brands. Even when we are given factual data, i.e.: LGI (Luxury Goods Index), that state that highest growing segment in the watch business is one which does not belong to a sub-unit like Baume, then why should Richemont invest in sustaining movements in their watches. Richemont’s opportunity cost to manufacture these “lower-end movements” would give them a lower return on investment and would cause their cost of goods manufactured to skyrocket (at least in the short to medium term). Albeit, it would be a disregard to Richemont’s philosophy of would be disregarding they’re philosophy of subcontracting and diminishing variable costs would be and in fact be contradictory to their strategy. Why should Richemont Group be subject to build more common movements at a less skilled and profitable segment when such a group has brands such as Jaeger LeCoulte and Vacheron, who innovatively create their own movements at an even higher end segment
The writing is definitely on the wall,wall; anybody whom is even remotely tied to this business knows that there is a shortage of watchmakers in the world. This is both an internal and external problem which plays a huge part in the future of the business. Even though , most “umbrellas” are slowly and meagerly attracting young apprentices while offering to cover the cost of their education as an incentive, can the shortage kill our business in the long run? The answer is not so black and white. However, it is relevant and ties into my initial topic- if there are no watchmakers whom can work on basic and/or above- average movements available in these brands currently whose is to say that a 3 to 4 week after sales turnover will not only be short but a blessing as to what will be waiting for us in the next few years in the future.
Oh yah, not to mention, cost. If you think companies like Rolex know how to brainwash customers on their high “standards” of after- sales, while knowing how to consistently charge, get ready for the overhauls that will cost a nice percentage of what the watches value is on a regular basis, not only just for a Rolex.
In conclusion, if you’re you are the type of person who just collects without thinking about long-term issues, then happy collecting. ! However, if you’re a more “rounded” collector or conscious lover of fine timepieces, then stop and think the next time you think consider adding a nice, different look to your wrist or watch box. There’s more to timekeeping then what’s on your wrist.
Just like predicting the next “hot seller” in a showcase or that “must have” timepiece (which clients insist on waiting for on yearly intervals), we as an industry must foresee this issue as the next crisis in the watch world.- In other words, this is a smaller scale version of the “quartz revolution” or as most people refer to as the time as when “quartz” movements overpowered and conquered the market in the 1970’s.
The idea of just being aware of this forthcoming crisis is a simple form of pro-activity even though it is really a micro issue to some whom those who just shrug their shoulders or sigh heavily and do not really see anything but a hindsight price increase. However, it is very hard to ignore especially since the writing is on the wall.
Let me give you a scenario. Let’s say that Swatch group implements an immediate ban of distribution on an ETA 2892 (an automatic/date movement). Think about how many people they contract they’re their movement to outside their “umbrella group”. Let’s say we use Baume & Mercier as an example. Baume & Mercier would suffer as some of their family’s families like Hampton and Capeland along with more popular volume luxury price points of mid-$2,000 to mid-$3,000 range would be greatly hurt. Now some of you might may object and say I’m wrong and tell me that Baume & Mercier has the force within their vertically integrated umbrella of the Richemont group to keep them afloat. Incorrect!, even though Baume & Mercier is the sixth oldest brand in watchmaking; it is one of the Richemonts’ lower end or “volume” brands. Even when we are given factual data, i.e.: LGI (Luxury Goods Index), that state that highest growing segment in the watch business is one which does not belong to a sub-unit like Baume, then why should Richemont invest in sustaining movements in their watches. Richemont’s opportunity cost to manufacture these “lower-end movements” would give them a lower return on investment and would cause their cost of goods manufactured to skyrocket (at least in the short to medium term). Albeit, it would be a disregard to Richemont’s philosophy of would be disregarding they’re philosophy of subcontracting and diminishing variable costs would be and in fact be contradictory to their strategy. Why should Richemont Group be subject to build more common movements at a less skilled and profitable segment when such a group has brands such as Jaeger LeCoulte and Vacheron, who innovatively create their own movements at an even higher end segment
The writing is definitely on the wall,wall; anybody whom is even remotely tied to this business knows that there is a shortage of watchmakers in the world. This is both an internal and external problem which plays a huge part in the future of the business. Even though , most “umbrellas” are slowly and meagerly attracting young apprentices while offering to cover the cost of their education as an incentive, can the shortage kill our business in the long run? The answer is not so black and white. However, it is relevant and ties into my initial topic- if there are no watchmakers whom can work on basic and/or above- average movements available in these brands currently whose is to say that a 3 to 4 week after sales turnover will not only be short but a blessing as to what will be waiting for us in the next few years in the future.
Oh yah, not to mention, cost. If you think companies like Rolex know how to brainwash customers on their high “standards” of after- sales, while knowing how to consistently charge, get ready for the overhauls that will cost a nice percentage of what the watches value is on a regular basis, not only just for a Rolex.
In conclusion, if you’re you are the type of person who just collects without thinking about long-term issues, then happy collecting. ! However, if you’re a more “rounded” collector or conscious lover of fine timepieces, then stop and think the next time you think consider adding a nice, different look to your wrist or watch box. There’s more to timekeeping then what’s on your wrist.
