Would you buy a Rolex online? The global pandemic has accelerated a reliance on e-commerce and with it, the notoriously conservative luxury watch market, with significant steps towards adoption of e-commerce as an additional retail channel.
As traditional and new retailers embrace this change how will this effect luxury watches for the consumer?
One challenge: Price erosion
Published pricing is nothing new. Although I think we will see stricter advertised pricing policies to prevent online price wars and therefore price erosion. And this will translate into less negotiating power for the consumer at the retailer level – whether online or in physical stores.
I think the upside is that more consumers, savvy watch enthusiasts or first time buyers, will be paying the same or very similar prices for timepieces.
Rolex Submariner Date
The downside is that online sales demand traffic. That means watch buyers flocking to watch review and media operations specializing in the luxury watch market as well as used and vintage retailers, already using e-commerce as a selling tool. They are there to provide unbiased reviews and opinion.
Both situations have occurred in the last few years, with large review/media sites becoming retailers for big brands and/or being purchased by big brands. Here is where I think the possibility of conflict of interest begins to emerge, and doesn’t potentially serve the luxury watch buying public.
The luxury watch world may have just been lucky up to this point by not having this element at play.
The challenges of buying a luxury watch online
The most apparent challenge faces physical retailers who draw their customer base from a specific geographical area. With e-commerce drastically reduce the importance of geographical location? What will their strategy be to remain relevant?
Manufactures without doubt will control pricing and sales within either countries or regions. That’s to prevent areas of the world with lower retail pricing to claim price shopping customers of the world. But how does a physical retailer present value?
Rolex Cosmograph Daytona
The first would be a forum for actually seeing a timepiece in physical form – any watch enthusiast will tell you that the “in the metal” experience is crucial.
However, my fear is that will we see fewer pieces in stores with stock now split between traditional retailers and online retailers? How many traditional retailers will simply add online sales to their offering, only to be disappointed with the results as they lack the experience to be truly successful in online retailing?
In-person advice from a sales professional
The second is the role of the sales professional who can guide, assist, and be part of the buying experience. And that includes the fun and excitement of the “experience” of buying the timepiece.
This is luxury we are talking about here. The luxury experience is not just about what you buy, but also about how the buying is done and the experience involved. But what happens when the experience is delivered by the retailer? They assist the customer through the process, only for the customer to search online for the lowest price?
Is the rise of the corporate boutique a way for the brands to promote without having the burden of direct profit from a physical location? And again where does this leave the independent retailer in the long term?
Rolex Oyster Perpetual
The advantages of buying a luxury watch online
With the challenges facing the traditional retailer, there is an opportunity to become more accessible and provide a better experience for customers.
Retailers, usually granted an exclusive territory for one or more brands, have had the luxury (lol) of taking the attitude of “buy it here” or “drive 2 hours to the next nearest dealer, it’s up to you”. I can’t help but feel a slight sense of entitlement on the part of the retailers from time to time.
I have bought watches repeatedly from retailers and sales people who treated me like a person. They remembered my name, reached out to me about promotions and events. And they were happy to see me when I visited the store. When was the last time your local watch retailer did that for you?
Will the rise in e-commerce make the in-store folks up their game?
I hope that e-commerce pressures will raise the level of in-store customer service. Perhaps they will provide a more dynamic environment not only for the customer but also for the sales professionals. I have many times walked into a luxury retailer, looked at the faces of the employees and wondered whether they wanted to be there at all. Is this an opportunity for good brick and mortar retailers to become great and poor ones to go out of business?
Rolex Oyster Perpetual Day-Date
I can’t help but think that legitimizing e-commerce in the luxury watch market lessens the requirement of physical retail locations as a hallmark of watch brand legitimacy. Will this provide a window of opportunity for smaller and micro brands who don’t have widespread distribution or volumes sufficient enough to support a retail network?
Does rise in e-commerce mean more room for more luxury watch brands?
E-commerce itself has also made it possible to source components for small brands from all over the world. You can partner with anyone, anywhere, and produce smaller quantities with excellent quality with modern manufacturing techniques.
Has this shift inadvertently levelled the playing field for clever and resourceful brands willing to take a chance on the world stage? The acceptance of e-commerce in other retail sectors has done just that. Will we see the emergence and rise of many more brands in the coming years? And how will these new players help define and shape the luxury landscape?
TOP IMAGE: SHUTTERSTOCK; PRODUCT IMAGES: ROLEX