Swiss watchmakers have long resisted the siren call of ecommerce. While many of their products sold online – you can find everything from Swatch to Breguet on the “grey market” – there were no official online channels for many brands. Until now.
Omega, a Swiss watchmaker whose wares now grace the wrist of James Bond, just started selling online, joining Panerai and others in a move that signals a major change in the way expensive watches are bought.
Historically, watch companies sold through authorized dealers. These were medium to large jewelry shops that had to show a certain level of traffic and earning potential. These ADs had to take whatever was given – boxes of unwanted straps, older watches, etc. – in order to get the latest models. Smaller shops could even lose privileges if they didn’t sell enough, reducing their draw among the watch cognoscenti. Further, these dealers also took advantage of keystone pricing – essentially doubling the wholesale price – a deal that gave jewelry salespeople and the shop quite a chunk of profit.
The AD network is clearly fading. Whereas once watchmakers advertised the number of “doors” they sold out of the move to ecommerce shows that keystone is no longer in fashion and selling out of a jewelry shop, even one with a dedicated watchmaker on staff, is unappealing to the new consumer. While watch lovers have been buying and selling online for a decade, watch newbies almost always used to go into the shop to get a more hands-on introduction to the hobby. This is no longer the case.
Further, ecommerce means that Omega gets to keep most of its profit. You’re not going to get a special deal if you buy online and Swiss watchmakers rarely discount so, while it may be in your interest to pick up an Omega at a duty free, if you’re in a hurry you’re best served just checking out online. After all, when you’re planning on spending $12,000 on a arguably beautiful Speedmaster you don’t want to have to haggle with a jeweler in an ill-fitting suit.
Things are changing rapidly in the Swiss watch game and this move by Omega is just one more step towards a new – and potentially disruptive – future for an industry that survived two World Wars and the onslaught of quartz technology. Whether or not it weathers this storm is anyones guess, but now it may have a fighting chance.