BA111OD is a Swiss brand that started in 2019 as an experiment in how an alternative distribution model can fundamentally change the way watches are made, marketed and sold.
The business ostensibly sells directly to consumers online, but rewards customers who recommend BA111OD’s watches to friends.
This has led to powerful word of mouth marketing and sales for very little cost, a community-led tactic BA111OD calls we-commerce.
Cutting out wholesaler and retailer margins while keeping marketing costs so low means higher operating profits for the company, which have been largely passed on to customers in the form of sophisticated watches that sell for considerably less than comparable pieces from more traditional players.
BA111OD’s first chronograph, the Chapter 5.1 Chrono Magma housing a Valjoux movement, launched in September with a price of CHF 1,110.
Even more eye-catching was the Chapter 4 Veblen Dilemma Tourbillon, launched last year for under CHF 5,000.
Now BA111OD’s founder Thomas Baillod is evolving his channel strategy with a plan to appoint a single retail partner with national coverage as a partner in the UK and other countries.
This being BA111OD, the distribution plan has a twist. Not only is the brand looking for a single exclusive retail partner for the country, that retailer is not required to carry any stock or even make any sales.
Instead, the retailer would provide a quality experience to customers once a watch had been bought online from the BA111OD ecommerce site.
In return for providing that service, the retailer could be paid a fee of up to 30% of the watch’s sale price when it is collected in store.
Mr Baillod named Goldsmiths, Beaverbrooks, Chisholm Hunter, Ernest Jones and Fraser Hart — prestige retailers with nationwide store networks — as the type of partner he wants to sign with.
“To work for all parties, this has to be a single, multi-store partner in each country,” Mr Baillod tells WATCHPRO.
“They would be taking no risk because they would not be required to invest in any stock, but for every watch sold in the UK, our exclusive retail partner would get a cut,” he continues.
The retail partner would be encouraged to take stock on consignment and could sell online or in stores. “We would certainly love to see our watches in store windows,” Mr Baillod suggests.
Working with an established premium jeweller in the UK would also help overcome a challenge faced by BA111OD, which is that customers find it hard to believe they can buy complex and highly finished Swiss-made watches at such low prices.
“Mistrust is a big issue. We overcome this with word of mouth recommendations from customers, but the right retail partner would help,” Mr Baillod says.
BA111OD celebrated its third anniversary this year, and has reported that sales reached CHF 2.5 million for the first nine months of 2022.
Mr Baillod says the company has sold move than 5,000 watches in its first three years including 500 tourbillon pieces.
However, its business remains hugely concentrated in French speaking parts of Switzerland, where its community accounts for 80% of global sales.
The power of word of mouth marketing is most clearly demonstrated in Taiwan, which has become BA111OD’s second largest market thanks to the owner of a major Porsche owners’ club becoming a fan and recommending the watches to members and other friends.