Ever since the end of the first wave of lock downs, the luxury watch industry in the west has been flying along with the benefit of ever-strengthening tailwinds.
First, there was the total lack of things to do for the wealthy; no more meals out or lavish holidays.
Almost out of frustration, they spent money on hard luxuries like watches.
That came off the back of a surge in interest for watches from people isolated indoors with little to do except work, browse and shop online.
When shops re-opened, there was a massive surge in spending, layered on top of the strongest online sales the watch industry had ever experienced.
This did not happen by accident. Retailers put all of their experience, generations of customer relationship building and new technology solutions for operations and marketing to work, with spectacular results.
Interest was fueled by get-rich-quick stories spreading like wildfire on social media, which put rocket boosters under already red-hot demand for the most tradeable watches from Rolex.
This created ever-longer waiting lists and an upward spiral in prices on the secondary market as flippers traded, ostensibly among themselves.
Demand spread from bankers like the Daytona, Batman, Nautilus and Royal Oak to less popular watches in the Rolex, Patek Philippe and Audemars Piguet catalogues.
Three things were happening at once:
First, long-standing watch lovers spent more of their disposable income on their hobby.
Secondly, a new generation of watch enthusiasts caught the bug and splashed out on their first or second significant timepiece.
Thirdly, speculators were rushing into the market, buying up watches at retail prices that could be flipped for an instant profit.
All of these tailwinds carried the market to ever-greater heights until the summer of 2022, but then they began to reverse.
Pent-up demand had been satiated. All those long-lost holidays and nights-out were back on the agenda and soaked up cash.
Supply was catching up with demand (and most likely exceeding it, as you will hear in my upcoming forecasts for 2023).
Domestic demand was strong, but not inexhaustible, and tourism was still well below pre-pandemic levels.
Retailers even had a second round of price rises in 2022 to contend with in the UK and euro zone as the soaring dollar created a significant price differential on either side of the Atlantic.
Prices on the secondary market, which began to fall in March, continued their downward trajectory all the way through the third quarter and into the fourth, so the flippers’ business model was crushed.
Even seasoned collectors were adjusting their spending. You saw this in the autumn auction results with prices for all-but the most rare and precious watches dipping.
All these trends found their way into WATCHPRO’s reporting, and this business insight proved popular when it came to the most read stories.
Top 10 stories on WATCHPRO from July to September
Read 304,470 times in Q3.
Read 284,874 times in Q3.
Hitler’s gold watch appears at auction with estimate of $2-4 million
Read 144,677 in Q3.
Christopher Ward trims height from latest professional dive watches
Read 84,229 times in Q3.
Rising supply causes Patek Philippe Nautilus and Rolex Daytona prices to slide
Read 74,197 times in Q3.
Read 69,716 times in Q3.
Rolex and Patek Philippe watches are better than money in the bank
Read 65,082 times in Q3.
Read 56,456 times in Q3.
Read 50,679 times in Q3.
Modern Seiko Speedtimer highlights pioneering launch of its own 1969 automatic chronograph
Read 50,594 times in Q3.
