WatchPro now has a separate edition covering the watch industry in the United States, and will bring news and views from the other side of the pond that we feel will be of interest to UK readers. This month we visited Hamilton Jewelers, which is run by Hank Siegel (pictured above) one of the most prominent advocates for the American jeweller community.
For 107 years, Hamilton Jewelers has been putting smiles on the faces of customers in Princeton, NJ, and since the 1970s in Palm Beach, and Palm Beach Gardens, FL. The luxury watch and jewelry business may have changed beyond recognition over that time, but the fundamentals of delighting customers remain timeless as WatchPro’s Daniel Malins discovered in conversation with the company’s leadership team: CEO Hank Siegel, director of business strategy and operations Andrew Siegel and vice-president of merchandising Anne Russell.
WatchPro: You are the 3rd generation of the Siegel family that has run Hamilton Jewelers for almost 100 years. How does that responsibility sit with you and your family?
Hank Siegel: Hamilton started in 1912 here in New Jersey. My grandfather purchased the business from the founder in 1927 and it’s been in our family ever since. Back in those days, like most of the independent stores in the United States, it was a mom and pop shop. He unlocked the door in the morning and swept the floors at the front, trimmed the windows and put all the merchandise out and took care of customers and paid deliveries and did the repairs and so forth. He grew the business from there. He was a very astute business person and merchant and very committed to the community.
Mr Henri Stern [who later became president of Patek Philippe] came to the United States for the first time in 1938 and sold my grandfather one watch. I’m happy about that. My grandfather taught my father and me that relationships are the foundation of this industry. I think it’s very much the same today. Today’s luxury consumer can go anywhere — they’re exposed to product from all around the world, stores from all around the world, experiences from all around the world. So what makes the difference? The difference is the trust and the relationship, the experience they get when they come to Hamilton, whether in a store or virtually.
WatchPro: Building trust and relationships is universal, but must have meant different things in practice during your one hundred years’ of history.
Hank Siegel: Today it is contingent upon authority and expertise, the in-store design – both brick and mortar and online — and experience. That’s why we’re investing millions of dollars to remodel our stores and website presently. To a great degree it comes down to the skills of my team. How knowledgeable are they? How much of an expert are they? The consumer is so well equipped with knowledge and we need to be even more expert.
We constantly invest in training and staff development. We have the Hamilton Jewelers University Program, which was started some years ago. It’s a one week long off-site program where we bring newly hired as well as seasoned team members to a program covering everything from our history, our values, our presentation skills, our selling skills, product knowledge and understanding the luxury consumer.
I think that’s a meaningful experience. In fact we track training hours on a person-by-person basis within our organization. Everybody has a knowledge plan, should they desire, and a plan for professional growth and development. We think this makes a difference.
WatchPro: When you look at the history of the Hamilton business do you identify a single moment or period where the big breakthroughs have happened?
Hank Siegel: It’s been pretty steady growth but we have had two fires in our history, where the store burned down and everything was lost, including the archives. There was one in 1957, which allowed us to rebuild as a much larger store. Then we moved to Palm Beach in the 1970s and Princeton in the 1980s – we took over what used to be the Princeton bus depot. That became a signature location for us. We opened in Palm Beach in 1974 and that was a key decision. My grandfather, like so many of his generation, retired in his 70s and got bored in his retirement. He was self-made and very entrepreneurial and decided to open up a store in Palm Beach, where he was a long time winter resident. That proved to be a very wise decision, as we have served generations of local and seasonal clients there for 45 years.
WatchPro: How would you describe the contribution of Patek Philippe and Rolex?
Hank Siegel: They’re very important drivers. They’re amazing brands. They’re trusted by the consumer, so they’re really the kings in terms of the watch brands. And, having had the privilege of visiting their factories, I can enthusiastically say that the quality is incredible.
Those brands want to appeal to the local consumer. At Hamilton, while we have customers from all 50 states and around the world, we really deal with a regional customer base by and large.
Smart leading brands want to understand what’s going on in their important regional markets as well as the major cities because there’s a difference between a store in Princeton New Jersey or Palm Beach Florida versus New York, Las Vegas —or other major tourist areas.
Anne Russell: Those relationships have developed so much more over the past couple of years because they’re listening to our frustrations and we’re responsive to how they want the brands to be represented in our stores and with our clients.
Andrew Siegel: It comes back to what we were talking about earlier in terms of, when someone walks into one of our stores or interacts on social media or comes to our website, we should know them immediately: who they are, what they want. If we don’t know it immediately we should know it pretty soon. That’s part of our value as local retailers in markets and towns where we live, work, play and have history. All of the global brands, not just Rolex and Patek, appreciate that.
They realize that expert retailers understand their markets thoroughly, more so than any brand could. When you combine the global power of the brand and our local knowledge and reputation, it’s really powerful.
Anne Russell: I think there’s also been a real interest from many brands in understanding the US market a lot better over the last couple of years and understanding the nuances of the US market, which are complex.
All brands, regardless of whether it’s Rolex or Patek or others, have taken a mindful look at their distribution in the US market to make sure that the partners that they’re with have proper relationships, professionalism, strategies, succession planning, and innovation – and that we are representing their brands appropriately.
WatchPro: Do you feel that there has been a disconnect between Switzerland and the States?
Anne Russell: After [the financial crash of] 2008 there was a shift within the US market and obviously things got more challenging. We all became better merchants and we all became better partners after that correction. Brands wanted to take a closer look at understanding the US market. Princeton, New Jersey, and Palm Beach Florida is not Miami or Beverly Hills, and those are very different environments to work in. I think they also took a look at understanding what the right levels of production for the US market would be going forward. I think that drove the change more than anything else.
Hank Siegel: With improved data and production, brands look to tailor assortments and availability of product to the local markets a little better. They work more closely with the local retailers to work on the assortments. There are certain things that sell in certain markets and certain things that don’t. It’s not a bad thing — but sometimes something works in a resort area and it might not work in a Mid-Western area or something like that. There is more communication back and forth, which is terrific.
Andrew Siegel: Communication is the key word. I think the realities of the market and what was happening in terms of product and consumer preferences after 2008 required that communication just be better between the retailers and the brands. It forced everyone’s hands.
Hank Siegel: Everybody is evolving and learning how to do business better, and working more closely with key partners to improve turnover, product flow, service, training, and all of the key touchpoints.
As a leading independent specialty store, we have to constantly raise the bar. What happened two or three years ago is irrelevant today. We have to constantly become better and look at how can we tweak this and tweak that, how can we provide a better environment, how can we provide better training and how can we provide a better experience for the staff, and perhaps most importantly, what technology can we deploy to help the business run more efficiently. As an example, we have just rebuilt our after-sales service center, providing a better environment for our seven factory trained watchmakers and polishers, our eight jewelers, designers, and stone setters, as well as our service administration team. It was a year-long project and well worth the investment.
WatchPro: All jewelers speak about personal relationships, but there are now huge opportunities from mastering technology and Big Data when it comes to customer relationship management.
Andrew Siegel: No matter what we do moving forward from a technological standpoint, it has to either benefit the consumer or benefit our team members. We’re hyper-focused on technologies and data that enhance the customer experience and enable our team, and are constantly looking for technology partners who share that vision.
Hank Siegel: One of the things that our company has done well with our client database, which is pretty large given our history, is to be able to segment our clients and track individual customer data. Some years ago we developed our own CRM platform that helps the team identify buying occasions and there’s all sorts of information in there, not only the basic birthday and anniversary type of things but buying patterns and how they came to us and matching the purchase timings to marketing data and so forth.
Anne Russell: Technology and social media have put the consumer in control. What’s the value that we provide? It’s the experience and a highly personalized environment that we create, whether it’s online digitally or whether it’s in our stores. One thing that Hank always says that that is really differentiating for our brand is that he lives, and generations of his family have lived, and operated in the communities in which we run businesses.
I’ve lived here for 12 years and I think that is the organic part of data collection. I know when a friend purchases something, we know when a neighbor purchases something, we know when something doesn’t work because we manage that on a service level. We own each one of those occasions in the communities where we operate. These are our friends and our family and it’s a really nice aspect of our business.
Andrew Siegel: We have the ability now to mix the organic portion, which is being in the communities and understanding our clients, with the data heavy portion. If you sway too heavily on either side it’s not helpful because either you’re in the numbers and you’re not getting a personal aspect, or you’re missing out on information.
In today’s world people have a limited amount of time, they’re in our stores for a reason because they trust us, because they appreciate the products that we have, because they have a great relationship with one of our team members. Whatever it might be, we need to be the best we can be for them. We can do that through data — we can do that knowing our communities and knowing our people.
WatchPro: To what extent have you embraced e-commerce and how seriously do you take the internet more generally?
Hank Siegel: Hamilton’s website has been in place for close to 20 years. It’s constantly evolved and progressed — we’re actually rebuilding the entire site as we speak. We recognize that it is usually a client’s first interaction with our brand so our goal is to create the look and feel and experience on the site that is the same as within the store. It needs to tell our brand story in an effective and engaging way. It needs content that is relevant to those customers and presents our products in a very positive way, the same way they’d see it if they visited one of our stores. We sell everyday online, it’s a very active part of our business, so it’s extremely important.
Anne Russell: Some watch brands have been a little bit behind in terms of embracing the ability of the authorized dealer to sell the product online. There is still a resistance, and so there is a gray market issue. We’ve been behind in our ability to actually transact online with some of these brands but I think that some of them are coming around. It’s an interesting and evolving part of our business that has a huge opportunity for the future.
WatchPro: Why do you think the brands continue to be so resistant to allowing their authorized dealers to sell online?
Hank Siegel: They want to make sure that we represent their brand properly. It is their brand and our website and somehow we have to figure out a way to work more closely together to effectively deliver the information and the product knowledge that they’re seeking to deliver to the end consumer in a way that is representative of the brand but also works for us as their authorized dealer. We love the fact that with some brands, the consumer is invited to learn about the product on our website and then visit the store to try, touch, and compare.
WatchPro: Do you feel it’s inevitable that all brands will come round to ecommerce eventually?
Hank Siegel: It is constantly evolving. We recognize that. Certain brands choose not to be sold online. We completely respect that, I think it’s a good thing. But how do we take that policy and make it a better experience for the customer? You have to recognize that a luxury watch purchase for a typical customer is once every few years if we are lucky — perhaps as often as they buy a car, and most of them are amazed and confused if we sometimes have to tell them they cannot get the watch they want.
I’ve just seen it on our website , on our concierge live chat, and in the stores with comments like ‘why do I have to wait for the next delivery three months from now?’ or ‘How come I can’t buy this online but I can buy it in your store?’ We need to help the consumer to understand.
Andrew Siegel: A lot of what is stopping these brands is the idea that it’s their brand, they want to make sure that it’s being presented properly online through whatever channel that might be. And that’s why we’re continually investing in our website, it’s why we have an in-house digital initiatives team, it’s why we’re changing that site every day and creating the content that positions us as an authority that can be trusted, who can provide the service and the experience that you’re looking for, whether that’s in the store or online. We decided we wanted to position ourselves to be ready for it. As soon as those brands decide that they’re ready, Hamilton’s ready for them.
WatchPro: How frustrating is it that there’s such scarcity from brands like Rolex and Patek Philippe? Doesn’t this force the consumer to look at other options and avenues like the gray market?
Hank Siegel: Scarcity management is a successful strategy for many luxury brands, not only within the watch industry. You can’t walk into your Porsche dealer and buy the Speedster that you want or into Hermes and get the handbag you want — and you may have to get onto a waiting list.
As demand has grown worldwide for certain luxury products, I think the brands recognize that they need to walk a fine line between executing their strategy and alienating clients who are simply looking to celebrate special occasions and have no knowledge that a certain model might be difficult to locate.
A local customer, who is not a ‘watch geek’ or a collector walks into their long time, trusted local retailer and says their son is graduating and they would like to purchase a certain style of timepiece, only to be told it may be a few months before they can get it. Understandably, they say: ‘What do you mean? Graduation’s next week!’ It’s a tough conversation.
But I think brands are working to address the shortages and the production issues and I know they’re working very hard at meeting the ever-growing worldwide demand for certain products. It is a frustrating part of the business today.
It is unlike anything I’ve experienced in my 40-year career and I hope that things will level off and return to normal, whatever normal is. The brands have recognized it is an issue, particularly for the ADs who serve local and regional markets, and are working very hard to address. I’m confident that these issues over time will be addressed, but it’s certainly a challenge for the authorized dealer who serves a regional market and whose business is not tourist based in a major city.
Andrew Siegel: We know they’re working hard in Switzerland, but if demand continues to be what it is. I don’t care if they work 24 hours a day, which I don’t think they will, there is just no way they’ll be able to keep up with the global demand as it is right now. It is also a testament to how fantastic the product is in terms of quality and design, that these pieces are not just being rushed out because of the high demand.
In that regard, we certainly hope that demand doesn’t level off. People are appreciating luxury timepieces more it seems than ever before and appreciating the craftsmanship behind them. I hope that stays. It is certainly inspiring and exciting to see a new generation of client appreciate the amazing craftsmanship that goes into a fine timepiece.
I’m not sure we’ll see things change any time soon because I just don’t know if production can catch up with the demand. That’s for the smart people at the Swiss watch companies to figure out. I think that we’re seeing consumers understanding a little more, now that we’ve had a little while of this world of limited availability based on the demand. People are getting it but the problem is that the people who get it are the watch geeks like us, not the general public looking at luxury watches for the first time.
Hank Siegel: In our local community when that consumer comes in and says I’m looking to buy a graduation gift or a birthday gift and we say it’s not available but I’ll notify you because I’m expecting another delivery in another two months, we lose them to something else potentially. They might choose to buy him a car or take her to Paris for her graduation. We have lost that opportunity. The fine line is that we don’t lose them to other luxury goods or luxury experiences. That’s my concern. I want to be able to take care of my local customers properly. They trust us. I don’t want to lose that sale to a handbag, a trip or a car.
Anne Russell: I’m always happy to see strong demand, regardless of those more challenging conversations. We’re in an instant gratification world right now, particularly for a younger consumer who isn’t a watch customer yet. That requires education and communication and having them understand that they might have to wait a little bit longer but it’s going to be worth it.
Andrew Siegel: Which, to be fair, we are uniquely positioned to do as a local retailer. Part of the reason consumers are understanding it more now is because we spent over a year explaining what is happening; telling them that demand is through the roof and there is a wait, but it is going to be worth the wait because the product is great and they are going to love it when it’s on their wrist.
It is a challenge, especially because we’re not just competing with other jewelers, we’re competing with new kitchens, cars and airlines and hotels for vacations. Those are the types of things that, typically, people can purchase when they’re ready for them. We’re constantly trying to either explain or provide alternatives or to utilize the goodwill that we’ve built up over 107 years to say ‘don’t worry, this is going to be something that’s worth waiting for’.
WatchPro: Some jewelers have said they’re frustrated that bigger chains like Tourneau/Bucherer or Watches of Switzerland come into a market and have stock of Rolex and Patek that they cannot get. Is that your experience?
Hank Siegel: While I recognize that Watches of Switzerland and Bucherer are major players in the world, many brands have built their business in the United States market by working with the best independents in each market
Of course we think about those companies all the time and they’re in our markets and we do compete with them. Outside of those difficult-to-get timepieces I hope they understand the US markets and can service the clients properly. I know we can. We want the rising tide to lift all the boats. Hopefully the fact that these companies have entered the US market will be good for the watch business as a whole in the US.
WatchPro: How vigilant do you have to be as a trusted local jeweler to identify people buying a watch just to flip it for a profit overnight on the secondary market?
Hank Siegel: Our staff are well-trained. We approve everyone individually that those watches go to, normally to clients that we know personally. We appreciate the rarity and the scarcity of these models and we want them to go to friends of Hamilton.
WatchPro: On the subject of the secondary or pre-owned market, is it useful as an indicator of where trends are going and where demand is hottest?
Anne Russell: Because of the scarcity issue for certain watches, the value of watches on the secondary market has soared. Secondary market value is one indicator of demand, and certainly is an indicator for the collectors and enthusiasts. But again, we have many many customers who come to us and make a decision based upon their individual tastes much more so than secondary market values.
Hank Siegel: We have always regularly traded and accepted trades from our clients and purchased from the public. We identified this as a growing trend and we developed a new brand called H1912 four years ago, a separate store front, specializing in just vintage jewelry and timepieces, right here in Princeton.
WatchPro: And that’s gone well?
Anne Russell: Quite well but it’s become a much more competitive space than when we started. It was a business that we were always in but we weren’t really focused on because we were focused on selling new timepieces. There was no point in cannibalising the business in one store so we felt like taking it out and putting some emphasis on it made it more compelling and interesting to a new type of client.
H1912 developed a different client base from the main Hamilton store. There’s some crossover of course and there are people that go back and forth to see what you have in each location. But we’ve really developed and cultivated a new clientele, one that’s a little bit younger and looking for more value.
WatchPro: What do customers get from your H1912 store that they do not get shopping on Ebay or Chrono24?
Anne Russell: Service. Authenticity. Trust. We service each piece. Our authorized watchmakers look at each piece and make sure that every component is genuine, service the timepiece and then we sell it with a warranty. That’s one of the great benefits, we sell it with a two or three year warranty, depending on what the watch is. That was one of our big selling points at the beginning four years ago. H1912 is owned by Hamilton, the watch has been serviced by our certified watchmakers.
Hank Siegel: You do have to be vigilant and expert. The other day somebody brought in a Rolex Sea-Dweller or Deepsea to sell to us. It had what looked like a legitimate warranty card, but our technical team evaluated it and there were just a few little things that were off about it. It was a very good fake. The fakes are better than ever. I would have been fooled if it weren’t for our technical staff.
WatchPro: What do you expect to see as being the next major changes in the watch industry?
Hank Siegel: A lot of the philosophies that we’ve had throughout our history are still relevant today. I remember when I first came into the business I wrote a business plan to grow Hamilton to 25 stores and open all sorts of markets, and we always get invitations and requests to consider opening in new markets.
My grandfather said I could certainly do that if I wanted, but should think about what the ROI would be going into a new market versus reinvesting that capital in your existing markets to grow your business and market more effectively. That has proven to be a good philosophy to abide by.
In today’s world the luxury consumer wants the more personalized experience with a niche business like Hamilton, a niche operator rather than a 100-store chain. So we feel like we can continue to grow our business very effectively and very well with our existing markets. That’s not to say we wouldn’t explore other opportunities — we will and we do.
In terms of what’s next for the watch industry, I think we will see more and more editing. As an independent retailer I think we will need to keep editing our brands and not try to be too broad. We need to be focused, authoritative, be known as an expert and a trusted resource.
It is constantly evolving and changing. If you are a retailer who is not thinking about your next investment in your digital strategy, or your next investment in your store experience, or your next investment in your service capabilities, you’re missing the boat. It used to be that you could renovate your store every 20 years and still look fresh. Now it’s every five years.
Andrew Siegel: We talk a lot at Hamilton about function versus purpose. Our functions may be to sell a watch this day, or to get the appraisal out to the client in the mail or to run a report for Anne, or whatever it may be. But the purpose is much larger than that. It is to create lasting relationships that mean something; it is to really about creating smiles.
We’re in a nice business, people should leave smiling. They should enjoy our Instagram or check out at HamiltonJewelers.com or leave our store with a smile on their face, no matter what. The way we do that can change with the times, as preferences and technology changes, as long as we’re investing and ready for it. That’s the most important thing moving forward I think.