The power matrix in the watch industry is a simple one. For the most part, the brands have the power and the retailers’ hands are tied. Or are they?
The opening news story of the April issue of WatchPro explores the concept of a softening middle watch market. Watches priced between €500 and €5,000 – the playing ground for many bJust rands that retailers have told us have been fairly dictatorial in terms of late – are slowing in growth compared with the extremes of the pricing spectrum.
Should watch retailers react to this market data and put greater emphasis on an offer increasingly split between the two opposite extremes of the pricing range, it could mean a bun fight erupting for reduced sales volumes in the mid ranges.
The other consequence of this scenario playing out is that the market pitching watches priced below €500 could become increasingly competitive, with more brands trying to snap up market share in this arena, and so window space in jewellers’ shops.
At the top end of the scale, while high-end jewellers might benefit from increased sales of watches priced at €5,000 or more, it is unlikely to change the structure of the business as brands operating at that level tend to have preferred retail channels that are unlikely to change.
But either way, the softening of the middle market and increase in competition between the brands for market share at the juicy price points would only be good news for jewellers as it would certainly mean a power shift in their favour.
Of course the debate is just how soft the middle market really is, but if it is weakening there could be interesting times ahead.
This column was taken from the April 2012 issue of WatchPro magazine. To read a digital version of this issue online click here.
