It’s been just over a year since eBay launched its Authenticity Guarantee programme in the UK, and it has proven to be a big hit for the online giant and, more importantly, the thousands of individuals and businesses buying and selling luxury items including watches on its platform.
Offering detailed inspection and verification by independent experts, the Authenticity Guarantee is designed to provide a vital extra layer of confidence for shoppers buying watches on the site.
This increased buyer confidence helps boost sales conversion for those individuals and companies that choose to list watches on the eBay platform, plus the process protects these sellers with verified returns if a customer asks for their money back.
eBay’s Authenticity Guarantee was introduced first in the United States in 2020, and is transforming the relationship watch enthusiasts have with the secondary market.
“Authentication is vital in the second hand market,” suggests Tirath Kamdar, Global GM of Luxury at eBay. “Without it, there can be a lot of apprehension when shopping in high-passion and high-value categories like watches. With our 27-year history as one of the world’s largest online marketplaces, eBay has seen first-hand how authentication builds trust for both buyers and sellers – and the impact has been incredible,” he says.
Over the past two years, eBay has authenticated more than two million items across collectible categories. This has driven up sales of watches priced at over $2,000 — the threshold in America over which every watch goes through the authentication process —by strong double-digits in both the US and UK. The threshold in the UK for watches to automatically feed into the Authenticity Guarantee process is a price of £1,500.
“Importantly, eBay’s Authenticity Guarantee has also dramatically improved the customer experience,” Mr Kamdar says.
“By creating a more trusted and seamless shopping experience, we’ve moved our customer satisfaction scores (or CSAT) remarkably – with happy customers spending more AND coming back more often. In categories where we have improved the experience, our growth rate is outpacing the rest of the platform by 15 points – and this is significant,” he reveals.
The UK launched its Authenticity Guarantee in September 2021, and is already reporting similar benefits for buyers and sellers and a commensurate uptick in business. “Year one of Authenticity Guarantee on eBay.co.uk has been very successful, surpassing our own expectations,” says Keith Metcalfe, UK Head of Luxury for eBay. “The programme has driven traffic and conversion through 2022, resulting in higher luxury watch sales than we’ve ever seen before and seller and listing numbers consistently stepping up every single week this year.”
After such a successful launch year, Mr Metcalfe and his team in the UK have no plans to slow down, citing eBay in the USA as a blueprint for what the next steps may be.
“eBay US are the trailblazers behind our Authenticity Guarantee programme and we aim to bring everything that works over there to our UK customers,” Mr Metcalfe says.
“For example, eBay US has recently launched an optional Authenticity Guarantee service, for watches sold for less than $2000 (requiring an $80 fee for the buyer) as well as, very excitingly, partnering with the GIA on Authenticity Guarantee for jewellery.”
But it’s the here and now that’s most important to eBay’s legion of customers, and they are being influenced in their buying, and selling, decisions by turmoil in the pre-owned sector.
How are buyers and sellers reacting to the sensational price rises and, more recently, cooling in the pre-owned luxury watch market? “It’s undeniable that 2022 has been a volatile year for markets and trends in the wider secondary watch market have been a reflection of multiple macro factors,” Mr Metcalfe explains.
VOLATILE TRADING
The volatility being described can be traced back to the middle of 2021, when prices for watches already selling for well over retail prices began a steep rise that accelerated in the first quarter of this year.
It is important to note that this spike was driven by a relatively small percentage of all watches trading on platforms like eBay, but they distorted the overall market because they were those most highly traded, and saw the steepest price rises.
Watches that were discontinued — or there were rumours that they were going to be discontinued — shot up fastest and furthest. The Audemars Piguet’s Royal Oak ‘Jumbo’, Patek Philippe’s blue dialled Nautilus 5711 and some of Rolex’s colourful Oyster Perpetuals were trading for eye-watering prices up to the end of Q1, then fell in price even more quickly than they rose up to the peak.
In the summer, WATCHPRO used the metaphor of a cappuccino to describe what was going on.
The crazy rise and fall of prices for a small number of references, mainly those being discontinued, was a part of the market of no greater volume than chocolate sprinkles on top of a frothy coffee.
The froth, as in a cappuccino, is an airy and insubstantial part of the market, likely to deflate, and this is the segment where watches normally trading on the secondary market slightly above the price at authorised dealers are found. Rolex Submariners and surviving Oyster Perpetuals are a good example, but almost any watch with the Rolex crown was being sucked in, including ladies watches. These watches were caught up in the hype, but are much easier to find, so less volatile.
By far the largest part of the luxury watch market is like the actual coffee. This is where watches that are readily available at authorised dealers are found. Often supply exceeds demand, so they find their way, mysteriously, onto the grey market at discounts.
There was a brief period of a few weeks in April when the market froze while dealers, particularly those that trade between themselves, took fright. It was better for them to keep advertising watches at peak prices, even if there were no buyers, than to “lock in” lower profits or losses by accepting that the market hard turned.
Since then, sanity has made a welcome return. Prices are more reasonable. Panic buying and selling is in retreat, and the entire market is benefiting from a new normal. This autumn it is looking like the secondary market is finding a floor, and there are some who suggest there are bargains to be had. “It’s no secret that watch prices are stabilising and people are buying; now is the time to make an offer,” Mr Metcalfe suggests.
Without the frenzy, customers have more time to make considered purchases, and authenticity has to be part of that buying decision. “It’s become more important than ever for our customers to protect their investments and the introduction of Authenticity Guarantee has provided the security needed to trade in an uncertain environment,” he urges.
eBay is also set up to help buyers pay the true market value for watches. They have the options of taking part in an online auction for watches, making and immediate purchase with the buy it now button, or making an offer that the seller can accept or reject.
“Of the 10,000+ watches listed on eBay.co.uk with Authenticity Guaranteed, nearly 7,000 are set up with the ‘Make offer’ button, giving you the opportunity to purchase your desired item for less,” he Mr Metcalf advises.
RECYCLE & REUSE
This flexibility, and the reassurance of the Authenticity Guarantee, is increasing the number of listings for luxury watches on eBay in the UK. “Watch sellers have been moving to eBay UK in droves, with the number of watch listings and watch sellers consistently stepping up every single week this year,” Mr Metcalfe reveals.
Although eBay has been a pioneer in the recycle and reuse circular economy for decades, there has been a marked shift in consumer behaviour in recent years as millennial, and younger, customers embrace buying and selling second hand items as an important contribution to sustainability for the planet.
Fast fashion is out of fashion, and pre-owned clothing and accessories are creeping into high street stores, not just charity shops.
More durable luxury goods, like handbags, jewellery and watches, are benefiting from this wider trend, and eBay is at the vanguard of the movement.
“eBay has always been a barometer for what is new and now, and shoppers have for years flocked to the platform for its unique and vast selection of inventory from top luxury brands. That hasn’t changed in the past 10 years, but the way people shop and what they see as important in their shopping experience, has,” Mr Kamdar believes.
And, with luxury goods holding or increasing their value, it is more important than ever to consumers that what is described online is what they are going to get. This is pushing sellers to do better. “Authentication has become table stakes for any retailer or marketplace competing in the resale space, and a must-have from consumers. That expectation is driving innovation across the resale space, with other eBay innovations – like NFC-enabled cards and 3D true view – previewing what is to come,” says Mr Kamdar.
“Additionally, as shoppers continue to view luxury items as alternative investments, we believe that authentication and transparency will continue as both an expectation and a necessity.”
In June, as part of its future-thinking strategy, eBay US opened its vault – a 31,000 square foot, 24/7 secure, temperature-controlled storage facility and digital marketplace for collectors to manage their portfolios.
“With peace of mind that their valuables are secure, this intersection of physical and digital is the future for collectors, and a proof-point to how they are thinking about things they are passionate about from an asset standpoint. By 2023, the eBay vault will expand to include additional collectibles categories and luxury goods, like watches,” Mr Kamdar reveals.
Along with consumers increasing desire for sustainability in the goods they buy, there is also a trend for people becoming collectors. They might start in their childhood with Pokemon cards — cleverly marketed with the tag line “you gotta catch them all”, move into trainers (or sneakers, as Americans have it), and find an interest in watches. The entry point to watches may be relatively inexpensive special edition pieces from the likes of Seiko and G-SHOCK or, spectacularly this year, MoonSwatch.
“Like trainers, handbags and trading cards, limited editions and exclusive collaborations among watch brands inspire a unique feeling of collectability for shoppers — edging the category further into resale. Recent events, like the launch of the popular MoonSwatch collaboration by Omega and Swatch, just confirms that watch collectability is similar to other high-passion collectibles,” Mr Kamdar suggests.
eBay analysis shows that, in the three days leading up to the launch of the MoonSwatch, searches for the collaboration watch soared 2410%. Similarly in trainers, after nearly two years of rumours leading up to the March 2022 release, searches for Drake’s NOCTA x Nike Hot Step Air Terra surged on eBay by over 7500% from February to March.
Perhaps the most important development in the buying and selling of pre-owned is the convergence between the world of brand new and used goods. This will be brought sharply into focus by a new show in Geneva in November called ReLuxury, which brings together major dealers of pre-owned luxury watches, such as WatchBox, with primary watch brands that have well-evolved secondary market strategies. Richard Mille will be there showing of its certified pre-owned watches, and Zenith is making an appearance to promote its Icon range of in-house-restored vintage pieces.
EBay is a founding partner of the show, and WATCHPRO is a media partner.
WATCHPRO PARTNERSHIP
Further evidence that eBay is part of the same new and pre-owned ecosystem will be seen in the UK this autumn. The company is the headline sponsor of the 2022 WATCHPRO Awards, which has had a category for Pre-Owned Luxury Watch Retailer for many years.
eBay is also participating in WATCHRPO Salon, the biggest luxury watch show in the UK.
“Our decision to attend and sponsor the WATCHPRO Awards and take part in WATCHPRO Salon this year represents our renewed focus on the watches category, part of a wider global strategy to double down on categories that are the core of our business,” Mr Metcalfe says.
“Year one of Authenticity Guarantee on eBay.co.uk has been very successful, surpassing our own expectations. The programme has driven traffic and conversion through 2022, resulting in higher luxury watch sales than we’ve ever seen before. Watch this space for more expansions in 2023,” he teases.
