{"id":47047,"date":"2019-05-16T10:08:06","date_gmt":"2019-05-16T09:08:06","guid":{"rendered":"https:\/\/www.watchpro.com\/?p=47047"},"modified":"2019-05-16T10:08:06","modified_gmt":"2019-05-16T09:08:06","slug":"corders-column-expert-retailers-will-always-delight-customers-more-than-faceless-megabrands","status":"publish","type":"post","link":"https:\/\/www.watchpro.com\/corders-column-expert-retailers-will-always-delight-customers-more-than-faceless-megabrands\/","title":{"rendered":"CORDER’S COLUMN: Expert retailers will always delight customers more than faceless megabrands"},"content":{"rendered":"
The perceived wisdom that watch brands can serve customers better than families who have been running retail businesses for generations is wrong. Retail is in the blood of these families. They don\u2019t learn it from management consultants, they learn it at the dining table from the moment they can understand the conversations of their parents. They learn from their friends, they learn from their hairdressers, they learn from other retailers. The lessons are not the same in China and Liverpool, so the Chinese retailers will be brilliant in China and the Liverpool retailers will be brilliant in Liverpool. Hierarchical groups cannot replicate this. They learn from spreadsheets, they are driven by algorithms that might tell them about global averages, but that is not what counts when selling luxury items like watches. WatchPro<\/em> wants everybody to profit from the sale of watches, which is why as editor I will tirelessly campaign for retailers to be listened to. They do not need market distorting support, they just need to be heard, trusted and given the opportunity to compete on a level playing field against other excellent retailers.<\/strong><\/p>\n Despite all the talk of luxury Swiss watch brands increasing their direct to consumer transactions, the industry remains dominated by wholesale through a global network of retailers. Of the 12 largest watch brands, half do not have their own transactional websites in the United States, including the world largest privately owned businesses, Rolex, Patek Philippe and Audemars Piguet. Only five brands do their own ecommerce in Europe and only two are transactional in China.<\/p>\n Chatter among retailers and brand executives for the past decade has been about how far and fast watchmakers will move towards selling directly to consumers through their own brick and mortar boutiques or online through ecommerce. After many years reporting these conversations and initiatives there is little doubt that the direction of travel continues to be for more direct selling from the bottom to the top of the market, but the pace of change has been slower than many predicted, and some brands are having second thoughts about the wisdom of developing retail skills that their brick and mortar partners have taken generations to develop.<\/p>\n A research report published by investment bank Morgan Stanley in March this year predicts that the move to direct to consumer (DTC) will be a game changer and highly beneficial to the main watch brands in the long term. However, the report notes, it will likely be significantly disruptive for brands owned by Swatch Group, Richemont and LVMH because they currently rely on a very large network of third party retailers.<\/p>\n <\/p>\n <\/a><\/p>\n <\/p>\n <\/a><\/p>\n <\/p>\n Morgan Stanley calculates that profit margins will be dramatically improved with DTC sales, particularly through directly owned ecommerce sites. However, it concedes that only 4% of sales values came through ecommerce in 2018. Directly owned boutiques add another 6% to DTC sales for the Swiss luxury watch industry as a whole, which leaves 90% of transactions for the thousands of retail partners around the world.<\/p>\n There is a question mark over who will be best at ecommerce. Will it be the brands themselves? Maybe the largest retail partners such as Signet, Bucherer, Beaverbrooks, Fraser Hart or Watches of Switzerland will come out on top. Or could ecommerce giants like Amazon, Farfetch or Net-A-Porter take the lead.<\/p>\n This is a question with a constantly changing answer, which is why no particularly dominant business model has won out over all others. It also explains why the most established retailers in the UK, the vast majority of them traditional multibrand jewellers, still account for the overwhelming majority of watch sales.<\/p>\n <\/p>\n