Is the Watch Industry on the Cusp of a Physical Retail Renaissance? Part 2

For years, the watch industry has been resistant to selling online. But now, luxury watch brands and, most importantly, the larger groups are not only racing to embrace digital clientele but are also trying to gain more control over the final sale. As a result, traditional retailers are facing even more pressure in the age of “Millennialization” and have to quickly come up with new ideas to attract customers who are looking more and more for experiences rather than transactions — new ideas that, if done right, could very well lead to a renaissance of offline retail.

It’s Not Just a Transaction

The average American now spends almost 24 hours a week online, according to data from USC Annenberg published in January 2018. Which means that, even with digital undoubtedly representing one of the most realistic opportunities for growth, the watch industry will still need offline retail for the remaining 144 hours of the week. Consumers are not always online, and they will also appreciate an independent partner. In addition, complicated mechanical watches will always have to be explained, to a certain degree, in person, and not every watch brand can (or wants to) sell watches directly to the consumer. This opens up possibilities for a new generation of retailers who no longer see their role reduced to the transaction of goods and services alone.

Too often, business-as-usual looks like this: a customer is entering a store and asking to see and potentially buy a specific watch model from a well-known brand. Sometimes, this customer is immediately turned away because that very watch happens to be in high demand, only to be seen never again. If not, the customer has to deal with sales staff that is forced to sell a product as fast as possible, creating an environment that can hardly be described “luxurious.” (You wouldn’t believe how many times I’ve been greeted with an “If interested, I should be able to make you a good price!”) Or the sales staff lacks or doesn’t share the same passion for the product, leading to a situation where two very different parties try to find a reason to talk about something that hopefully ends in one of them spending a lot of money – based on information that might not even be accurate and leading to false expectations. All of that could be avoided.

The SevenFriday pop-up store in Zurich sells watches, accessories and drinks – and occasionally doubles as a venue for concerts.

There are, however, some (real) problems that are almost impossible to solve. How, for example, can a store still be approachable if it has to hire an intimidating security guard who stands next to the door? And how can a store owner create a luxurious environment without customers feeling the need to dress up in their best in order to not be judged? And how can a store have a wide selection of new watches without risking the operation’s liquidity?

In other words, for a customer, there is a real chance today that an offline retail experience comes with fewer benefits (and more stress) than buying online. And if it comes down to having to select and pay for the product, clients usually go with the least expensive option.

A similar phenomenon has already led to the demise of the DVD. As a product, it was significantly more expensive to buy offline, customers potentially had to leave the house to get it immediately, and it took forever until the movie finally started, once it was in the player. In comparison, downloading or streaming a movie offered everything people had always wanted in a DVD: a more affordable movie experience that immediately started after buying it. Luxury watch seller Danny Govberg, CEO of Govberg Jewelers and co-founder of the pre-owned e-commerce platform WatchBox knows that, too. “The number-one luxury today is time. Nobody has it. So you have to put the savings of time into the business model, because a lot of wealthy consumers and a lot of consumers in general want to save time.”

Govberg’s WatchBox trading floor in Philadelphia.

Even worse news for the traditional shop owner, successful e-commerce operations like Govberg’s Watchbox are already offering superior white glove customer experiences. Because they already know what a client has and has been looking for all the time, they will certainly make sure to get in touch once they have located the watch on top of your list, and might even be happy to take another one off a client’s hands. Other providers might offer to digitally store a copy of the warranty card, or keep pictures of the watch for insurance reasons, guarantee delivery in one or two hours, or simply send a confirmation email with pictures showing that the purchased watch is currently being built or shipped to its next owner.

Four Rules for Retail

To compete with this, traditional retail needs to create and provide added value, which can be summarized as four needs from the perspective of a customer.

  1. Selection: Help me find the right product.
    Have the sales staff ask me what I am looking for, what I already have, and why I am interested in this specific watch. If you don’t have that particular watch in the store, show me alternatives or convince me that you will do everything to get it for me. Understand that I might need more time to decide, but please don’t take my number and never call back, and more importantly, don’t tell me that there is literally no way for me to get this specific watch. I am sure there are many ways to let me know how popular that model is and that you understand my choice. And don’t try to sell me an ultra-thin watch when I have just told you that I consider myself a clumsy fellow, but do let me see the watch I am interested in in natural light or on someone else’s wrist instead.
  2. Confirmation: Let me know that I made the right choice.
    There’s a chance no one outside your store will ever fully understand why I bought this watch, or how much I actually spent on it. You may be the only person knowledgeable enough to provide all the information I need to explain the brand, the watch, and its functions to someone close to me. So please don’t tell me that this watch will be more valuable the moment I step out of your store, because “it was produced only 9,000 times.” Don’t tell me that “a diving bezel will help me know how much air I have left in my tank,” and that “Only astronauts can get this watch.” I might actually tell the same story to someone and get laughed at.
  3. Experience: Create a memorable shop visit.
    Not every customer needs a glass of champagne, or the most expensive giveaway, but you might want to ask one of your watchmakers to briefly step out to talk about why a column wheel chronograph is so much better. Have the store owner sign the manual for me. Maybe take a picture of me, even if it is just to send me a card with a print of it after. You could also send me an email two weeks later and ask about my last purchase, or offer to clean my new watch while I am in town the next time. You could even tell me not to buy this watch if you think there’s a better option. More importantly, I don’t expect you to know everything about all the watches you have in stock, but I hope you will know where to search for an answer, which means we could spend half an hour trying to ask someone from Blancpain in Le Brassus if the caseback of the Bathyscaphe ceramic is made of the same material or of metal, and have an amazing experience at the same time. Or you could just let me wind down first and let me spend as much time with a watch as I need. Buying a watch should be fun – the whole experience should make me feel fantastic! Offer to have the box delivered to my address so that I don’t have to carry a bag for the rest of the day, and while you are writing down my address, let me know that it’s about so much more than just about asking for an invoice address.
  4. Relationship: Convince me to also buy my next watch at your store.
    It really isn’t about just selling me a single watch. Try to act like my partner (because clients really do try to “buy the seller” when shopping offline). Yes, you have to work with the brands, too, but if I happen to have a problem with a watch that you sold me, I expect you to be on my side, or at least show sympathy and try to solve the problem for me. Also, I don’t mind hearing from you occasionally. You could remind me to get my watch tested before summer, and tell me more about the watch industry. And please give me a call when that watch I asked for nine years ago has finally arrived.

In other words, traditional retail appears to have forgotten about its biggest advantage over e-commerce: customer experience. Its USP is not only deeply rooted in its past, it’s the very essence of a successful retail business. But as long as watch stores continue to mainly think in transactions and simply sell a watch someone asked for, e-commerce, as a less expensive (and more convenient) alternative, will most certainly continue to win the battle. Because at the very least, an online store knows how to write my name correctly in an automated, thank-you email.

Switzerland’s oldest watch shop was founded in 1760. Today, the family-owned Chronometrie Beyer carries 13 brands and also offers a wide selection of vintage watches. Beyer also operates the first (and to-date only) retailer-managed Patek Philippe Boutique in Switzerland and has one of the most important horological collections in the world on display.

Someone who has almost 260 years of experience in retail is René Beyer. He represents the eighth generation of the Beyer family and owns Switzerland’s oldest watch shop in Switzerland, Beyer Watches & Jewelry, situated on Zurich’s prestigious Bahnhofstrasse. His family has always believed in added value. “Customers and guests of our house really are at the center of everything, and all of our departments work closely together to provide the highest service level possible. We are dedicated to offering a lot more to our customers, starting with handcrafted jewels and access to some of the very best vintage watches and antique jewelry. To provide that unforgettable shopping experience in the heart of Zurich, guests can even enjoy our world-renowned watch museum, housing one of the most important horological collections in the world. In short, it is exceptional service, master craftsmen and women, and vast experience that set us apart in the long run. Ultimately, these values have been leading to exceptionally high customer loyalty and continue to add remarkable value to our company.”

New Formats Pop Up

Another advantage of retail is its ability to reinvent and come up with new physical ideas. Watch brand SevenFriday, for example, has recently been exploring different concepts of collaborations for its pop-up stores in Jakarta, Hong Kong, Zurich, and Singapore. In Zurich, it turned out to be a mix between a bar, lifestyle shop, and venue for concerts. In March 2018, Oris opened a pop-up store on Mayfair’s fashionable South Molton Street, representing the brand’s temporary “new stand-alone concept” in London. Even more temporary was the “vintage Airstream trailer pop-up experience,” which hit the road in early August 2018. “The Airstream allows us to have a unique presence at a variety of different lifestyle and community-based events consistent with our brand values,” VJ Geronimo, CEO North America for Oris, said. He hopes that the trailer will become a new touchpoint for customers to step into the Oris brand and its watchmaking heritage. Among the highlights were a bar and seating area and an “open concept watch display that allows consumers to easily try on different watches at their leisure.”

The Oris “vintage Airstream trailer pop-up experience” brings the brand’s watch collections (and a bar) to various lifestyle and community-based events in the United States.

In other words, the brand managed to get face-to-face with new target audiences, created an unexpected experience, and has avoided high rental costs in pedestrian areas simply by going with a less expensive option – which basically is the same approach of an e-commerce website.

It also seems history is coming full circle: On Aug. 15, 1925, Swiss entrepreneur Gottlieb Duttweiler bought five Ford Model T trucks with approximately $100,000, enabling him to sell heavily discounted coffee, rice, sugar, pasta, coconut fat, and soap by directly driving to consumers. These “rolling shops” laid the cornerstone for what later became Switzerland’s largest retailer and also one of the 500 largest companies in the world: Migros.

Ed. Note: This article is the second, and final, part of an in-depth report on physical retail in the watch industry that first appeared in the Nov./Dec. issue of WatchTime magazine. Click here to read Part 1. 

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