Monday, January 2, 2017

Why Watch Brands Should Ignore Robert Browning

Who famously wrote  -

A man's reach should exceed his grasp

Which makes you sound like a bad ass when you say it in a sales planning meeting, but it makes you look like a plonker when the books get closed for the year and you've got millions of francs worth of watches still not paid.  None of this is new news.  But to quote another poet, the shit's about to get realer!

For at least the past 5 years, brands have been radically overproducing.  Now it is worth noting that this overproduction was not the result of bad times, but rather good ones.  Sorry to pick on JEANRICHARD but it is a perfect example - millions are invested, brand is reinvented, a modular concept for the three different lines is implemented, and limited selection is offered.  And the crowd goes WILD!

But then the shot-callers got the fidgets.  The logic being that if they are making their numbers with a black, silver and blue dial, they should make green, aubergine (in fairness, my all-time favorite) and have several partnerships as well.  So in less than an 8 month period, they went from a tight collection that everyone wanted, to what can honestly be called a stretched and diluted identity.  All those watches had to go somewhere, so even 2 years ago JEANRICHARD was dumping stock to the grey market.  But the grey market couldn't absorb and dispatch it all, so a lot of it then moved to the light-grey market (even deeper discounts).

Interesting to relate, I now use this as a talking point when consulting with other brands.  And it becomes a very simple question:

Are you trying to build a brand, or are you trying to sell a shit-ton of watches in a short amount of time?  

Now while these two ideas are not necessarily mutually exclusive, they are not always going to happen within parallel time frames.  What we see happening in a handful of brands like JEANRICHARD is an unfortunate tendency to overreact when things slow down.  The logic being - "hey, we need more selection!"  More selection means more sales, right?  Not necessarily.  Because what inevitably happens is that while you might sell a few aubergine dial watches, you sell fewer silver dialed ones.  In other words, you have increased your product selection (and your costs), but your sales have stayed the same.  Lather, rinse, repeat, and suddenly your safes start to resemble the Star Ship Enterprise being overwhelmed by Tribbles -

Now take this image and put it on steroids.

Remember that whole new "Swissness" thing some folks have been talking about?  Well, the clock is ticking, and Swiss brands need to "export" as many of their previous and current collections that don't quite meet the new standards as possible in the next 12 months.

So maybe, just maybe, brands need to start thinking about how big (or small) their grasp really is, and adjust their reach accordingly.

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