Tuesday, February 21, 2017

Whistling Past the Graveyard - The Danger of "Alternative Facts"

And January's numbers are in...

And the good news?  
It hasn't gotten any worse!

And the not-so-good news? 
It really hasn't gotten any better.

Courtesy of the FH

Now it is important that we take October, November, December and January in context - these are the most critical months in the sales year owing to the holiday gift buying season and frankly, these numbers suck.

Of course, this is not reflected by a lot of the "alternative facts" foisted before, during and just after the SIHH.  

And I guess that every party needs a "pooper", so allow me to fill that role.  The numbers simply do not support the hype.  And all of the optimism in the world will not re-hire laid off Richemont watchmakers, will not restore lost holiday revenue from retail partners, will not undo the damage that the steady supply of the grey, dark grey and light grey markets by the brands themselves has brought.  

Because, gentle reader, the reason why the numbers are not improving is because although people are buying watches, they are letting their browsers do the walking and the dearth of cut-rate bargains to be found in the grey market are continuing to drain the pool of potential customers for the actual authorized retail partner. It is a little bit like Dom Perignon selling half of their stock to Bob's Discount Liquor Barn at 10 cents on the dollar to ease over-supply, then request full price from one of their "authorized" vendors and to do so earnestly and with a straight face. 

Working with the grey market is (although I don't have any personal experience with this comparison) probably not unlike what I've heard taking Heroin is like.  The first experience is great, but once you've had your nose opened, it's harder and harder to break away.  And like any situation where you are selling goods for a certain price, it is harder and harder to demand that price when an alternative can be found for 30% of what your authorized retail partner is asking for with a few mouse clicks.  Not 30% off (like your shifty, cut-rate authorized retail partner), but 30% OF the suggested retail price.  Suddenly that pain in the ass retailer who churns and burns your stock is suddenly looking like a highly valued retail partner ; )

So here's some advice from a Northern Youth - the only way out of winter is through it.  Adjust the budgets to reflect reality, produce less, and live within your means.  A 10% profit is much more appealing than a 110% loss.

Or, of course, we can just interpret these numbers as "alternative facts"...

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