Skip to main content Navigation

Articles and News

ALL IN GOOD TIME: THE CENTURION’S EXCLUSIVE SURVEY OF LUXURY WATCH SALES |  July 20, 2011 (4 comments)

Picture_65.png

Merrick, NY—Jewelers for years have had a love/hate relationship with watches. They love that status brands draw traffic, hate how much investment is required to buy into those brands. Love that luxury brands enhance their image, hate when they show up discounted online. Love building a base of collectors, hate to tell a customer that a watch has to be sent to Switzerland for repair and it might be months before it’s back. And so it goes.

The Centurion did a spot-check survey among prestige jewelers to gauge sales of luxury watches. Most of the survey respondents (89.3%) sell watches; only a small percentage (10.7%) do not. Among those, the reasons why they don’t were equally split between lack of margin and too much inventory buy-in required by the brands they would want.

Watches have, overall, been a good category for prestige jewelers. Most of our respondents (85.7%) said their watch business has increased or, at the very least, remained stable over the past two years. 4.8% reported a slight decrease in revenue from watches, and 9.5% reported a significant decrease in revenue from watches. Most (77.8%) also plan to stay in it, though 1/3 plan to shift resources within the category.

Most retailers are staying the course with watches. 33.3% of respondents (orange slice) say they plan to shift their resources toward stronger-performing brands next year, 27.8% (blue slice) plan to add one new brand to fill a niche, and 16.7% (purple slice) say they're going to increase their watch offerings signifcantly by adding two or more new brands in the next year. 11.1% of respondents each indicated they plan to drop one brand (red slice) or exit the watch category altogether (green slice).

Choice is good—for most. 47.6% of respondents sell three, four, or five brands of watches. 23.8, however, are heavily focused on the category, with a selection of between 10 and 20 brands. But a surprising 19% of respondents only offer one or at most two choices of watch brands.

Among our respondents who sell watches:

These figures are in line with what most retail analysts have posited about post-recession consumer spending patterns. Those consumers who were solidly rich—not living beyond their means—before the recession still are well off and can comfortably afford a luxury timepiece. They also may well be able to afford the ultra-high price point, but simply choose not to spend the extra money unless there’s a tangible demonstration of value to justify the difference. But the recession hit aspirational luxury consumers the hardest, and the Centurion study also shows entry-level luxury underperforming at retail.

Respondents were asked to list their top three best-selling brands. The greatest percentage (35%) listed Rolex (pictured top left) as their top-selling brand. 15% of respondents cited either Citizen or Cartier as their top seller, with the remainder split among Tissot, TAG Heuer, Michele, Technomarine, Belair, Bulova, and Breitling as their top-selling brand.

Some of the other brands named most often among jewelers’ top three included Swiss Army, Seiko, Panerai, Omega, Patek Philippe, Glycine, Frederique Constant, Ebel, Philip Stein, Cyma, and private label.

Among men’s watches, not surprisingly, more than 95% of respondents said sport watches are a top seller. Dress watches were next, followed by dive watches. Luxury, diamond, and novelty watches also have appeal. For women’s watches, fashion and dress watches are the strongest categories, followed by diamond and sport watches. A small percentage of jewelers (8.3%) said their female customers preferred men’s or unisex styles, but relatively few (4.2%) cited luxury watches as a strong category for women.

Luxury watch buyers prefer automatic wind most of all (orange slice), say 37.5% of retailer respondents. 25% of respondents said quartz watches (blue slice) are their top performers, followed by mechanical (purple slice, 16.7% of respondents), non-chrono models (red slice, 12.5% of respondents), and all other, gray slice.

Respondents were asked to identify the top three best-selling materials in the category.

Share This:

Comments (4):

Hedda,
One of the best, if not the best summary of the business I have seen in many years.
“Great Work”

By Mort Gershman on Jul 21st, 2011 at 2:12pm

The retail watch environment is undergoing a major change from “what watch brands others sell” to “what watch brand fits my store”.
The watch collection you carry should match the buying experience your store is offering. Beautiful jewelry, designers jewelry, unique bridal, creative design and sophisticated buying atmosphere should also be matched in the watch section.
With major brand name watch lines sold extensively in the gray market, online and in discount stores, the store owner/buyer finds that nowadays he/she needs to invest more in researching the watch market to find a brand that better fits the “story” the rest of the store is telling…

By Yanir Gvirtzman on Jul 21st, 2011 at 2:50pm

There has always been an uncomfortable relationship between the watch and Jewelery industry. Most Jewelers are Gemologists not Horologists and in the past purchased the most heavily marketed watch lines not necessarily the lines that best complimented the “aesthetic direction” of their stores. I am seeing a boutique approach begining to be embraced by Jewelers where all products offered must speak to the same aethetic direction .The heavily marketed watches have become oversaturated in distribution chanels and the margins for the Jewelers have steadily eroded.

By David Ginsberg on Jul 21st, 2011 at 8:34pm

Love this conversation!  Mort, thank you for the lovely compliment.  It’s even more rewarding coming from someone of your experience and stature in the watch industry.  And Yanir and David both make a very good point that just like boutique hotels, boutique watches do offer a chance to make a very good fit with your store and to draw customers who don’t want the popular brands.  If I had a jewelry store of my own, I’d probably have a mix of both: some well-known names for customers who want the recognizable brand or who rely on popular brands as a way to identify the caliber of a store they don’t know much about, and I’d want a few indie or boutique lines for customers who don’t want the big names.

By Hedda on Jul 22nd, 2011 at 12:56am

Leave a Comment:

Human Check