In the run-up to Baselworld, every watch industry analyst has their ear to the ground for rumblings of what’s about to drop at the world’s biggest luxury fair.
Being ahead of the curve on these matters helps prepare for and easily digest changes that sometimes seem to come from nowhere.
Entry Level Bloodbath
Good news is hard to come by in the luxury market these days. The economic crisis that has finally stung the watch industry is dreadful news for the producers, and a potential minefield for the end consumer.
In recent weeks, it’s become quite obvious that certain established brands are adopting new tactics to break into the entry-level market segment. This new dynamic could end up leaving the consumer out of pocket, or low on love for their newly acquired timepiece.
Some companies are slashing their own margins in order to enter a lower price bracket and, in theory, obliterate up-and-coming competition in that segment.
Larger mid-level brands (in the £3-10K price range) are often accused of trading more on name than inherent quality. Lower cost independents that offer intriguing, often more refined alternatives without the branding clout, have never been a greater threat to the established industry powerhouses.
Consumers are making evermore-informed choices, looking for better value, and scouring the web in search of hidden treasures. Simply put, they want quality, timeless style, and a good return on their investment (be that monetarily or emotionally).
The Winner Takes It All
Big brands cutting into their profits might sound like a field day for the aficionado, but it is a long-term strategy by industry behemoths that promises to return a very short-term gain for the buyer. Why? Because it threatens the existence of smaller, more reasonably priced independents that now have to contend with watches subsidised to a level a lean loan wolf can’t possibly hope to match.
Reason number two is far more straightforward: Heavy-hitting houses are reducing the quality of their entry-level pieces to achieve the same goal. It’s hard to weed through the trash when it’s got a well-regarded name on the dial, but beware. When buying, an entry-level luxury watch from a major maison, compare it closely to the iterations of the past. If you can see a scaling back in attention to detail – whether it be paint quality on the dial, the brightness and longevity of the lume, a shallowly engraved case back where once there was a millimetre of recess, or something else fundamental – beware.
There’s a great deal of opportunity for the end consumer in a market that sees its best creators attempting to tear strips off each other. Just make sure you’re clued-in to the piece. Get it in your hands, take your time, and make sure that you’re not walking into the trap that could consign the most interesting portions of the watch market to an early bath.
About the Author
Fell Jensen is a Swiss-trained watchmaker working as an industry analyst.
BASELWORLD 2017 – Watch this Space