Okay, the news that everyone is talking about is that of COMCO finally holding SWATCH Group's feet to the fire and ensuring that they keep to the terms of the deal that they (SWATCH Group) pushed for. In essence that they would no longer be required to sell to brands outside of the group. Now the reality is that COMCO is now saying not only do you not need to sell outside of the group, but you can't.
Of course this is big news, and the blogosphere and Forum land are both abuzz. Yes, COMCO is basically reintroducing their proverbial foot to the proverbial floor and stating that SWATCH will not be allowed to sell outside of the group. Now what is interesting in all of this is just who is crying foul. Richemont and the certain son of a certain German/Swiss jeweler/watchmaker are aghast. In fairness, Richemont is probably keeping their own counsel on this one, but you get the idea. Because despite all of the crowing and marketing dollars pumped into their respective gas machines, it would seem that certain brands boasting manufacturing capability are still dependent on SWATCH Group's ETA as a base.
The Sky is Falling!
Well, actually, the sky fell a few years ago. I have read with (I'm not going to lie, a wee bit of amusement) that some brands will be "crippled" by this new restriction. And honestly? I'm calling "Bullshit/Light" on this one. Will brand X be able to make as many new watches as they want from brand new ETA movements? Well, no. But it begs the bigger question -
How many watches does brand X currently have in inventory or did they pump into the grey market? Put another way? So many brands continue to run on the same belief that, somehow, watches are perishable like milk or eggs. And they are not. It does require a certain commitment to their brands and the products that they put out.
Moreover, to use the golf analogy? They could have "pulled up" and spent some time, money and effort to identify other alternatives for movements.
Remember when the shit hit the fan back in 08? Remember how a few brands, you know, the ones that didn't insist on having completely new collections EVERY YEAR seemed to weather the storm?
Also, when we talk about small brands, believe it or don't but they typically had to go to outside brokers to get movements in the first place. You think ETA was going to sell directly to them? Think again. And with a smaller brand, there is greater flexibility and ability to pivot.
I can make a very personal parallel example -
Watch brands will state that there is only enough marketing money to go around and therefore, sorry smaller outlet, no marketing (read ad/advertorial) money for you. Does that mean that it's "end of days" for watch media? Of course not. Because like any industry, there is always contraction and expansion. And it is often the smaller, pluckier company that can surprise the experts.
Some brands saw this coming and made alternative arrangements. Some ordered well in advance. Some cut back on their production and re-forecast what they would actually build and sell and they are going to be okay in the immediate future. I realize that is clearly NOT how every brand thinks.
But again, it begs the bigger question for the bigger brands-
When you continually OVER ESTIMATE how many watches you are actually going to sell through regular channels and continually dump through the grey market, you not only dilute your brand in the NOW, you further dilute the demand in the future. Moreover, when you claim to have manufacturing capabilities, but in truth you are dependent upon ETA for the basic platform what is that really saying? It's great to have flashy, sexy complications. But none of that matters if you don't have the base to mount them on.
Now I suppose that is an easy comment to make, particularly if you are brand X and you felt that you had a solid agreement with SWATCH Group to get your movements.
But the irony in all of this is possibility that SWATCH is now is sitting on more movements than they know what to do with for the foreseeable future. Remember, they assumed that what COMCO would say is, go ahead and sell to whoever YOU want. And they probably accumulated sufficient movements to re-assert their control of the market once 2020 arrived.
Lastly, think about this - When certain grey and light grey outlets are listing brand-new watches on their sites MONTHS before they arrive at authorized retailers, it tells you something. And what it tells you is that the brands have not really learned any discipline and are still over-producing. It also tells you that there is a willing avoidance at every level of a brand to really understand and accept what the RETAIL reality is. By continually over producing and selling to any outlet necessary in order to ensure that it appears that they are meeting sales goals, they continue to cheapen and degrade their brands.
It has been a non-stop merry-go-round for the past 10 years, and it would appear that at pretty much every level, the buffet has been closed and it is time to pay the check. Let's see who's got room on their credit card.
Or put it even more simply than that - remember when you were in school and mom or dad would constantly ride you to get your homework done before Sunday at 11:00 PM?
Of course this is big news, and the blogosphere and Forum land are both abuzz. Yes, COMCO is basically reintroducing their proverbial foot to the proverbial floor and stating that SWATCH will not be allowed to sell outside of the group. Now what is interesting in all of this is just who is crying foul. Richemont and the certain son of a certain German/Swiss jeweler/watchmaker are aghast. In fairness, Richemont is probably keeping their own counsel on this one, but you get the idea. Because despite all of the crowing and marketing dollars pumped into their respective gas machines, it would seem that certain brands boasting manufacturing capability are still dependent on SWATCH Group's ETA as a base.
The Sky is Falling!
Well, actually, the sky fell a few years ago. I have read with (I'm not going to lie, a wee bit of amusement) that some brands will be "crippled" by this new restriction. And honestly? I'm calling "Bullshit/Light" on this one. Will brand X be able to make as many new watches as they want from brand new ETA movements? Well, no. But it begs the bigger question -
How many watches does brand X currently have in inventory or did they pump into the grey market? Put another way? So many brands continue to run on the same belief that, somehow, watches are perishable like milk or eggs. And they are not. It does require a certain commitment to their brands and the products that they put out.
Moreover, to use the golf analogy? They could have "pulled up" and spent some time, money and effort to identify other alternatives for movements.
Remember when the shit hit the fan back in 08? Remember how a few brands, you know, the ones that didn't insist on having completely new collections EVERY YEAR seemed to weather the storm?
Also, when we talk about small brands, believe it or don't but they typically had to go to outside brokers to get movements in the first place. You think ETA was going to sell directly to them? Think again. And with a smaller brand, there is greater flexibility and ability to pivot.
I can make a very personal parallel example -
Watch brands will state that there is only enough marketing money to go around and therefore, sorry smaller outlet, no marketing (read ad/advertorial) money for you. Does that mean that it's "end of days" for watch media? Of course not. Because like any industry, there is always contraction and expansion. And it is often the smaller, pluckier company that can surprise the experts.
Some brands saw this coming and made alternative arrangements. Some ordered well in advance. Some cut back on their production and re-forecast what they would actually build and sell and they are going to be okay in the immediate future. I realize that is clearly NOT how every brand thinks.
But again, it begs the bigger question for the bigger brands-
When you continually OVER ESTIMATE how many watches you are actually going to sell through regular channels and continually dump through the grey market, you not only dilute your brand in the NOW, you further dilute the demand in the future. Moreover, when you claim to have manufacturing capabilities, but in truth you are dependent upon ETA for the basic platform what is that really saying? It's great to have flashy, sexy complications. But none of that matters if you don't have the base to mount them on.
Now I suppose that is an easy comment to make, particularly if you are brand X and you felt that you had a solid agreement with SWATCH Group to get your movements.
But the irony in all of this is possibility that SWATCH is now is sitting on more movements than they know what to do with for the foreseeable future. Remember, they assumed that what COMCO would say is, go ahead and sell to whoever YOU want. And they probably accumulated sufficient movements to re-assert their control of the market once 2020 arrived.
Lastly, think about this - When certain grey and light grey outlets are listing brand-new watches on their sites MONTHS before they arrive at authorized retailers, it tells you something. And what it tells you is that the brands have not really learned any discipline and are still over-producing. It also tells you that there is a willing avoidance at every level of a brand to really understand and accept what the RETAIL reality is. By continually over producing and selling to any outlet necessary in order to ensure that it appears that they are meeting sales goals, they continue to cheapen and degrade their brands.
It has been a non-stop merry-go-round for the past 10 years, and it would appear that at pretty much every level, the buffet has been closed and it is time to pay the check. Let's see who's got room on their credit card.
Or put it even more simply than that - remember when you were in school and mom or dad would constantly ride you to get your homework done before Sunday at 11:00 PM?
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