Thursday, April 15, 2021

Teenage Romcom - When Brands Forget Who Asked Them To The Prom

Consolidation is the inevitable future that the denizens of Watch Town are facing. The smaller brands out there are struggling more and more for oxygen, and unfortunately most of the big brands have sucked up most of it. And that is the inevitable outcome of a free and open market.

But for every brand that is feeling the squeeze, multiply that by 10 and you begin to understand how the independent retailer is feeling these days. Every brand needs a few different champions - but the one that seems to be forgotten more often than not is the need for a retail partner. Funny word, "partner". More often than not, like so much of the language of Watch Town it clearly has different meanings to different people.

Just as "My friend" (real meaning when spoken to you by a brand manager: "You f*%#ing asshole.") means different things to different people, the word "partner" is as flexible as the morals of some of the leading citizens of Watch Town. So that's why it is always baffling when a longtime partner is told their "partnership" is now "surplus to requirements".

The big question that from the outside seems so unfathomable is, at its heart, also the easiest to answer -


Well, by way of explanation allow me to share a short bit of Henki history. As noted previously, I worked briefly at Tourneau in San Francisco back at the turn of the century. And at that time, the one thing you absolutely had to have as a watch store if you wanted to be able to piss in the tall weeds with the other big dogs was Panerai. If I had a quarter for every customer who walked through the doors looking for a Panerai in a given week? Well, let's just say I wouldn't be worried about parking meter change for the rest of my life. But there was a snag - Panerai was the domain of Shreve & Co. Now at the time, Tourneau was still growing in San Francisco, but we were selling A LOT of watches. Those of us on the sales floor begged and pleaded with our manager, district manager, anyone who would listen. Two of us actually bought pre-owned Panerais at our own store, paying full asking price for them. But the answer was always the same - "Sorry, but Panerai is with Shreve & Co.". It also bears mentioning that about this time, Breitling moved out of Shreve & Co. and became the sole domain of... Tourneau, San Francisco. Neither Shreve or us were happy about not being able to sell something, but we respected the situation.

There are very good reasons for brands to end partnerships. When I was with DOXA, we closed two very high profile doors. Our reasons were actually pretty straight-forward:

1. One of the stores was deeply discounting every watch they sold.

2. The other store's owner would pose as a customer, attempting to purchase a watch at a discount through our direct sales channel to sell it on to his own customer, rather than simply go through the order process with his sales rep (as that would take a few weeks). I suspect that even if he only made 10% on the sale, he felt it was worth it in order to make sure that the customer bought from his store rather than us.

In both instances, neither retailer could get their head around our decision to close them, because back in 2008/2009 they could snap their finger and every other brand would come running. But the doors were closed, and that was that.

So that, at least in my opinion, is a fair reason to end a partnership. But let's talk about the opposite situation, when a retailer does EVEN MORE than what is asked of them by the brand, builds them up, sells them briskly and is their devoted champion? Or what I like to refer to as the "Prom Night Dump". Just like the geeky, awkward kid who asks the most popular, attractive girl to the prom, these retailers have done the equivalent of renting the tuxedo, making reservations at the nicest restaurant and hiring a limo. And then the call comes - "Billy asked me to the prom just now, and I was really hoping he would ask me, and he did... sorry!"

We see it pretty much every other week - a new brand bobs to the surface. Every other retail store owner turns up their nose, but just like the unpopular, unlikely kid in the teenage romcom, one retailer sees something and takes a chance. And through that partner's efforts (and CASH) that brand grows in popularity and demand.

There are a lot of brands now that everyone seems to think were always "hot", but they weren't. They flailed and struggled, and nearly didn't make it here in the US, but through the work of partners, those brands were supported with the oxygen they needed to finally catch on. It wasn't some genius move from the brand's HQ, it was one or two retail partners becoming the evangelists for the brand. And it seems that lately, those are the first relationships to get cut once times are good.

Put more bluntly, it is disappointing when some retailers are closed but for no other reason than a "more attractive" date has called the night of the prom.

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