Merry Christmas...

It seems that it's that time of year again in watch land.  And while I would truly like to start being wrong about this stuff, I didn't even need the over/under on this year's Tempus Fugit office pool.  

Shamelessly Borrowed from the world-wide infoweb

Albert Einstein is attributed with the following:
"The definition of insanity is doing the same thing over and over and expecting different results".

Now in fairness, I never met the man, and there are a lot of conflicting memes out there with variations of the above quote.  But the sentiment is the same no matter how you slice it.  

So as is often the case in watch land, it seems that Santa is bringing a package of poop for more than a few dedicated employees working for one of the big groups. Suffice it to say, this is a group, and a brand that has gone through exactly the same thing in the not-so-distant past.  And it is a brand that you would like to think might have learned something from the recent past.  No need to mention names here, the news will ooze out soon enough and put paid to a fairly large number of folks employment conditions - as in they won't have any for the immediate future.

So the question remains, is brand X ready to maybe consider that they can do things a little differently?  Let's be honest, layoffs suck.  Layoffs happen not because the people who are being laid off did anything wrong. They suck for the shareholders, they suck for the brand and they absolutely suck for the people who get laid off.

Curious to relate?  The people who should have had their eyes on the prize?  If this latest round of layoffs go anything like they have in the past, they will all be fine, home and dry and opening presents with big bows on them, planning ski trips. and winter getaways.  The people who actually make the watches and take care of practical matters?  Well, let's just say that they have the joy of explaining their kids why Santa stiffed them this year.

Here's hoping I'm wrong next year.  And that Krampus has a little something special for the people who keep dropping the ball.

The Deadweight Loss of Christmas

I promise you that I am neither Scrooge or Krampus -

Shamelessly borrowed from the world-wide infoweb

But yet another year is rapidly coming to a close, and the emphatic requests from watch pr folks urging me to include their latest offerings in my "Gift Guide".  This told me first and foremost that they really had no idea about me, and likely had never read Tempus Fugit.  Well, fair enough.  

But then it got me thinking on the angst and economic necessity of the holiday gift giving season for the watch industry.  It goes without saying that it truly does largely determine how well (and not well) a brand is going to do that year.  And I can understand how for a lower end brand that could and maybe even should be the case.  A SWATCH, a Fossil, even a G-Shock is not an unreasonable amount to spend on a Holiday gift to stick under the tree or give on the eighth night, or whatever else your winter holiday gift giving might entail.  But where I feel we have lost the plot as watch fans is that the big events that are meant to really be meaningful (Graduations, Marriages, Anniversaries, REALLY BIG PROMOTIONS at work) all seem to drift by the wayside with the sensory overload that the holidays can bring.  

I heard a very interesting bit on NPR today and found this via Google -

The economics of wasteful spending: The deadweight loss of Christmas

And it really made me think about trying to understand how much do we really value that one or two "special" watches, and do they really even exist for some of us any more?  Now I realize that is a bit of a holiday downer, and I don't mean to piss in anyone's eggnog, but if you are reading this and your feeling down because you haven't (and likely will not) receive that much wanted Patek Philippe, Rolex or other beyond extravagantly priced holiday present, don't feel bad about it.  

I realize that this is just my own personal opinion, and may well be part of the reason why I don't work full-time for a watch brand any longer, but what I love (particularly) about the two watches my wife Wendy has given me for Christmas presents is that they really meant something on that particular holiday (and still do).  So any Christmas, you will see me wearing my Junghans Max Bill (circa 2000, gold plate and manual winding) which she gave me the Christmas after I had lost my high-flying career and been brought back down to earth managing a Starbucks in San Francisco.  It was in some ways the very worst and the very best thing that ever happened to me professionally.  And in the process I rediscovered myself and what made me happy.  And on Christmas, you are just as likely to see me channeling my "inner-Hayek" by wearing a watch on my right wrist as well - a burgundy SWATCH which was one of the first larger "Gent's" size models that SWATCH came out with.  And as I recall, this was the Christmas after my father died, and for the first time I didn't have a parent to call or get a call from on Christmas.  It was something that reminded me that while life has a time limit on it, it is something that should be enjoyed.

Now I realize, again, that this is all a matter of personal opinion, and no judgements from me if you disagree and feel that a holiday isn't a holiday without a new $3,000 to $5,000 watch on your wrist.  All that I would say is that it should not be the price tag on the watch that moves you or the person who buys it for you.  It should be the thought that goes into it.  Now if that person has the disposable income to make such a grand gesture?  Make sure you appreciate and treasure it, and don't go looking to re-sell it to fund your next "dream watch, and the one after that, and the one after that ; )

Happy Holidays!  And enjoy your watches!

Black Friday Repeat

This originally came out nearly a year ago.  And I probably would have let it sit in the closet like an ugly Christmas sweater had I not gotten a promotional email from a "light grey" market site that offered me the rare and wonderful opportunity to purchase "BRAND X's" rare and wonderful price, at the rare and wonderful discount of 65% off!  It also bears mentioning that this "group source e-tailer" also has a section titled:

Sex & Lingerie!

Good to know that after I save a boatload of cash on a grey market watch, I can then purchase some "adult toys", lube, and God knows what else that has fallen off the back of the "cyber truck".

Despite assurances to the contrary, I am still not convinced that the shot callers have really gotten their heads around what is going on right now, and so I am going to air this one out again -

The Myth of Black Friday

So I got the question from more than a few friends and colleagues in Switzerland and Germany -
"What are you doing working, why aren't you out shopping?  Isn't it what you call Black Friday?"

So before going any further I want to be clear that in some retail segments, the carrot of "low, low prices" is a strong motivator.  And as the chaos done to a Nike store will attest, too much food and alcohol, combined a four day weekend and perhaps too much time forcibly spent with family members otherwise only seen at weddings and funerals can drive even the sanest, most rational person to lose their shit.

But what has started to creep into the luxury industry is a growing sense of uncertainty, and this has begun to manifest itself into more random short-term solutions that may (or may not) have the desired impact.  And when we are talking about watches, at least those of a certain price point, we are not talking about the types of things that typically wind up under the average American Christmas tree.  A discounted cashmere sweater?  Sure!  A G-Shock?  Absolutely!  And I have no doubt that there may well be people out there who awake December 25th to find that Santa has left a timekeeper with a retail value of over $5,000 in their stocking.  But I think it's safe to say that in virtually every economy, that is an atypical household.

For those of you unfamiliar with the concept of Black Friday, allow me to inform you that this is a phenomenon that began in the US.  The idea being that the majority of Americans had a day off from work on the day after Thanksgiving (Thursday) and therefore it might be the perfect way to kick off the holiday shopping season.  So that's the Friday part, but the Black aspect was in reference to the ledger books.  As anyone who has suffered through accounting will share, black is good, red is bad.  Black means that you are not losing money.  And the operating theory being that good year or bad, the amount of sales going on would push you firmly into the black for the remainder of the year and that everything after that would be profit.  And from this, we then moved to Cyber Monday.  And in fact, hell, let's just make it Black December because truth be told, nobody can tell the difference any more.

Now in the high end watch business (and let's lower the bar a little and say that is anything over $1,000), there might have been the 10% or 15% deal.  Or retailers would park all of the "pre-owned" or discontinued models in a "Holiday Special" show case.  But it was understood that this display case was the watch equivalent of the Island of Misfit Toys.  If you wanted something desirable you were maybe going to get a small discount, but nothing of the magnitude of what we are seeing this year.  And this discounting mania has moved beyond just the retailer to brands offering 25% off on their own websites.  They are essentially working to move product under the guise of a holiday promotion.  This, in turn, succeeds at then driving the grey market, Mass Drop and Touch of Modern prices to dip even lower than they already are.  I received nearly hourly email promotions on the most recent price discount on Touch of Modern and Mass Drop over the holiday weekend.

Now whether or not these deep-discount sales promotions will succeed in saving the brand's bacon remains to be seen.  But what this really all comes back to is what I've been saying for YEARS - over production.  If your product is scarce, it will be desired.  You can then demand a premium price.  When your product is everywhere, it becomes less exclusive.  Moreover, it manages to lower the desirability of other brands at the same level or price point.  The only exceptions that readily come to mind are Patek Philippe and Rolex.

Put another way, just as a high tide will raise all the boats in the harbor, a low tide will bring them all down.  Supply and Demand is a pretty simple concept, and when you continue to ignore it for years?  Well let's just say it will take years to undo the damage.  And maybe those brand CEOs who refused to forgo the high life for the sake of their brands and their employees should be getting coal in their stockings, and maybe a visit from Krampus ; )

Happy Holidays from Krampus

Happy Holidays, and enjoy your watches!

The Myth of Black Friday

So I got the question from more than a few friends and colleagues in Switzerland and Germany -
"What are you doing working, why aren't you out shopping?  Isn't it what you call Black Friday?"

So before going any further I want to be clear that in some retail segments, the carrot of "low, low prices" is a strong motivator.  And as the chaos done to a Nike store will attest, too much food and alcohol, combined a four day weekend and perhaps too much time forcibly spent with family members otherwise only seen at weddings and funerals can drive even the sanest, most rational person to lose their shit.

But what has started to creep into the luxury industry is a growing sense of uncertainty, and this has begun to manifest itself into more random short-term solutions that may (or may not) have the desired impact.  And when we are talking about watches, at least those of a certain price point, we are not talking about the types of things that typically wind up under the average American Christmas tree.  A discounted cashmere sweater?  Sure!  A G-Shock?  Absolutely!  And I have no doubt that there may well be people out there who awake December 25th to find that Santa has left a timekeeper with a retail value of over $5,000 in their stocking.  But I think it's safe to say that in virtually every economy, that is an atypical household.

For those of you unfamiliar with the concept of Black Friday, allow me to inform you that this is a phenomenon that began in the US.  The idea being that the majority of Americans had a day off from work on the day after Thanksgiving (Thursday) and therefore it might be the perfect way to kick off the holiday shopping season.  So that's the Friday part, but the Black aspect was in reference to the ledger books.  As anyone who has suffered through accounting will share, black is good, red is bad.  Black means that you are not losing money.  And the operating theory being that good year or bad, the amount of sales going on would push you firmly into the black for the remainder of the year and that everything after that would be profit.  And from this, we then moved to Cyber Monday.  And in fact, hell, let's just make it Black December because truth be told, nobody can tell the difference any more.

Now in the high end watch business (and let's lower the bar a little and say that is anything over $1,000), there might have been the 10% or 15% deal.  Or retailers would park all of the "pre-owned" or discontinued models in a "Holiday Special" show case.  But it was understood that this display case was the watch equivalent of the Island of Misfit Toys.  If you wanted something desirable you were maybe going to get a small discount, but nothing of the magnitude of what we are seeing this year.  And this discounting mania has moved beyond just the retailer to brands offering 25% off on their own websites.  They are essentially working to move product under the guise of a holiday promotion.  This, in turn, succeeds at then driving the grey market, Mass Drop and Touch of Modern prices to dip even lower than they already are.  I received nearly hourly email promotions on the most recent price discount on Touch of Modern and Mass Drop over the holiday weekend.

Now whether or not these deep-discount sales promotions will succeed in saving the brand's bacon remains to be seen.  But what this really all comes back to is what I've been saying for YEARS - over production.  If your product is scarce, it will be desired.  You can then demand a premium price.  When your product is everywhere, it becomes less exclusive.  Moreover, it manages to lower the desirability of other brands at the same level or price point.  The only exceptions that readily come to mind are Patek Philippe and Rolex.

Put another way, just as a high tide will raise all the boats in the harbor, a low tide will bring them all down.  Supply and Demand is a pretty simple concept, and when you continue to ignore it for years?  Well let's just say it will take years to undo the damage.  And maybe those brand CEOs who refused to forgo the high life for the sake of their brands and their employees should be getting coal in their stockings, and maybe a visit from Krampus ; )

Happy Holidays from Krampus

Happy Holidays, and enjoy your watches!