Today, investment-backed TrueFacet.com introduces the TrueFacet Boutique as an authorized online store for a growing list of high-end luxury watch brands (more brands will be added in the coming months according to the company). This is big news because most luxury watch brands, especially the more exclusive independent ones, have traditionally shunned internet sales for their timepiece goods, preferring instead more “traditional” distribution and sales models through brick and mortar boutiques. Old ways of doing business are changing rapidly as old-school watchmakers are increasingly trusting new, competent companies like TrueFacet and their colleagues to help them do business in modern times.
Many of the internet’s best watch sales firms continue to operate outside of “authorized dealer” channels. TrueFacet for example began as (and continues to be) a curated digital dealer of pre-owned watches and jewelry from big brand names. Other high-performance online watch sales firms are gray market dealers who sell new watches that initial (authorized) dealers can’t manage to sell first. While there are many good examples of online sales for watchmakers, the big news here is that TrueFacet has just taken a major step forward into being a major online authorized dealer. For the most part, other authorized watch sales online happen directly from the brand themselves.
Many individuals on the watchmaker side of the industry felt that the utility of third-party retailers might be made redundant by the internet’s ability to match customer and brand directly. In reality however, it has been the odd brand out who has proven itself as being able to run a profitable direct-to-consumer e-commerce platform. Most watchmakers who sell direct to consumers online, bypassing traditional retailers, do not achieve the success they are hoping for, for two reasons. The first reason is that most of these brands do not understand digital marketing, and thus do not advertise and communicate very well.
The second reason that most brand-direct e-commerce stores do not perform is because of the availability of discounted merchandise available online. This is where the gray market plays a powerful role. If a brand sells their $8,000 full-retail watch on their website, but the same watch is available for $6,500 from a gray market website, data strongly suggests that the consumer will go with the $6,500 option assuming the latter retailer appears to have a modicum of positive reputation. More practically, TrueFacet offers 24/7 customer service, logistics, as well as user behavior data that they intended to share with their retail brand partners. Such data is intended to help these brands better understand how their watches perform, as well as what watch collectors appear to be in search of.
The TrueFacet Boutique online authorized watch store will launch selling the following diverse assortment of watch brands:
- Bovet
- Manufacture Royal
- Arnold & Son
- Fendi Timepieces
- Les Artisans De Geneve
- HYT
- Frederique Constant
- Faberge Watches
- Tutima
The TrueFacet Boutique will have varying agreements with its partner brands, but in some instances will have territorial exclusivity. Meaning that TrueFacet will be the exclusive United States retailer of many of the brands that it is an authorized dealer of. That means each watch comes complete with a valid manufacturer’s warranty, and buying from TrueFacet will be the same as buying from a traditional brick and mortar store (without the going into the store part).
TrueFacet also seems to suggest that their model will not be a threat to brick and mortar retailers who may also carry the same brands. Part of this plan is to reduce gray market inventory, which allows for rampant discounting to happen. If TrueFacet is the only dealer in such a large territory, and agrees to keep retail prices consistent, the availability of gray market stock should be extremely limited. With that said, according to TrueFacet, more than 65% of watch and jewelry sales will happen online within a period of five years from now.
In addition to announcing that the TrueFacet Boutique is now an authorized dealer of nine brands, it will also now start to sell certified pre-owned watches. Pre-owned has been a hot area in watch sales, and certified pre-owned watches are used watches that are certified (in some instances with the original manufacturer’s seal of approval) to work, and be in particularly good order. More so, the best part about certified pre-owned watches is that like new watches, certified pre-owned watches will come with a warranty – fulfilled by TrueFacet.
This type of news is of particular interest to me as I’ve been eager to see the traditional luxury watch industry find better formulas for working online. The reality is that most watch lovers conduct the majority of their research online, discover new watches online, connect with other collectors online, and also purchase watches online. The real-life experience of being a watch collector can never be entirely replaced on the internet – but it is where people seem to prefer doing the majority of their transactions and connections.
More so, for a while now I’ve held a “leave it to the professionals” approach when it comes to retail and sales. Watch brands are for the most part only really good at designing and making watches – not always selling them. The wisdom of the traditional relationship was that watchmakers produced covetable items, and retailers knew how to attract customer attention and sell them items they learn to covet. No one company was responsible for manufacturing something and convincing each and every consumer to get it.
It is my belief that success in online watch sales requires the competition of a few multi-brand watch stores online, as opposed to a bunch of watch brands going direct. It is likely a good idea that wrist watch retail profit margins go down a bunch, but consumers are probably best served when buying from retailers who also work as distribution partners with the brands.
With great interest we will carefully observe and track how the wrist watch retail environment continues to evolve online. You can see how TrueFacet does it at the TrueFacet Boutique.