Baselworld is going through significant challenges, but one key aspect of the fair remains unchanged — brands that choose to exhibit, buttressed by industry behemoths Rolex and Patek Philippe, use it as a vehicle to unveil their latest product offerings and new tricked-out assortments. Once an event solely for retailers to place a year’s worth of orders, now in the age of social media and e-commerce where six-figure watch sales have become normalized, the Swiss fair has also become a valuable marketing and public relations tool, and its messaging reverberates in the watch category’s secondary market, where both start-ups and brick-and-mortar retailers vie for a share of the burgeoning pre-owned and vintage watch category.
“If you were to tell me four years ago that the brands would be having conversations about the pre-owned market, I’d have said you were crazy,” said Hamilton Powell, chief executive officer and founder of the Atlanta-based watch e-tailer Crown & Caliber. “It used to be that the attitude about the pre-owned market was that it wasn’t luxury.”
Powell said a major turning point was Compagnie Financière Richemont’s purchase of Watchfinder.co.uk Ltd. “That was a major fissure,” he said. “Now the brands are beginning to have a real different attitude to the pre-owned market.”
“Today every collector I visit has a mix of modern and vintage watches,” commented John Reardon, international head of watches at auction house Christie’s. “It’s an evolution I’ve seen in the last few years. Vintage and pre-owned collecting is becoming main stream and it is driven by social media, word of mouth and online sites. Honestly, the brands are the last to join the bandwagon.”
He added, “It’s a bit of a nuclear race, of everyone trying to get a piece of it, but I think of it as ‘all the tides rising together’ and it’s educating and infecting more people with a passion for collecting.”
Reardon, who came up the ranks at Patek Philippe before his current tenure, said pre-owned watch sales landed above $100 million at the global auction house last year. Christie’s not only uses the live auction model to generate sales in the category but, according to Reardon, the strongest growth stems from online sales as well as the auction house’s private sales program.
“We’ve really seen a punctuated shift. In the five years of selling online, last year we had an explosive growth. Really, more and more people are discovering it and more eyes mean more business,” he explained, with the biggest share of sales being in the U.S., followed by the Middle East and Asia, adding that private sales program “is growing even faster, in terms of percentage, than online.”
“We are more known,” explained Powell of his attending the Swiss trade show, “and cast in a much more positive light.”
The secondary market has been a focus at retailer Tourneau for decades, said Ira Melnitsky, ceo of the U.S.-based luxury watch retailer, which operates 28 stores worldwide, adding, “It is one of the core foundations of our company.”
“Brands that have very strong fairs, it carries over into their existing inventory as well as their pre-owned market,” said Michael Sandler, senior vice president, merchandising and strategic planning at Tourneau. “A brand that is hot for new launches tends to perform really strongly in the pre-owned segment. There is an absolute carry over effect that is established.”
“One of the biggest drivers has been Instagram,” said David Lee, general manager of watches at Stock X, a digital platform for the buying and selling of goods that is set up in a similar fashion to the stock market. The site was originally set up as a streetwear vertical in 2016 but launched a watch program in mid-2017. Lee, a former Tourneau executive, was brought on last June to help drive growth in the category.
Product reveals at the Swiss fair are closely guarded secrets until the opening day, but Lee sees a shift. “Using the strength of social media, now you see brands possibly hinting,” he said “Rolex’s last 15 Instagram posts have been Milgauss posts [a style discontinued in 1988 and brought back in 2007 with the latest style being introduced at Baselworld 2014]. Really for the first time, they are seeming to telegraph what they might show at the fair.
“But for some of the announcements, it’s more about what they discontinue versus then what they announce new,” Lee explained. “There are rumors of Rolex discontinuing the Batman and the Hulk styles and that leads to an uptick in prices. Both are trading well over retail right now and if they were to announce a discontinuation, you would see an immediate surge in their pricing and sales.”
While the fair showcases new styles that still won’t show up at retail channels till mid-summer, Powell said Crown and Caliber can sometimes receive the new Baselworld styles on the site a few weeks after they have gone on sale at traditional retail channels. “Sometimes as soon as one to two weeks later,” he said. “Maybe it was a gift, or they bought it and didn’t really want it. So, in the secondary market, we really have to be prepared, as there won’t be any historical sales data yet. So instead, we look at the last years, what was the deviation or retail from last year’s product, what is the depreciation and appreciation to try to get some sense of what it will be this year.”
Recently the watch industry has debated the relevancy of fair, but executives agreed that it was still an important and key part of the industry, albeit a changing one.
“I look at it as a way for the brands to have a massive platform — whether it’s SIHH or Basel — to share their wares. Basel is so necessary for the industry; it creates deadlines for the whole manufacturing cycle that are entrenched in the industry, these deadlines, being a hard line when things must be shown at the fair,” Reardon explained.
“For us as a retailer it’s extremely valuable to go to one place and be able to compare and contrast approaches between brands,” Melnitsky said. “It creates such a large amount of interest and buzz, if that were spread out throughout the year, you wouldn’t get that same concentrated effect.”
He added, “We step off the planes from Switzerland and the e-mails and texts start coming through. Right away, people are really excited about the new releases.”