David Coleridge, who joined Swiss retailer Bucherer after it acquired his company The Watch Gallery, talks about the challenges and opportunities facing the watch business...
When we drew up our dream list of companies who might one day buy The Watch Gallery, Bucherer was always at the top, because it was Swiss and because it was a family business. We owned The Watch Gallery for 11 years and although we always intended to sell it, it was previously a family business and we tried to keep that ethos.
Being a retailer in London is different than being a retailer in Switzerland but the basic principle is the same. There are advantages to being a part of a big company like Bucherer, such as its special Blue Editions [which will launch in the UK in October], which you can’t get anywhere else in the world – it’s an amazing way to bring customers to your stores. But then you still have to provide a level of service and attention that sets you apart. We have one member of staff who has such a great relationship with a customer that they go out for dinner together. That culture has fallen away on the UK high street but it’s something that we will strive to maintain.
London’s an interesting market. In the watch business, brands have fewer shops than they did three years ago, and in three years time, they’ll have even fewer. Rolex has 122 shops today in the UK. Five years ago, it had 250. Brands rely on third party retailers for the vast majority of their sales. Opening new doors is quite a challenge – the real opportunity is to make bigger, better shops that are more of a destination for customers.
Online sales in the watch business is a process of experimentation. With designer watches [as opposed to “fine” or “premium” watches], 20 per cent of the UK market is online, and that gives an indication of where things might be heading. Once people said selling watches online would be a really cheap way to do business. Well, it’s not, it’s incredibly expensive: you have to create the site, create the content, and you’re essentially selling yourself through a system that’s owned by other companies, so when Google changes the map, you need to change your route, very quickly. Online is going to affect our business dramatically. Today it’s three or four per cent of the global watch market, in five years time it’ll be 10 per cent, and in 10 years it might be 15 per cent. But London is such a focal-point for online development, so there’s a lot of opportunity here. Fine watches is a fast-evolving market but it’s also very complex. I think the most we’ve ever sold a watch for online is £50,000... in-store last year we sold one for £220,000.
London has about 400,000 Chinese tourists a year, whereas 800,000 visited the Bucherer flagship store in Lucerne. But the number visiting London is increasing year-on-year. The way people travel is also changing – in previous decades we had lots of Japanese tour groups, now we have far more of what we call “free independent travellers”, and far fewer tour groups. Tourism evolves. In the last 12 months, we have been selling watches to Americans, which we’ve never done before because it’s always been cheaper in New York.
We’ve had smartwatches come along and it doesn’t seem to be affecting the fine watch industry at all at this stage. Apple have sold 14m watches but I have no idea where they all are. Having said that, the best selling Tag last year was its connected watch. So there is an evolution happening with a much younger customer. But it’s very difficult to predict the impact of that.