“The pre-owned business: best growth option for watchmaking”
Watchfinder &Co, leader in pre-owned watches, is multiplying partial exchange programs with brands. Its cofounder Matt Bowling sees here the best option for watchmaking to increase its new watch sales.
By Cristina D’Agostino18 février 2021
Former journalist and tv producer for ITN, Sky News and BBC, Matt Bowling still knows the right words and strict analysis. A rigorous one which he did not miss twenty years ago when it came to the pre-owned watch market. That’s where he built his success. The Brit cofounded Watchfinder & Co in 2002 with Stuart Hennell and Lloyd Amsdon. Acquired in June 2018 by the Richemont group, the leader company on the pre-owned watch market offers today more than 4000 watches and 70 brands on its online platform. And the trend is accelerating, pushed by the sanitary crisis which encourages online transactions. The latest results of the Richemont luxury group showed, during Q4 2020, a 4% growth in turnover, all digital distribution included (Yoox, Net-à-Porter and Watchfinder & Co among others). An opportunity to get an overview of the pre-owned watch market and its potential, boosted by a series of partial exchange programs signed with watch brands, the latest which was announced end of 2020 with Panerai.
The pre-owned watch market is still competitive. Can you explain what is Watchfinder’s added value on this market?
The story behind Watchfinder started 20 years ago, when the internet’s potential was only at its beginnings. To imagine a client could buy a watch of a certain value online was practically impossible. In order to win this bet, we had to focus our strength on client relations. We had no boutiques and little authority on the traditional distribution market. The way we built client relations was therefore fundamental. And we never changed in spite of the difficult times over the past 20 years, including two financial crisis and a pandemic. If this had just been a price issue, we would have had no control over our clients’ loyalty. All we built was after all just about good sense. And the business hasn’t really changed.
However, you are now far from being the only ones on the market anymore…
It’s indeed very competitive. I don’t have a problem with that. And if other players also offer very good client service, that’s beneficial for the entire sector. But in spite of the competition, the pre-owned watch market remains less mature than the new watch market.
Then what is this client relation that gives you an edge?
The only figure I can share – as you know I cannot give you any strategic figures – is the one you will find on the referencing website Trustpilot, which measures client satisfaction. To this day, we have more than 23,000 clients who have given a five-star service to their experience with Watchfinder. And as you know, a pre-owned watch generates two client relations: the one with the seller and the one with the buyer of that same watch.
Some competitors promise that buying a watch and receiving payment can be done in less than 24 hours. Is such speed in transactions also your added value?
During the transaction, the authentication process is crucial. And it requires time and attention. Each watch is therefore authenticated before it is put up for sale, at our UK center that counts nine watchmakers and this is not done with a photo, as who knows whether a falsified movement lies within the case? Forgery has become very elaborate, with false watches costing often more than 1,000 francs. Our strength is our 20 year-long experience and cumulated data. We know the models that can potentially be problematic, and some cannot be authenticated with a microscope. However, the selling transaction of the piece is very quick and can be done in just a few clicks.
Rolex takes unmistakably the first place for most wanted watches on the secondary market. Can this trend evolve?
The pre-owned industry is adjacent to the new market. The inventory we have of Rolex watches reflects the market. Our key is of course our independence, as we don’t push our clients towards some brands more than others. Our work is to introduce the largest panel of watches that may fit every need. But to answer the question, no, Rolex’s position isn’t eternal. This depends on the work of each brand and on clients’ responsiveness according to where they are located in the world.
But isn’t your leader position strongly dependent on the Rolex offer?
We can only put up for sale watches that we buy from private clients. And each one used to be a new watch. If people stop buying new Rolexes, this will necessarily influence the pre-owned market.
Then what is your secret for attracting Rolex clients?
Our longevity. Our website is performing very well from a watch buying perspective. Once more, the client relation is crucial. And the acquisition of new clients selling watches is strongly linked. And I can assure you that there is huge potential.
What is your position towards the grey market?
It potentially generates bad client experiences. The grey market is first and foremost a problem for the new watch market and not for the secondary market. I cannot control the buying source of a pre-owned watch coming from a private client.
Some brands have tried to develop their own management of pre-owned watches, without being satisfied by profit margins generated. What are your thoughts about this?
Indeed, margins are not the ones generated on the new watch market. Even though I cannot communicate them, it’s not the focal point. The essential point is to understand the new watch market cannot function efficiently without a pre-owned market. In other words, the pre-owned market can be a channel for massive new watch sales and a catalyst for generating liquidity. Each pre-owned watch can be used as a partial exchange currency to buy a new watch and I don’t think new watch sales are only bought with fresh money. I think we need to see two markets functioning hand in hand and consider the margins as a whole. The pre-owned market is a perfect affordable gateway for future consumers of new watches. We must therefore think way beyond a simple margin issue. That’s the true growth factor in the new watch market.
Will jewelry, which still doesn’t have its true pre-owned website, be developed at Watchfinder?
Our expertise is limited to watches for the time being. But I am not saying this isn’t interesting. There is an opportunity, but we need to understand the risks involved. Forgery in watchmaking requires strong expertise and we need to have the same one in jewelry.
Why open boutiques today in Geneva or Paris?
Each client wants a different service. There will always be a clientele that likes to try on watches. We need to be able to offer clients the possibility to choose how they buy their watch. It’s also a way to interact with them.
Will this influence the price of the watch?
No. The client influences the price. They are the ones to decide whether the price is right. These shops are first and foremost a way for us to stand out.
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