How Resale and the Gray Market Are Forcing Watch Brands to Innovate
The rise of the pre-owned watch market has coincided with the growth of secondary markets across the fashion industry, from the bustling fashion resale market with sites like The RealReal to the resale juggernaut of sneakers.
Pre-owned watch retailer TrueFacet, for its part, has seen a massive increase in sales this year, with mobile conversion rates 89% higher than the previous year, putting it on the right track. to beat previous fourth-quarter records.
While the watch resale market holds parallels with the rise of other fashion resale platforms, TrueFacet founder Tirath Kamdar sees watches as being more similar to cars than other fashion sectors. or clothing.
“Like cars, watches are machines,” Kamdar said. “The cars remain attractive to customers for years. They improve over time and don’t fall apart like an old shirt would. Old Omegas from the 70s are still worn all the time, just like cars from that era are still driven.
It is difficult to judge the size of the used market, but NPD Group estimates it to be around three times the size of the regular watch market in the United States Luxury watches, in particular, have seen sales increase in the resale market, according to TrueFacet.
Consumers and their changing shopping habits are driving this new interest in buying second-hand luxury watches, Kadmar said. Young consumers, in particular, are drawn to second-hand because the stigma of buying second-hand has disappeared.
“Young people tend to want new things, new experiences,” Kamdar said. “They buy stuff and then trade it. Now when you look at the watch and jewelry industry, it doesn’t meet that demand. There is a big gap there. For young people, the stigma of buying second-hand does not exist.
The secondary market has become an undeniable force in luxury watches today, to the point that the major Swiss watch brands are forced to take notice. Brands like Raymond Weil and others have started working with TrueFacet on Certified Pre-Owned programs.
This symbiotic relationship between the primary and secondary markets is important for watch brands. Older customers who would be most likely to purchase a brand new luxury watch from Rolex or Patek Philippe are aging in the market. Young consumers are less concerned with the need to have something new and are more likely to buy something used.
Additionally, getting directly involved in the resale market helps brands ensure that they are in control of the experience customers have with their watches, rather than being subjected to the questionable quality of the so-called ” gray market.
“As an industry, we’ve been overly cautious,” said Lauren Calmas, CMO of certified luxury watch online retailer Troverie, which has just entered into a partnership with Swiss watch database WatchAdvisor. “But by not responding to market changes, we created a void that gray market sellers filled. These unauthorized dealers are dominating watches right now, but it’s risky for consumers because there’s no guarantee what you’re going to get. It also creates a problem for brands, when bad gray market experiences permanently turn a customer away from a brand.
This risk aversion, common to the world of luxury, has changed in recent years. Calmas says she has seen more risk taking from the watch industry in the past 24 months than in the past 24 years. Watch giant Richemont has partnered with digital platforms like Net-a-Porter and Alibaba and even started acquire used watch sellers like WatchFinder. Competition from gray market sellers is finally waking up luxury watch brands to the fact that they need to modernize.
“Seventeen hundred brick-and-mortar jewelry watch stores have closed in the past two years alone,” Kamdar said. “Brands need to invest in digital and second-hand in order to take control of the relationship their customers have with their watches.”