Troverie took its name from the word trove, which Google defines as a “store of valuable or delightful things.” And for a while, watch execs were hoping for delightful things from Troverie.
The e-tailer, which sold only authorized timepieces supplied by authorized retailers, let watch companies sell product online in a multibrand environment that wasn’t the gray market. Over two dozen independent jewelers joined its retail network, excited to sell certain brands online that they never could before.
When Troverie debuted in August 2018 with 800 models from 16 brands, some hailed its model as a game changer. Said Breitling CEO Georges Kern in a release announcing its launch, “The watch industry has been desperate for an omnichannel sales vehicle led by true experts to properly bridge the gap between online and in-store sales.” Business Insider called it “likely the future of watch buying.”
Yet, less than two years later, it was gone.
Looking back now is “bittersweet,” says the venture’s CEO, Fred Levin, the former head of NPD’s luxury group and the Concord Watch Co.—and, before that, a McKinsey consultant and graduate of Harvard’s MBA program.
He still believes in Troverie’s concept—which lives on under the auspices of Teddy Baldasarre, a dealer that purchased the e-tailer’s assets earlier this year. He feels the site filled a real gap in the market.
Yet, for a number of reasons, Levin says, Troverie didn’t work.
Fighting the gray market isn’t so easy.
The site wasn’t just selling itself, it was selling the idea of “buying authorized”—though an authorized watch is almost always a more expensive one. The arguments for spending extra on a non-gray watch proved a little too complicated for a Facebook ad.
“Price is an easy message to get across,” Levin says. “ ‘Buy authorized’ is a hard message to get across. The major advantage of buying authorized is the valid warranty. The reality is that the percentage of watches that go bad within a warranty period is small.”
The gray market has proved so confounding in part because it really does live in a gray area. It’s legal to buy and sell gray market product, even if not everyone considers it legitimate. Troverie’s research showed that one out of five consumers was willing to pay extra to buy from an authorized dealer.
“We didn’t want to bad-mouth the gray market, but we did decide to point out there are risks to not buying authorized,” he says. “When we would talk to people, we’d say all they needed to do is go to the Better Business Bureau and type the name of the gray market sites and take a look at the comments. When consumers did that, it was like a light bulb went off.
“When [those sites] say they will get you the product within days, a lot of times that means weeks, and then you miss your gifting. When they say they’ll take product back, that’s not always easy for higher-priced items.”
In addition to selling items with the manufacturer’s official stamp of approval, Troverie prided itself on extraordinary service—but that, again, wasn’t always easy to communicate through advertising.
Troverie considered it a big advantage that it offered watches never sold before online. But that fact didn’t excite consumers as much as expected.
“We had products no one else had,” Levin says, but “people didn’t care about assortment for assortment’s sake.”
And while Troverie carried seven out of the top ten watch brands, three much sought-after names—Rolex, Patek Philippe, and Cartier—didn’t come on board.
It cost too much to acquire customers.
The high price of social media and search advertising is a problem for many companies—but particularly new ones.
“We couldn’t acquire enough customers in a cost-effective way,” Levin says.
It cost the company about $900 to acquire a new customer—which killed its margin. “The math just didn’t work,” he says.
Levin also believes social media companies weren’t as great at targeting luxury consumers as they believed. “They are focused on high-volume, low-priced product,” he says. “All the algorithms they have are for $50 or $1,000 items. But that breaks down in our universe. It’s just too hard to get 10,000 conversions in a reasonable period of time.”
Plus, some sites, under fire for lax privacy policies, now limit the info they provide.
“It was just a lot harder to find that consumer that was looking for an incredible experience and was willing to pay a premium price relative to the gray market,” he says.
Luxury e-commerce is different from regular e-commerce.
Luxury consumers expect white-glove treatment, which isn’t easy to replicate in an online setting. Troverie tried, however.
“There’s this thought that people want to remain anonymous in an e-commerce situation, that they don’t want to connect with a person,” Levin says. “From our experience, nothing is farther from the truth.”
For instance, when a customer is about to buy something but then doesn’t, sites will often retarget them with display ads or emails.
Troverie took another tack; it had the customers’ phone numbers, so it had its representatives call them. “That worked extraordinary well,” Levin says. “Our conversions rose by a factor of five.”
Another issue was with sizing.
“Online sizing is too hard for most players,” Levin says. “That to me is the biggest disconnect. We always focus on things that don’t really matter to the consumer, like using a little thicker product packaging. Sizing should be a no-brainer. From a consumer standpoint, if you just bought a $3,000 to $5,000 watch, you shouldn’t have to spend three hours [going to a jeweler] to get it sized correctly.”
So the site developed features that allowed people to measure their wrists, using video tools like Zoom. (This was before Zoom became a national obsession.) Even if customers opted not to use the tools, Troverie representatives still called bracelet watch customers, to make sure their items were properly sized before shipping.
Says Levin, “We would say, ‘We want to make it exactly how you want it. That might save you two or three hours.’ People loved it. Our return rate went down 50 percent.”
He notes that some sites, like Net-a-Porter, have been able to sell high-end items online. But they were backed by far more capital, and came on when online advertising was cheaper than it is now.
In retrospect, he feels Troverie should have joined up with other online players. “You don’t see enough alliances in this industry. You have jewelry, you have watches. It’s amazing how separate they are.”
Troverie called it quits in March, right before the onset of COVID-19. “We had gone through four capital rounds, and would have had to go through another,” Levin says. And while the pandemic has helped e-commerce, he doesn’t think it would have helped Troverie enough to boost its prospects.
“It was clear that the December 2019 holiday season didn’t produce the results that we needed to in order for us to feel confident in our business model,” he says.
He feels that Baldasarre may have better luck with the model for one key reason: He’s a popular YouTuber, whose videos attract 2 million views a month. That saves him customer acquisition costs.
Levin, meanwhile, is working on a new venture in the luxury and jewelry space.
Among his takeaways from the experience: “Luxury e-commerce companies tend to listen to a lot of e-commerce experts—people who worked for Amazon, or what have you,” he says. “There’s such nervousness about e-commerce and how to get in it. And yet a lot of these experts in e-commerce don’t have experience in luxury e-commerce. We don’t think hard enough about the difference.
“My biggest wish,” he adds, “is that people in the industry learn from what we did.”
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