The time is right for selling watches.
According to an informal JCK survey, independent jewelers throughout the United States are pleased with their watch business this year. The view from behind the counter is that timepieces increase customer traffic and store profits, and that high-end name brands add prestige.
“We do seem to be in the middle of a big watch boom,” observes Alexander Rysman of Romm & Co. Inc. of Brockton, Mass. At the other end of the country, in Newport Beach, Calif., Marion Halfacre of Traditional Jewelers Inc. is having similar success: “We’re selling, pretty well, all the lines across the board,” he says.
This spring, JCK surveyed its panel of retail jewelers to assess the state of the watch market. Questionnaires were mailed to 409 independent jewelers, and 140 replied. Some 20% of the respondents report that a healthy 15% or more of their sales came from watches last year. And prospects for this year remain favorable. More than 35% of those making a forecast predict “excellent” or “very good” business this year; another 40.5% say traffic will be “good.” A considerable number have even changed their minds about the market; 8.6% report that at one time they nearly discontinued watches, but now the products are an important part of their business.
Watching out for profits. Several factors are contributing to the upbeat mood. “I have a lot of products, I do a lot of advertising, I have a wonderful location, and I have a great sales staff,” says Halfacre.
Rumi Engineer of Prudential Jewelers in Chicago says that smart staffing enabled him to increase his watch business to 15% of total annual sales last year, compared with 10% in 1995. “I have an employee who loves watches,” he explains, noting that this salesperson has taken on the tasks of buying, selling, and promoting timepieces. “You’ve got to have an employee who’s really, really interested; it’s a big, big change for us.”
Similarly, Irving W. Marks of I.W. Marks Jewelers in Houston says that customers have responded to the “overall service and attitude of my employees.”
Timely opportunity. What makes jewelers feel that these are good times for watches? Of the panelists surveyed, 60% believe timepieces attract new customers to their stores, and nearly 40% say they add prestige. Forty percent consider watches to be profitable items, and more than 20% say they stock watches in order to make use of manufacturers’ cooperative advertising dollars. “The watch business is a brand-name business,” Rysman points out.
The brand carried by the greatest number of respondents is Seiko (31%), followed by Rolex (24%), Bulova (19%), Pulsar (18.5%), and Cyma (17%). Price-wise, panelists cite both the high end and the low end as profitable: Nearly 60% of those responding to the question say that watches priced at $700 and under satisfy their customers’ needs, while more than 18% check the $2,000-and-up range.
Helping hands. The watch manufacturers themselves play a critical role, panelists say. Several characterize their relationship with suppliers as a true partnership. Many cite such collaboration as essential to success in the watch business. “It’s absolutely a partnership,” asserts Marks, emphasizing the necessity of supplier support in advertising, merchandising, repairs, and deliveries. “My suppliers have got to do for me what I do for my customers.”
Rysman observes that the watch business is “a fashion business,” and he relies on the watch companies for guidance on which styles are “in” and “out.” The companies, he says, “have a better feel for that market than I do.”
Many jewelers say that high-end watch companies have helped them to compete by limiting distribution of their products. Several specifically mention Rolex’s stricter policy, adopted by the company a few years ago. “We increased the number of Rolex products [carried in the store], they reduced the number of Rolex dealers, and we sold more Rolexes.
Since then, we’ve been very happy,” says Rysman. Since Rolex put its new policy into effect, “we have a totally different relationship with the salesman; he’s extremely supportive and helpful,” he says.
Richard Kern of Churchill’s Jewelers in Santa Barbara, Calif., who recently added the Roven Dino line, says he investigated more than 10 suppliers before making his selection. Company support was a main factor in his decision, he says: “good service from the company, a good cooperative advertising plan, [the ability to obtain] the watch overnight if we don’t have it in stock, a good warranty, and excellent product quality.”
Setting standards. Most respondents say that customers’ requests for discounts have an effect on their business, but many of the successful jewelers limit their discounting and praise suppliers who do not distribute to price-cutting outlets.
Rysman notes that competition from stores that heavily discount adversely affects the jeweler’s efforts “to build equity in the brand’s name.” He explains that his marketing objective is “to build up some desire in the watch, [but] I can’t do that if the watch is everywhere.”
“We talk about service and the quality of our store; we don’t talk about discounting,” says Marks. He adds that it’s better for him to sell one watch at “the profit that we need to make to stay in business” than to sell two watches at a smaller margin but acknowledges that “in a good market, you can take that attitude.”
Ticked off. Of course, some jewelers are disenchanted with the watch business, and many in this vocal minority say discounting is a prime reason. Of the questionnaire respondents, 12% say they don’t stock watches at all; 7% report that they gave up watches and are glad they did; and 37% say that although they carry watches, they consider the product “a necessary evil.”
“If you don’t make any money on them, why carry them?” says Frank Molteni of D.B. Ryland & Co. Inc. in Bristol, Va. Molteni cites competition from outlets such as Kmart, Wal-Mart, and Sam’s Club for lines like Bulova and Seiko.
Warren Hyman of Warren Jewelers Inc. in New Britain, Conn., reports that 27% of his sales came from watches last year. But he adds that he achieved this impressive figure from a major closeout sale and is sharply reducing his watch inventory. “I find it very saddening,” he says, noting that competition from discount stores is intolerable. “Everybody and their brother sells watches.”
“The watch business is not as satisfying as it used to be,” laments Mark Fandel of Tobin Jewelers in Springfield, Ill., who says he is “taking a break from watches for a while.” Fandel also blames competition from large discount stores, saying it is difficult for small independents to compete.
Fandel acknowledges that he has lost some customers because of his decision to phase out watches. Obviously, he notes, when shoppers want a watch, “you can’t talk them into something else.” However, he says his business is up 10.1% for the year without watches. “This lets us put money in platinum and other things.”
A good fix. While many jewelers say that watch repairs cause misunderstandings – several used the word “headache” – others credit repairs as a factor in their success. Marks says his store does many repairs itself. “We’re fortunate that we have some excellent watch technicians. It’s quicker for us to repair [a watch] ourselves than to wrap it, ship it [to the manufacturer], and inconvenience our customers.”
Some report a lack of customer awareness of the limitations of high-end products. “We tell them, ‘You have to take care of this watch because it’s gold; it won’t hold up under everyday wear,’” says Moleni. “But the customer who spends $3,000 doesn’t want to hear that.”
Engineer, on the other hand, says watch repairs, like watch sales, bring business to his store: “We take in repairs and make customers out of those who brought them in.”
Research assistance for this article was provided by Assistant Editor Barbara Wenger.
Watches Are a Timely Product
Percentage of Retail Panelists agreeing with the following statements. (Panelists were asked to check all statements that applied.)
|Statement||% of respondents agreeing|
|“I stock watches because they attract new customers to the store.”||60|
|“I stock watches because they are profitable items.”||40|
|“I stock watches because they add prestige to my store.”||39|
|“I stock watches but consider them a necessary evil.”||37|
|“I stock watches so I can make use of suppliers’ co-op ad dollars.”||21|
|“There are so many brands on the market today, I don’t know which ones to stock.”||13|
|“At one time, I nearly discontinued watches, but now they’ve become an important part of my business.”||8.6|
|“I gave up watches, and I’m glad I did.”||7|
|Source: JCK questionnaire mailed in April 1998 to 409 retail jewelers throughout the United States. Responses: 140. Response rate: 34%.|
Popular Watch Lines
Brands carried by independent jewelers who are on JCK’s Retail Panel
|Manufacturer||% of respondents carrying|