Jewelers looking to add a new watch line should ask themselves the following questions before selecting a brand.
Will adding a new brand increase or cannibalize existing business? Adding a brand should increase total business and bring in new customers, not replace sales of an existing brand. The new brand can be in the same category as a current brand, since it helps increase awareness of that category, but it shouldn’t have the same look, price points, and target customers.
Excessive assortment is also a danger. Too much choice can confuse customers, result in slow-turning inventory, and erode vendor relations. Brands and retailers should agree on how much business is expected. A vendor that sees business declining at one store and growing elsewhere might suspect overassortment as a cause and seek different doors. The reverse holds true for a retailer; if a watch brand opens too many doors in a market, no single retailer there can do substantial business with it.
What is the image of the watch brand? It’s important for a brand’s image to coincide with the store’s and blend with existing product. If a retailer introduces a brand that increases sales but lowers the store’s image, the short-term sales may not be worth the long-term effect. Look at the brand’s distribution channels, price points, advertising, history, and originality to determine its image in the marketplace. A brand with slower-than-expected sales still may be valuable if association with it is important to the retailer’s image.
How much space is available to allocate to a new brand? Proper presentation is key to a brand’s success. A retailer without enough space—or the capital to finance inventory and consistent reorders—shouldn’t accept the brand. About 4 linear feet of showcase space is the minimum needed to house a brand, although jewelers usually allocate between 4 and 10 feet, depending on the brand. Make sure a new brand doesn’t detract from existing well-performing products.
A retailer should expect at least a onetime turn over a 12-month period. Consistently reordering best sellers is a must, but just-in-time ordering, increasingly popular for jewelry, doesn’t always allow a retailer to accurately represent and convey the spirit and essence of a brand. In addition, it’s often difficult to obtain new pieces in a short time because of the complexity of the product.
Do you trust the company behind the watch brand? It’s essential to investigate the brand’s reputation. Ask the brand’s representative pointed questions about distribution, after-sale, and customer service policies, as well as the type of marketing support they provide. You must also be comfortable working within the brand’s retailer policy.
It’s also important to understand how the brand is doing in various markets, so talk to three to four retailers in different parts of the country. Ask the brand for retailer references, and ask those retailers for additional retailer references.
How important is your store to the watch brand? Both brand and retailer must believe they’re doing their fair share of business and that it’s profitable for both. It’s key for a retailer to be important to a brand’s overall business. A traditional jewelry store with too many brands (as opposed to a watch specialist) cannot build solid relationships with vendors. If a retailer and a brand cannot agree on an investment level they’re both comfortable with, they shouldn’t be working together.