Message to watch companies: Retailers and consumers love your products, but they’re overwhelmed by the options. Retailers complain that, amid all the excitement of new introductions and new brands, watch companies are drowning their showcases in a confusing, cluttered sea of sameness.
Even some watch company executives admit they are overwhelmed with the sheer volume of watches in the market. And if they are confused, imagine how confused consumers are.
While some watch companies have streamlined their collections in recent years, others offer a little bit of everything for everybody. This has made merchandising, and the watch buyer’s job, more challenging.
“Watch companies need to narrow down their lines,” says Aida Alvarez, watch buyer for Coral Gables, Fla.-based Mayor’s Jewelers. “I always tell watch companies to K.I.S.S. me, meaning ‘Keep It Simple, Stupid.’ Some of these watch collections develop babies overnight.”
“And then they die,” adds Richard Smollen of London Jewelers in Glen Cove, N.Y., referring to watches that seemingly take up permanent residence in showcases, without selling.
Do retailers need to stock one watch with eight different dial colors in the same showcase? Do they need a six-foot display with 70 watches on it? Or would they rather showcase three versions of a best-seller in a custom display for a more inviting presentation?
Retailers and consumers respond well to small collections with identifiable names – Parsifal, Arctura, Royal Oak, Catwalk, and so forth. Baume & Mercier’s Catwalk watch, for instance, comes with three dial colors in either gold or stainless steel – period. This watch stands out in any showcase, especially within Baume & Mercier’s display specifically designed for the Catwalk series of watches.
What’s a “good representation”? It’s up to retailers to determine how many models and how many brands they will stock. Many watch companies are willing to tailor their collections specifically to a store’s needs. At the same time, retailers are expected to stock a good representation of a brand’s selection.
The interpretation of “good representation” is debatable, however. Some retailers feel forced to carry “loser” watches so they can get the “hot” watches. Many watch companies offer limited distribution as a trade-off and partial incentive for retailers to carry more of their lines. With exclusivity comes increased profit potential, so retailers are more likely to adhere to this strategy.
On the flip side, some retailers want select watch models only, which rarely serves the needs and goals of the watch brand. Give-and-take is where the retailer-vendor partnership is proved.
“It’s difficult to merchandise today,” concedes Michael Benavente, president of Longines USA. “It’s a double-edged sword between selection and potential clutter. But there can be a happy medium. Some of our retailers tailor our collection to their store. A retailer may only want to carry our aviator watches. As a buyer, it’s more challenging because you have to know what’s going to sell.”
Merchandising as art. With more shop-in-shop concepts (also known as watch corners) in retail stores today, merchandising is stepping to the forefront. Even retailers who don’t have a shop-in-shop strategy want attractive merchandising.
Retailers must be responsible for their own creative presentation. Overloading the showcase is ultimately their fault. After all, it’s their store.
“Merchandising is an art,” says Doron Basha, Philippe Charriol’s vice president of marketing and sales. “Retailers only have a limited amount of showcase space. You want to create a nice presentation without making it too crowded. If you don’t do it right, it can look like schlock.”
Today, less is more. Extensive brand selection takes a backseat to presentation and profit. Fallout within the watch category has led many retailers to reduce the number of watch vendors and watch models they deal with, resulting in fewer headaches and more profit. With the exception of watch specialty stores, they have also cut back the number of brands they carry to avoid showcase clutter and repetition. “Real estate is [the] most precious commodity,” says Howard Kaplan, owner of Chicago- based Henry Kay Jewelers.
Retailers are zeroing in on their best-performing watch lines with more passion and less tolerance for change. Because of this strategy, they are less ambitious to take on new lines. With more than 600 watch brands to choose from in the United States, some could be on a long waiting list for entry into retail stores.
Hold the parsley. A good rule of thumb is to get 80% of your sales from 20% of your inventory, according to Ilia Jagenburg, a former watch buyer for Fortunoff and Tourneau.
“We can do 90% of our business in 30% to 40% of our watch lines, so why take on more brands?” asks one retailer who wishes to remain anonymous. “We don’t need any more parsley in our showcases.”
“One of the focuses of major retailers is ‘gross margin return-on-investment’ [GMROI] – in terms of how they measure success of watch brands,” says Timothy W. Greene, vice president of sales and marketing for Rotary Watch Co. “And they are proving you can be successful with a fewer number of styles that drive the business.
“So you no longer need 75 watches in the showcase – a sort of supermarket of watches. You can do the same or more with a tight assortment of less models. Space is always an important issue for retailers.”
In department stores, showcase space is even more limited. But compared with other department store items, watches take up the smallest amount of showcase space per square foot, according to Ralph Gindi, president of Prime Time Watch Co., distributor of Hush Puppies, Halston, and Wolverine Wilderness watches. Gindi says it’s okay for retailers to scale back the number of models in the showcase, but at a certain point, a store will lose a trend with that strategy. Every year, there’s a shining star, he says.
“Customers want selection,” says Gindi. “People like to shop. In department stores, if endless licenses can survive in the clothing area, why can’t consumers have plenty of choices in watches and jewelry? People aren’t wearing one watch today; they are wearing several.”
Ring out the old. Retailers must be wary of overstocking. It could lead to watches sitting in showcases like non-paying tenants who can’t be evicted.
“It’s so important to keep your inventory fresh and new,” Smollen says. “But that can lead to too much inventory if you’re not careful.”
“If you want us to take the new, take back the old,” says Alvarez, whose chain of stores cut back from 23 watch lines to nine. “Some of the models watch companies want you to stock just sit in the showcases. We’re happy with nine lines. Any more than that and they start overlapping and looking like each other.”
But some retailers think that extensive selection is an asset. “Customers are more interested because of selection and choice,” says Ron Oppenheimer, owner of Paramus, N.J.-based Orologio, a watch specialist. “Carrying a selection of unique product gives customers a reason to shop in your store.”
One way to distinguish among many models in the showcase is countertop or in-case signage. Adjustable displays also are popular.
When it comes to displays, there’s much disparity between the low end and the high end. Citizen is trying to bridge that gap with lacquered maple displays and countertop signage that distinguish its core collections. The brand presents its watches mainly within a few families: Eco Drive, Signature Elegance, and Promaster. And it highlights them with vertical counter banners that clearly state the name of each collection.
“We have 450 models in our line, so retailers need a way to present the line clearly,” says Laurence Grunstein, president of Citizen Watch Co. of America. “We’ve helped them by creating focused collections within our line.”
That’s exactly what retailers want from watch vendors – focus. A little focus will go a long way for clearer merchandising presentations. And if all goes according to plan, consumers’ eyes will be wider in the watch department.