Tardy Deliveries Plague Retailers
Watch retailers and their customers are growing impatient with back-ordered product that can take up to a year to arrive. With increasing frequency, many watch manufacturers are failing to deliver when promised, frustrating jewelers and consumers alike.
Retailers will wait patiently if the product is impressive, recognizing that because watches filter down from manufacturer to distributor to retailer, orders can get backed up easily. But the delays are getting worse, and sometimes companies even advertise product they haven’t delivered yet. “Brands are building demand with a prototype, then they don’t deliver for a long time,” says one source. “We’re not building space rockets here; it’s a wristwatch.”
Luxury watches cause the longest delays. The more unique the product, the greater chance of late delivery. Popularity slows delivery, as well. Demand for the Tank Française, the Tiger Tudor, the Kirium, and the Catwalk far exceed their availability. While retailers at least can understand the delay for popular makes, they also wonder whether manufacturers are being overly cautious by not producing enough watches.
Some retailers believe back orders are mounting because money is tight, with many American distributors purposely keeping their inventories low so their out-of-pocket investment is low, too. Back-order problems are also common in the jewelry category, they say.
Leon Adams of New York-based Cellini says he may add a conditional statement to his purchasing contracts stipulating that he will refuse to accept merchandise if not delivered by Nov. 15. He says sometimes watch distributors promise merchandise by the winter holiday season but don’t deliver complicated timepieces until January or February.
When delays are unavoidable. Retailers should understand that manufacturing watches involves built-in delays, a cycle of trial and error before the watch is approved for launch. Cautious watch companies produce prototype models for the Switzerland watch fairs to gauge interest and to guarantee orders before full-fledged production begins. That way they don’t waste time and investment on producing watches retailers won’t like; the result, however, is delay in delivery of the final product. Throw in potential production problems and delays are even more likely. Like luxury car manufacturers, watch companies don’t want to ship product until it’s “perfect.”
Back orders are part of a political game, too. The best markets get first dibs on new product – fortunately, the United States ranks high on that list. Also, retailers who pay their bills on time will experience fewer back-order problems and fewer problems in general, sources say. Likewise, retailers are better off if they order from U.S. distributors who pay their import bills (to the manufacturer) in a timely manner. If bills aren’t paid, delays occur.
“There’s a higher probability that retailers will get faster delivery on more exclusive pieces if their payments are up-to-date,” hints Mark Wasserman, president of Oris USA.
Watch companies that own their own distributorships may have fewer delays because of less red tape. If there are delays, a popular model is likely to be the cause.
Shipping costs are another touchy issue. When back orders arrive at stores piecemeal – two or three watches at a time – retailers are often left paying the tab. “It’s the equivalent of a restaurant bringing out the potato, then the steak, then the green beans,” says Howard
Kaplan, president of Henry Kay Jewelers in Chicago. “More companies are shipping it as they get it instead of as complete orders.
“If companies don’t have the items available in the initial shipment, it’s not our fault,” Kaplan adds. “So why charge us postage for each subsequent shipment? I don’t think they realize how important it is to send us the complete order the first time.”
Kaplan says postage for back orders can cost between $2,000 and $3,000 per year. He suggests retailers demand that watch companies pay the postage on overdue product.
Tom Tivol, president of Tivol Jewelers in Kansas City, Mo., looks on the bright side. Back orders are a nuisance but also a benefit, he says. Retailers can use back-order situations to maintain customer loyalty if they target what’s special about the particular watch. Tivol advises romancing the situation.
“You don’t want to use the term ‘back order’ with a consumer because it reduces the watch to a wrench,” Tivol says. “You should say, ‘The watch is highly in demand, and it will be available for you in about 10 months. This will be a glorious piece of jewelry for you to have.’ ”
Oakley Launches Watches
Oakley, the maker of prestige sunglasses, has dropped a time bomb on the watch industry, namely a new watch line. Oakley aims to be a player with upscale titanium timepieces retailing for $1,500 that boast several trademarked technological features.
With their unique ellipse design, the watches are housed in a sculptural “X Metal” casing and showcase a trademarked “Inertial Generator” that fuels electromagnetic induction with the torque of a precision flying wheel mechanism, called the “O engine.” The induced voltage powers the chronometer with quartz precision, aided by wrist movement. Four different dials enhance the unique design: white, black, titanium, and carbon fiber. For early 1999, the brand ushered in a new stainless-steel version.
With watches, the manufacturer of optics, footwear, and other accessories enters its fourth dimension. Overall, Oakley owns more than 350 patents, including the new patents for watches. The Oakley corporation has hefty funds for advertising its watches. The public company’s overall net sales for 1997, the most recent year for which figures are available, were nearly $194 million.
Will the company eventually be forced to sell lower-priced watches to boost sales volume, as Tag Heuer has had to do? Time will tell.
One thing’s for sure: The word on Oakley watches will reach the mainstream public quickly. The Foothill Ranch, Calif., company needs no help in pitching its name. With endorsers such as Michael Jordan (who attended the watch launch at New York’s Tourneau Time Machine) and Dennis Rodman, the brand has a good shot to make a lot of noise in the watch game.
Ebel Changes Personality
Ebel enters a new era with a new president – Dennis Phillips from Rado, another Swiss watch company (JCK, December 1998, p. 46) – and a new advertising campaign. The brand, which has called itself the “Architects of Time,” has quietly capitalized on its upscale image for many years with conservative ads. Now it’s looking to celebrities Madonna and Harrison Ford. More specifically, it’s looking to their hands, as these striking ads show. They’re part of an effort to make Ebel watches seem like an extension of the wearer’s personality.
Cartier Celebrates Santos Anniversary
In 1978, Cartier introduced the Santos watch in honor of Brazilian Alberto Santos-Dumont, a socialite, an aviator, and one of the first prominent men to embrace wristwatches in the early 1900s. For the 20th anniversary of the watch, Cartier celebrated with a spectacular event in Paris. The party, for retailers around the globe, took place in a hangar that showcased a Santos-Dumont special exhibition, including one of his planes.
Before Santos-Dumont, wristwatches were considered feminine. But when the Brazilian complained that it was clumsy “to pull one’s watch from one’s waistcoat pocket while holding the controls of the plane,” Louis Cartier responded by offering him a small timepiece fastened to the wrist by a simple leather strap.
Enhanced with a metal bracelet ornamented by flat screws, today’s Santos resembles the original watch worn at the beginning of the century by Santos-Dumont. Just three years after the collection’s launch in 1978, Cartier sold 200,000 Santos watches worldwide. Today, more than 800,000 have been sold.