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Discussion Starter #1 (Edited)
The new Prospex LX line all have a MSRP of $5500 or above(e.g. SNR029), a presage with a spring drive is priced at $4500 (SNR039), and an automatic enamel dial presage (non-limited edition) costs over $3000 (SJE077). What the heck is Seiko thinking?

Like many others, I'm a bit baffled by Seiko's new pricing model to say so in the least. It almost feels like a betrayal to see a much-loved brand start to price itself out of reach for some of its most loyal fans. Yet, I strangely empathize with Seiko's upmarket push because at the end of the day, it's not personal; it's just business.

The Economics

There's a saying in economics: "there's no such thing as a free lunch." We watch enthusiasts have long been spoiled by Seiko's remarkable value proposition. Essentially every Seiko under $1000 punches well above its price point with an entirely in-house movement from a brand full of history with a quality that easily surpasses mid-tier watches in the low thousands. That amazing value has a cost for the company, and for the longest time, Seiko has been able to offset that cost by appealing to the standard department store consumer to sell these watches in high volume. While the layperson might have known nothing about Seiko aside from the name brand, watch hobbyists, which probably make up less than one percent of the population, knew how special that SARB, SKX, etc. is.

In 2019, Seiko publicly admitted that they were trying to move upmarket, citing declining sales in department stores and increased competition from smart watches as well as microbrands. Without the volume to justify selling something like the SKX007--an ISO 6425 certified, fully in-house automatic watch--for under $200, Seiko had to move upmarket. It simply does not have a choice except to sell more expensive watches at lower volume to balance its budget sheet.

The Psychology

Like most people, if I somehow found $5000 in my couch, I would most likely be eyeing something Swiss-made, like a Tudor BB 58 or a used Rolex Explorer/Datejust. Blowing $5k on a Seiko (not Grand Seiko) would not even cross my mind because it's just a Seiko after all. It's common knowledge that Seiko has a brand image issue. Seiko managed to disrupt and almost usurp an entire industry in the 70's by providing cheap, cost-efficient watches, but that same association is preventing them from moving upmarket. Seiko simply lacks the same prestige.

In psychology, there is a phenomenon known as cognitive dissonance. It refers to the fact that people will try to rationalize their actions by usually inflating the value of whatever they're doing. For example, a person may justify staying in a harmful relationship simply because of how much time, energy, and money they've already invested in the relationship. They have a subconscious need to justify why they're in the relationship or else it would prove that they've wasted their time--something that all of us might have felt at some point.This is how many luxury watch brands are able to charge exorbitant prices for a technically obsolete tool, and many consumers (including myself) are perfectly happy buying these devices.

On one hand, brands like Rolex are a masterclass at manipulating this feeling. By underproducing desirable models and driving up demand, Rolex essentially amplifies cognitive dissonance. Anyone that wants a Submariner or (heavens forbid) a Daytona, will have to "prove" their loyalty to the brand either by waiting extremely long periods or time and/or purchasing less popular models to first, thus making the consumer invest even more time and money into obtaining their desired watch. Combine this with effective marketing and endorsement, it's undeniable that Rolex's acumen at manipulating the market is second to none.

On the other hand, very few people are willing to buy an expensive Seiko because there are already so many good, affordable model from the same brand that offer 95% of the value for 20% of the price. It would be like Rolex charging $1000 for a Submariner for decades only to suddenly raise the price to $10000 within a year by offering a few improvements. Consumers just won't bite into the proverbial cake, and cognitive dissonance won't trigger because the standard has already been set. Seiko is supposed to be cheap, not prestigious.

The Marketing

The following Seiko Presage SJE075 costs over $3000
sje075.jpg

It comes with an enamel dial, updated movement, sapphire crystal, a crocodile strap, and possibly better polishing than this Seiko Presage SARX027 for under $1000:
SARX027_5-400x400.jpg
*Actually this also has sapphire and an enamel dial

There are 99 grievances about Seiko's marketing, and pricing is number one. Again, I understand the necessity and desire to push upmarket, but it really does not take a marketing expert to see that consumers may not want to pay 3x the price for relatively few improvements. Because there are so many comparable, better buys from Seiko, consumers don't end up with cognitive dissonance. Rather, it simply turns into buyer's remorse if they make the purchase at all!

Lastly, there is the issue of Grand Seiko (and by extension Credor, etc). In the Japanese market, Seiko may be a prestigious brand that requires little market segmentation and individual demarcation, but the international market is vastly different. There is a reason why the Volkswagen conglomerate would never let the Bugatti name be tainted by the the word Volkswagen (which literally translates to people's car). Much of the world do not want their luxury items to bear the same name and logo as something 1/10 of the cost, as that is pretty much the antithesis of luxury. However, Seiko still appears to be impeding into same area as Grand Seiko, which has been much beloved by enthusiasts for producing quality parallel to the holy trinity. This confounding lack of brand identity is a bitter turn off for all parties because it creates a lot of confusion for both new and old customers alike, resulting in an overload of options that clash with each other.

Conclusion

I am an avid Seiko fan, and I have a dislike for Rolex's market manipulation, even when I hypocritically find the submariner to be stunning. I believe that, with its extensive history and sheer quality, Seiko deserves a place on the pedestal up there with the best of Swiss watchmaking in terms of prestige and pedigree. I look forward to the day when I hear about the next Bond or celebrity sporting a Marinemaster 300 instead of a Omega or Rolex. And I will truly shed tears when the phrase it's just a Seiko has been said for the last time.

I can only speak for myself when I say that I have no issue paying significantly more for a high quality Seiko, if that were the only choice. Instead, I am bombarded with reasons to doubt my potential big purchase from Seiko because of other models that still exist within its own catalog, or potentially better models from its big brother, Grand Seiko. That's why I'm not surprised to hear murmurs of Seiko slowly fading out its cheaper watches, but I'm not sure such a move is competent without proper brand segmentation. At the end of the day, I empathize with Seiko's desire and need to be a luxury brand, but their current trajectory places them in a lose-lose scenario where neither enthusiast nor newcomers to the brand will be satisfied. I can only hope I'm wrong in that regard.
 

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Many companies that used to be the "brand for the masses" did similar and tried to become luxury brands, chasing those enticing high margins. Many failed in spectacular fashion. It's a tricky feat to pull off.

There will always be people who have more money than they know what to do with that will buy these things. But with unemployment ramping up worldwide due to coronavirus and other factors, large portions of the population don't have the money to spend anymore on these items, nor the desire. Priorities change and people remain cautious for a long time. I don't believe now is the time for companies to be coming out with new, premium, and overly expensive luxury items. It's kind of tone deaf to what's happening in the rest of the world. It's going to be interesting to see how luxury brands in general fare over the next couple of years. Just my opinion.
 

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Discussion Starter #3
Many companies that used to be the "brand for the masses" did similar and tried to become luxury brands, chasing those enticing high margins. Many failed in spectacular fashion. It's a tricky feat to pull off.

There will always be people who have more money than they know what to do with that will buy these things. But with unemployment ramping up worldwide due to coronavirus and other factors, large portions of the population don't have the money to spend anymore on these items, nor the desire. Priorities change and people remain cautious for a long time. I don't believe now is the time for companies to be coming out with new, premium, and overly expensive luxury items. It's kind of tone deaf to what's happening in the rest of the world. It's going to be interesting to see how luxury brands in general fare over the next couple of years. Just my opinion.
I highly agree. Covid19 will potentially rewrite the rules of luxury items for a while. Some analyst say that since luxury-based experiences (Ie. travel & vacations) have been crippled, the luxury material market may reap the benefits. However, It's kind of unfortunate and insensitive for Seiko to still be pushing forwards with new, expensive releases, but I don't know if I can fault them exclusively for that, since they're not alone in doing so. Regardless, it'll be interesting to see how the luxury market and different non-essential sectors as a whole manage the next few years.
 

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I highly agree. Covid19 will potentially rewrite the rules of luxury items for a while. Some analyst say that since luxury-based experiences (Ie. travel & vacations) have been crippled, the luxury material market may reap the benefits. However, It's kind of unfortunate and insensitive for Seiko to still be pushing forwards with new, expensive releases, but I don't know if I can fault them exclusively for that, since they're not alone in doing so. Regardless, it'll be interesting to see how the luxury market and different non-essential sectors as a whole manage the next few years.
(y) I was talking to my financial advisor this week and mentioned Neiman Marcus - only eight weeks in and they had to declare bankruptcy - obviously they weren't in a good financial position to begin with but you wonder how healthy some of their peers are. We're about to find out.
 

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This is a Brilliant essay! Congratulations on achieving much for your forth post. I’m grading my university class’s finals now and you would get a solid “A”.

I too have studied Seikos move upmarket, perhaps not to the extent you have, and it does make sense. The largest watch producer in the world is Apple and it’s a crowded market area.

Seikos purchase of Orient makes an intelligent play for their sub $500 market. I see most of Seiko moving out of this market, other than the Seiko 5 line and their quartz offerings.

Good discussion!


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I think Seiko is acknowledging that ALL watches have become luxury products, because the market created by functional need for watches has evaporated. A whole generation has already been born that feels as naked without their phones as their parents did without a watch on their wrist. No longer a commodity item, the wristwatch has become a poor product to base a business model on unless it is explicitly marketed as a luxury item.
 

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I think Seiko is acknowledging that ALL watches have become luxury products, because the market created by functional need for watches has evaporated. A whole generation has already been born that feels as naked without their phones as their parents did without a watch on their wrist. No longer a commodity item, the wristwatch has become a poor product to base a business model on unless it is explicitly marketed as a luxury item.
So essentially Seiko is doing now what Rolex had to do decades ago. Except it's not a Quartz crisis that's driving them in that direction but as you said "functional need for watches has evaparated". When it comes to the general consumer ( the other 99% that matters to Seiko) Seiko isn't usually the first or the fifth choice when it comes to marking a special ocassion or having any association with social prestige. It's really still "just a Seiko" no matter the price tag.

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A number of you make the most important point here - watches are seen by the vast majority of consumers as an unnecessary luxury item (I think it was A Blog to Watch that called them "functional jewelry"), if they are seen at all. I work in a decidedly middle class workplace (I'm a public school teacher) and no one has ever noticed or asked about any of my vintage watches, but I hear lots of conversations about the Apple Watches that the vast majority of my colleagues are wearing. One actually ended a conversation with me about a watch (I was all excited about getting a shiny new 39 jewel Seikomatic) by saying "for that kind of money you could/should have purchased an Apple Watch!"

Since the start of their (necessary) upmarket push, I've been thinking that they have made a mistake in branding, at least in the U.S. market - they should have followed the example set by Toyota when they introduced Lexus. A Toyota LS400 would have just been an expensive Toyota in the eyes of the U.S. market (I can't speak to European attitudes- they have always seemed more snooty about Japanese luxury), not the genesis of a whole new way of viewing luxury cars that scared the crap out of the Germans. Anything with the name "Seiko" in its title (including Grand Seiko), no matter how well-engineered, designed, & finished, will just be seen as an "expensive Seiko" by a lot of consumers that can afford them and are necessary for their survival.

One of things I like about the Japanese corporate ethos starting in the 1960's was the idea that one could/should build high quality products at a price that normal people could afford (not just "good enough" for the price). I really wish Seiko would continue to stay well within my price range (come on, just one Spring Drive model for under $1000 - I know you can...), but I and they know that it is not a sustainable business model. It's too bad to see them chasing the Swiss again instead of scaring the crap out of them like they did in the 1970's.
 

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I really wish Seiko would continue to stay well within my price range (come on, just one Spring Drive model for under $1000 - I know you can...), but I and they know that it is not a sustainable business model. It's too bad to see them chasing the Swiss again instead of scaring the crap out of them like they did in the 1970's.
They would never make a spring drive under $1000 or it would simply take away from their far more expensive offerings.

They apparently frightened the Swiss in the 1970's but then what did they do?

Shut down Grand Seiko, did away with their higher quality mechanical movements and pursued quartz.

Rolex stuck to mechanical movements with just a very brief foray into an Oysterquartz and when the dust settled and accurate quartz watches were being sold in petrol stations for cheap I guess it became obvious to Seiko that they had backed the wrong horse if they wanted to go upmarket.

They have been pushing upmarket for many years (it takes a very long time to build a space in the luxury market) but their expensive models still haven't got the cachet amongst ordinary folk that they would like.

FWIW the huge conglomerate that is Seiko watch division is bigger than the whole of the Swiss watch industry so it's obviously not about finances, just business.
 

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FWIW the huge conglomerate that is Seiko watch division is bigger than the whole of the Swiss watch industry so it's obviously not about finances, just business.
Not that it changes your point very much, but do you have some numbers to back that statement up? It doesn’t track in my mind.
You bemoan the move downmarket in the early 80s, but I think there were some outside (global) extenuating circumstances (like a too strong yen) that hurt Seiko’s ability to keep making the level of quality they were capable of, to have a place in the global market they had firmly established themselves in. That is how I’ve come to peace with their shift in focus around that time.
 

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A number of you make the most important point here - watches are seen by the vast majority of consumers as an unnecessary luxury item (I think it was A Blog to Watch that called them "functional jewelry"), if they are seen at all. I work in a decidedly middle class workplace (I'm a public school teacher) and no one has ever noticed or asked about any of my vintage watches, but I hear lots of conversations about the Apple Watches that the vast majority of my colleagues are wearing. One actually ended a conversation with me about a watch (I was all excited about getting a shiny new 39 jewel Seikomatic) by saying "for that kind of money you could/should have purchased an Apple Watch!"

Since the start of their (necessary) upmarket push, I've been thinking that they have made a mistake in branding, at least in the U.S. market - they should have followed the example set by Toyota when they introduced Lexus. A Toyota LS400 would have just been an expensive Toyota in the eyes of the U.S. market (I can't speak to European attitudes- they have always seemed more snooty about Japanese luxury), not the genesis of a whole new way of viewing luxury cars that scared the crap out of the Germans. Anything with the name "Seiko" in its title (including Grand Seiko), no matter how well-engineered, designed, & finished, will just be seen as an "expensive Seiko" by a lot of consumers that can afford them and are necessary for their survival.

One of things I like about the Japanese corporate ethos starting in the 1960's was the idea that one could/should build high quality products at a price that normal people could afford (not just "good enough" for the price). I really wish Seiko would continue to stay well within my price range (come on, just one Spring Drive model for under $1000 - I know you can...), but I and they know that it is not a sustainable business model. It's too bad to see them chasing the Swiss again instead of scaring the crap out of them like they did in the 1970's.
Agreed, Seiko's recent upmarket push without the value has put off many of the loyalists. One only needs to look their new Alpinist offerings at US$750, compared to the SARB017.
 

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So essentially Seiko is doing now what Rolex had to do decades ago. Except it's not a Quartz crisis that's driving them in that direction but as you said "functional need for watches has evaparated". When it comes to the general consumer ( the other 99% that matters to Seiko) Seiko isn't usually the first or the fifth choice when it comes to marking a special ocassion or having any association with social prestige. It's really still "just a Seiko" no matter the price tag.

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I mean discontinuing one of their most beloved models, the SARB017 and the SARB033/035 is one thing, but discontinuing their most iconic watches, maybe even one of the most iconic watches of all time, the SKX's, just to replace it with a cheaper to produce Seiko 5 alternative is outright mocking with us, the watch community. The new SKX replacement has a better movement in it than the SKX did but it lost ISO certification and 200m WR and jumped a TON in price.
 

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IMHO, given the state of the current world economic crisis, Seiko picked the worst possible time to move up market. Good luck to them. The prices for Rolex sports watches have been through the roof in the last 12 - 18 months and I think that bubble has burst and a market correction is underway. Only time will tell.

I am all about value for dollar and Seiko has been one of the best at delivering this formula to the public. I think the trick for Seiko will be finding out how far they can actually go up market and still maintain or improve their sales margins and overall profit.
 

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I mean discontinuing one of their most beloved models, the SARB017 and the SARB033/035 is one thing, but discontinuing their most iconic watches, maybe even one of the most iconic watches of all time, the SKX's, just to replace it with a cheaper to produce Seiko 5 alternative is outright mocking with us, the watch community. The new SKX replacement has a better movement in it than the SKX did but it lost ISO certification and 200m WR and jumped a TON in price.
Was there ever an official Seiko documentation stating that the SKX was ISO certified? I was with the impression that Seiko/Japan had their own standards that either meets or surpasses the ISO certifications.

I'm sure the same could've been said about the 6309 line up that sold millions for a decade(1977-1988) while the SKX had a good run for well over 2 decades. It's fair to say that it was bound to happen sooner or later or that it was simply upgraded with the new turtle line up which has proven to be equally popular.

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Was there ever an official Seiko documentation stating that the SKX was ISO certified? I was with the impression that Seiko/Japan had their own standards that either meets or surpasses the ISO certifications.

I'm sure the same could've been said about the 6309 line up that sold millions for a decade(1977-1988) while the SKX had a good run for well over 2 decades. It's fair to say that it was bound to happen sooner or later or that it was simply upgraded with the new turtle line up which has proven to be equally popular.

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Yes, I agree, and I think the criticism comes from a place of disappointment from the Seiko enthusiasts, who see Swiss brands like Tissot and Hamilton offering more value at US$500-mark. Esp with ETA movements.
 

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Yep we've read and said it. Old school memory lane guys don't like the direction Seiko corporate is going but give them credit they state it clearly and often so no one should be surprised.
 

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Yep we've read and said it. Old school memory lane guys don't like the direction Seiko corporate is going but give them credit they state it clearly and often so no one should be surprised.
Yeah fair enough. I mean I do get that selling the Sarb033 and 035 in 2020 for $300-400 is maybe too good of a deal, still Seiko's competition is stepping up. Orient is the new Seiko now.

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Discussion Starter #18
One actually ended a conversation with me about a watch (I was all excited about getting a shiny new 39 jewel Seikomatic) by saying "for that kind of money you could/should have purchased an Apple Watch!"

One of things I like about the Japanese corporate ethos starting in the 1960's was the idea that one could/should build high quality products at a price that normal people could afford (not just "good enough" for the price). I really wish Seiko would continue to stay well within my price range (come on, just one Spring Drive model for under $1000 - I know you can...), but I and they know that it is not a sustainable business model. It's too bad to see them chasing the Swiss again instead of scaring the crap out of them like they did in the 1970's.
I completely empathize with you about the Apple watch conversation. Around my non-WIS friends, I heavily downplay (Ie. lie) the price of my timepieces to avoid baffled and sometimes condescending looks of shock.

And it truly is so strange that Toyota, a car company, better grasped the concept of branding than Seiko, a functional luxury brand. As for a Spring Drive for under $1000, you might be able to get that, especially with some of the older GS models that still has Seiko on the dial, given how the current economy is going. Keep your eyes alert, my friend.
 

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I completely empathize with you about the Apple watch conversation. Around my non-WIS friends, I heavily downplay (Ie. lie) the price of my timepieces to avoid baffled and sometimes condescending looks of shock.

And it truly is so strange that Toyota, a car company, better grasped the concept of branding than Seiko, a functional luxury brand. As for a Spring Drive for under $1000, you might be able to get that, especially with some of the older GS models that still has Seiko on the dial, given how the current economy is going. Keep your eyes alert, my friend.
Good point! Like you, I usually don't talk about the price points of my watches around non-enthusiasts. I really don't understand how people justify buying Apple watches (quite expensive for their longevity) while looking down on people who pay the same for watches that last decades.

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