[Isthmus]

Here is a very interesting article written by Ariel Adams over at aBlogToRead.com. The article explains the recent moves in the watch industry toward consolidation of retail channels by manufacturers, why more and more major brands are dumping long time authorized dealers, and the rise of manufacturer-owned brand specific boutiques. It ios a great read and while it is intended to address this phenomenon across the entire watch industry, it might help shed some light on the new push by Seiko to open boutiques in major markets, and why over the past couple of years, some major retailers have stopped carrying the brand. Check out the article and chime in with your thoughts:

DOOMSDAY COMING FOR WRIST WATCH RETAILERS?

 

[clockworks]

We have one independent in Cornwall, selling Rolex, Breitling, Omega and Cartier, plus a chain selling TAG, Longines and Gucci. That's it, 2 shops in our only city, nothing else for 70 miles that sells anything with upmarket pretensions.
I can't imagine that we'll get any boutiques down here.
AFAIK, the situation isn't much better in Devon. Although there are 2 cities, they only have one or 2 decent watch shops each.

 

[LUW]

I read that last week. It was only a matter of time before big brands start direct sales to consumers, it's inevitable - if you can't win over your enemy, join them.

 

[minidriver]

They are also doing this to get a better grip of the grey market, which is their absolute nemesis. By having factory sanctioned "boutiques" manufacturers have better control of product flow/inventory, pricing and retail channel availability.

While this is a clear forward moving strategy, I don't see the industry being able to implement it overnight. Obviously, the Swiss are much more aggressive at it than the Japanese.

For example, my local Ananta AD tells me that Seiko is keeping very tight grips on every watch they produce and make available to ADs. For instance, he can only order 1 (max 2) of each model and he has to follow a very strict re-ordering schedule. Seiko requires him to keep 10 watches on his floor plan (Nearly $30K worth of inventory) for them to be granted the official Ananta AD recognition. As you can see the manufacturers have quite a bit of burden in order to ensure that their ADs are not stabbing them on the back. Having full factory control over the retailing channel can go a long way in eliminating much of the problems the industry faces, being the grey market their number one target.

 

[Isthmus]

I agree with you if you are talking about the high end of the market. But I disagree as it applies to the rest of their products. Lets face it, watches are for the most part commodities these days, and money is made (at least by the large manufacturers) by running it as a volume business. Is catalogs are anything to go by, the bulk of production from most manufacturers is not made up of high end models, but rather of relatively inexpensive volume/fashion models. I just don't see a way that most large watch companies can move enough volume through a boutique model if they are trying to sell anything other than high end models.

Maybe I'm wrong, but I just don't see seiko applying the boutique models much beyond GS, Credor, Ananta and the higher end seiko branded models. I don't see seiko giving boutique space to any lorus, pulsar, spoon, AKA, Alba, Nina Ricci, or even lower priced seiko branded products.

 

[minidriver]

Yes, but remember that Seiko is making a concerted effort to move upmarket. Sure, that doesn't mean they are going to abandon their bread and butter volume market overnight because they do make quite a bit of profit from it, but it is a clear strategic direction they are following.

If you peruse the Seiko Paris Boutique website, they do sell quite a bit of under $500 Seiko watches and most of them export models like we get here in the US. So the idea of Seiko even moving affordable, non-premium level product into boutique shelves may not be too far fetched off.

I agree with you if you are talking about the high end of the market. But I disagree as it applies to the rest of their products. Lets face it, watches are for the most part commodities these days, and money is made (at least by the large manufacturers) by running it as a volume business. Is catalogs are anything to go by, the bulk of production from most manufacturers is not made up of high end models, but rather of relatively inexpensive volume/fashion models. I just don't see a way that most large watch companies can move enough volume through a boutique model if they are trying to sell anything other than high end models.

Maybe I'm wrong, but I just don't see seiko applying the boutique models much beyond GS, Credor, Ananta and the higher end seiko branded models. I don't see seiko giving boutique space to any lorus, pulsar, spoon, AKA, Alba, Nina Ricci, or even lower priced seiko branded products.

 

[Isthmus]

Yes, but to use the same example, France is a big country. A single Seiko boutique in paris will not do much for spreading product around france or the rest of the EU for that matter. Unless Seiko is commited to opening boutiques in many other markets and cities (even if it is only to display their products while they sell online), I just don't see them abandoning the Ad network in any major way - reducing it, yes, but abandoning it, no.

 

[LUW]

Don't forget that every brand has to make their name known, and can't only depend on the money from watch enthusiasts, specially the brands that sell in big volumes, like Seiko, Tissot, Orient, etc. Unless, of course, they invest seriously in publicity.