The good news about watches is that, despite the economic downturn, they're increasing as a percentage of overall sales for some 27 percent of National Jeweler's product panel members, and they are holding steady for yet another 48 percent, www.nationaljewelernetwork.com. reports.
According to other recent product panels, that is a larger percentage than those who cited gold jewelry sales as going up (11 percent) or who named diamond jewelry sales as being on the rise (24 percent).
Then, there's the bad news: Watch margins have slipped for about 30 percent of the product panelists and are flat for 58 percent.
Some jewelers say the increased availability of watches sold on the Internet, where gray-market timepieces often abound, has driven down their price points, as customers come in with printouts of watch prices found on the Web.
One development to watch: TAG Heuer recently began selling its watches online through two trusted retailers and it might expand the program to more.
Price points: Among those surveyed, the best-selling watches tended to be on the lower end, with a quarter of respondents citing $150 to $300 as the sweet spot. One problem cited by multiple respondents is online competition, particularly for jewelers with small watch departments: "With sites such as BlueDial.com and PrincetonWatches.com, customers come in to try watches on and see what styles they like best in person, then give us the quote from these Web sites and force us to match them," one jeweler pointed out.
One panelist cited an increase in consumers seeking finer Swiss-made watches, and another retailer said that since becoming a Rolex dealer, timepiece price points have skewed higher.
Advertising: In terms of advertising, methods ran the gamut, with jewelers citing newspaper ads, billboards and radio as effective methods. One online watch retailer cited diamond watches as a strong seller and also mentioned advertising on Facebook and through Google ads.
Selling: Several jewelers mentioned that these days, customers are using cell phones for telling time, but once in the store, watch customers can be dazzled with product knowledge: "The Internet has proven to drive prices down, but the consumer is more educated, and when we get an opportunity to sell, we usually win with our service," one jeweler said.
Another jeweler cautioned that watches should not just be added to showcases as an afterthought.
"Many retailers for years have been looking to only augment their jewelry sales," the jeweler said. "Today you need to present the watches as a valued product in your store."
According to National Jeweller, ultra-high-net-worth consumers have rated IWC the "Best of the Best" among 33 luxury watch brands, according to the Luxury Institute's 2009 Luxury Brand Status Index (LBSI) survey.
IWC was the top-ranking watch brand for three out of four components of the LBSI survey, which identifies the top brands that exhibit true luxury in numerous categories based solely on the independently verified ratings of wealthy and ultra-wealthy consumers.
IWC also swept the highest scores as the luxury watch brand wealthy consumers are most willing to recommend and consider the most worthy of a price premium.
Consumers who rated IWC No. 1 described the brand as "rare and exceptional," "the standard" and having "unique design and classic looks."
Patek Philippe and Vacheron Constantin ranked second and third, respectively.
"At a time when many luxury brands are having identity crises in the midst of an economic crisis, IWC knows exactly who they are, what they offer and who they serve. They are a true 21st century luxury brand, as rated by the ultimate brand constituents: consumers," Luxury Institute Chief Executive Officer Milton Pedraza said in a media release. "Additionally, Patek Philippe and Vacheron Constantin are consistently rated among the top luxury watches by ultra-wealthy consumers. The ability of these brands to be rated so highly year after year makes them brands that deliver the luxury value consumers look for universally."
The proprietary LBSI survey asks high-net-worth consumers to rate luxury brands by category across four equally weighted components: consistently superior quality, uniqueness and exclusivity, making the customer feel special across the entire experience, and being consumed by people who are admired and respected.
A national sample of 1,013 ultra-wealthy American consumers, with minimum investable assets of $2 million, and median investable assets of $4.1 million, was surveyed online. Survey results are weighted to match demographic and net-worth profiles of the same audience according to the latest Survey of Consumer Finances from The Federal Reserve.
