I saw this on a FB group recently. My thoughts - whilst there are still bricks and mortar shops there will always be discounts and the guy is clearly in it for self gain now rather than the love of horology; a shill for the industry so to speak.
When you bring out a limited edition with a brand and sell out in 2 hours do you ever think of discounting? Shops discount to clear old stock...is hodinkee even holding any stock? Or acting as a go between and earning profit that way.
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Originally Posted by amcneill
Maybe where you shop. Most of us here know that discounts are available on most watches from AD's except those in high demand or long waiting lists. Hodinkee are an authorised retailer for Omega now. I'd also like to know how much "value add" Hodinkee offers buying a core range Omega over my local AD that I've had a good relationship for a number of years.
I do agree with Ben - the industry is moving and the idea of discounts is going to become even rarer. Brands have been annoyed with how ADs manage this as it dilutes the brand value, so the solution has been direct selling i.e. boutiques or through extremely trusted ADs.
Frankly it's a great thing if we have consistent pricing, but there will always be grey dealers who will be able to offer you keener pricing I think.
Why is consistent pricing - ie pricing set globally by manufacturers - preferable to the market operating freely?
In any case, I can't see how its sustainable in luxury goods across economic cycles: the supply of consumer money can't be consistent, fashions change, not every brand can be equally hyped, and, one day, even Hodinkee will be out of fashion. Sooner or later a big watch company will make a bad strategic decision. Then demand for their watches will fall, and then discounts will start being offered again.
The idea that BC has anything other than a deeply partial view on this matter is ridiculous.
Of course different markets will have different pricing but if I am a consumer and go to two different ADs in London and get 2 different prices, it is confusing as a consumer. You will have seasonal sales/discounts but the notion of walking in and getting 20% off the ticket price because you think you expect one is a bit ridiculous.
You either have consistency within a certain market, or you go full on free market pricing as you get in some Asian countries.
My take on free marketing pricing is due to how the brand has supplied the stock i.e. wholesale. If a retailer has to buy stock wholesale and depending on the contract they have a right to sell at a discount to move stock. The brand also has the right to terminate their relationship! They can set the price by providing stock on memo, but I can't imagine any big brand that sells in the tens of thousands doing this for all stock because they cannot afford to have millions of £/$ sitting on their books, and nor will they be able to keep accurate records of what stock is where.
Most consumers can cope with the concept of a can of Heinz soup costing more in a corner shop than in Sainburys.
Why should customers who are capable of tying their own shoelaces pay some inflated price set by a company not actually involved in retail, just so that poor confused souls are guaranteed never to meet more than one price?
An AD discount is one of the only true ways that an AD can communicate with their audience and the brand, offering discounts on slower-selling models or at specific seasonal times to bolster income or differentiate from other ADs. There is no way that the practice will end.
However, I do agree that a blanket discount across a range (and an AD network) is a very odd thing to see, and the (Omega) brand management needs to look at that, to make sense of it.
Ben's position on Value Add [sic] is very interesting.
Hodinkee has made its own cult, and seems impervious to silly pricing, selling out of everything because it has created a brand in its own right. This does mean that Hodinkee may never need to discount, the fans will always hoover up what they offer. Not every AD is in this position.
This is a very envious position to be in, but it is not gained through offering greater value. It is the other way round, they offer higher costs to buyers, the value add is for the sold watches, not the customers. THe extra cost is justified by their online content. This has a nominal value, but it is not high, as it can be found in many other places.
And their position is nearly unique.
D
I believe in Japan brands have to supply to retailers at a wholesale price and they can decide what they charge. There has been little movement in Yen price over the past 15-20 years, but that is because of the strength of the currency. You can go into Yodobashi Camera Store and buy a new Daytona if you like, but pretty much the same as the grey market price in the UK.
We're talking about luxury items - the fact you discount dilutes brand value. Heinz will survive with some brand dilution. That is why the brands are moving to opening and owning the boutique and direct to consumer model. This helps with the idea of value add. Say goodbye to ADs over the coming years as they're pushed out of the picture.
Imagine a brand has successfully moved all its sales to its boutiques. It then, for reasons of either quality or fashion, loses favour with the market. The brand is left with a chain of loss making shops. What next? Shut the worst of them down? In those locations, the ADs offering a range of brands are flexible enough to adapt to the changes in fashion, and will survive. The brand then has to decide: do without that local market, or supply the AD? And thanks to shutting down the shops, it's got a surplus of stock that's going out of fashion....
We love discounts don’t we, but in the longer term they do hurt brand value, and it can be very damaging.
Hodinkee ceased to be at all interesting to me some years ago, but right now they decide what’s cool (to some) and function as market makers. If they are selling there own limited edition co-branded stuff that’s ok, they can be firm with price, but for bread and butter stuff their aspirations of fixed pricing seem unreasonable. Even the mighty Speedy Moonwatch has some degree of discount attached to it. All of this is supply and demand, but Hodinkee’s monied NY based clientele are unlikely to care too much.
D
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A lot of horological brands believed that ADs misrepresent them. And that to counter and regain the message to consumers requires a direct to consumer model, i.e. boutiques and via the internet. Brands clearly believe that D2C retail and managing the brand centrally is worth it while binning ADs. They will be able to adapt swiftly because of that. Rolex and Omega are examples of culling their AD numbers and expanding their own boutiques.
I also believe brands are managing their stock better and can shift surplus to other regions - or in our case across Europe. So yes we will still have occasional sales say at Christmas, and cheaper pricing through grey, but the notion of the discount as Ben describes in the OP is disappearing and I think that is a good thing.
If there’s consistent pricing how will grey dealers be able to buy their stock ?
I think they will still have their sources in the wider European market where they can buy cheaper due to the amount of volume they purchase. Over time even the grey dealers will likely struggle as Richemont and Swatch tighten controls.
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“The days of discounts on truly great watches are coming to an end, broadly speaking”I saw this on a FB group recently. My thoughts - whilst there are still bricks and mortar shops there will always be discounts and the guy is clearly in it for self gain now rather than the love of horology; a shill for the industry so to speak.
I was wondering what qualifies as a truly great watch. Fortunately Hodinkee try to identify the requirements here.
https://www.hodinkee.com/articles/gr...ws-great-watch
Do the Tag Heuer Carrera Calibre 16, the Omega DeVille Tresor Quartz, and the Oris Aquis (to name just three stocked in their shop) make the grade ? I guess they must ;-)
Well if discounting will still be possible for the greys then the OEMs can’t have control of their distribution networks. In that case discounting should be possible for anyone to achieve.
It’s a process that will take time. Let’s see how OEMs prioritise clamp down on greys and how they tighten up the distribution. At the moment it seems priority is first boutiques.
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This is why LV never has a sale, and there is no way of getting a discount, and this is why they still shift stock in droves.
Anything unsold ends up being destroyed.
Charging a few pence difference in two different stores makes no difference to the average person, but a few hundred, or thousand pounds makes a huge difference.
It's already pretty annoying when one purchases a jumper/tv/car etc to find out a week later there's 20% off the sticker price, because it makes you question whether it was even worth the sticker price in the first place.
Apply that logic to a watch, you could spend 5k, the guy next to you managed 20% off after some haggling.
Is the watch in question worth 4k or 5k?
Over time this affects a brands image, how many brands are dismissed because a discount can be had off RRP, leading to lower residuals on the secondary market which in terms leading them to be less popular options, which leads to further discounting to shift stock and so on.
On the other hand, Rolex have had a pretty hardline on discounts for a long long time, (ignoring supply/lists) harder to discount leads to more value retention, which leads to the public they are better value, leading to more sales.
FWIW, slightly to my surprise Hodinkee would not discount a cent on the Grand Seiko Kira-zuri U.S. Limited Edition SBGA384.
So basically Mr Clymer says there's commerce without haggling whatsoever. Because they add so much value. Women/ men will want you (to be their leader obvs, what else) if you wear a watch bought from Hodinkee. And you will satisfy all their needs while wearing said watch. The only downside is that in any weather and circumstance, you'd need to keep your watch visible, otherwise it won't work.
That's an awesome watch btw. Buy that - it's a safe investment
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Currently, I am trying to get the best price on one. Not easy when only 50 made.
Why would anybody buy an Omega from HODINKEE? I just don’t get why they would not go to a local AD or order it from Omega themselves.
I’d sooner do that, instead of putting money into Clymer and his investment bankers.
As an Omega AD Hodinkee should have some obligations regarding stock levels they have to keep and I doubt can they cherry-pick models they would like to sell. Let's wait couple of years and see what are they going to do with those Constellations and De Villes that are not flying off the shelf.
What's the "value add" that they offer so much of?
BC is a C
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