It maybe a little outside our budget here at discountwatchstores, but International Watch Co or ICW, have finally agreed to sell their $121,000 model online in partnership with their bedfellow YNAP.
After their initial reservations due to the high price tags, ICW Swiss watchmakers have finally agreed to place desirable models such has the Portofino and Portuguese, as they become more comfortable dabbling in the $34 billion luxury e-commerce market.
Indeed it comes after an unprecedented declined for 15 straight months for the luxury Swiss watch manufacturer.
Online Business Partners
IWC who’s parent company Richemont have put together a partnership with YOOX NET-A-PORTER GROUP S.p.A, the Italian online mail order retailer. IWC now have a minority stake in the online fashion empire, and with this partnership, the yoox-net-a-porter YNAP will offer models such as Portofino and Portuguese on their website. This will represent their most expensive watch collection so far.
The luxury watch collection at the cost of $121,000 will be going on sale, online, next week. With this new step IWC hope to test the waters of online shopping, in the hope, it can alleviate the seemingly ongoing slump in sales.
High Hopes For The Future
The merger with YOOX NET-A-PORTER GROUP S.p.A (YNAP) will see IWC’s first venture into the online world and it sees them going head to head, or at least running to catch up with competitors like Hermes the French high fashion house, and Moët Hennessy Louis Vuitton SE or LVMH. These are not necessarily their natural competitors, but with their repositioning, in the marketplace new battle lines are being drawn, as they fight back in the face of continuing decline.
Of course, this is not a one-way street. YNAP expects the partners to bring successes their way in the form of attracted more luxury watch brands into the fold.
A Realignment In The Market
YNAP have seen a success in selling high-priced products such as $25,000 Valentino handbags and Pomellato jewelry. Moving forward their watch and jewelry sales are expected to reach 100 million euros ($110 million) by 2020. Yoox’s CEO, Marchetti has reportedly said of their success in sell accessories “There’s no resistance on price”. So, the goal post may have changed slightly for IWC, but the aim is still the same. IWC will be the first Luxury Swiss Watch brand to enter this space making them pioneers.
Reluctant Industry Change
The final lingering reason for IWC’s reluctance to ‘Go Online’ has been the general reluctance of all the Swiss watch brands. This is the idea of customer satisfaction being paramount, where the prospective customer spending some thousands of Dollars, will want to try the product and discuss it’s relative merits while soaking up the customer service in store.
Interestingly, Rene Weber, an analyst at Bank Vontobel says, Historically, the industry only sees around 2 percent of sales via direct e-commerce. Judging by the huge gray market this is a startling revelation, but perhaps Rene Weber’s estimates don’t take into account such vulgarities as gray market . If that is the case, then the market is simply massive.
The parent company of IWC, Richemont, helped the merger with the Milan-based online retailer YNAP. Since 2011 YNAP sales of luxury goods have increased by 77% across their range, so only good news can follow, right? As Richemont’s Chairman Johann Rupert reportedly said, all its brands need a boost online as he overhauls management amid a 43 percent profit decline.
To back up this assertation, YNAP’s Marchetti YOOX CEO said, “Watchmakers are becoming more open to the idea of e-commerce”.
Now it’s official, the Luxury Swiss Watch market is moving to an online presence to off set the recent declines in sales. This has always been reflected in the massive online presence of discount watch stores, but now it seems the main players, the manufacturers themselves are making the move to online.
That being said, it’s unlikely to affect the discount stores because these are distinctly different markets. In my view, the discount market will always be here, so long as the discount stores maintain their buying power and offer the discounted to these customers looking for the best products at the best prices. With the best will in the world, this doesn’t seem to be the aim of the YOOX and IWC partnership.
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