A crisis can often prove the catalyst for change. Amid the chaos, we’re forced to rethink how we do things — often with positive results. The First World War, for example, had a radical impact in redefining civil liberties, race relations and women’s rights. It’s way too early to untangle the full impact of the coronavirus on the watch industry. But there are signs the pandemic could push certain brands to reconsider their stiff resistance to e-commerce.
Watch brands have always maintained a heavy reliance on selling through bricks and mortar stores. Morgan Stanley analysts estimate that third-party retailers account for some 90 per cent of Swiss watch sales. Direct online sales offer the alternative approach. Yet while some watch groups — notably Richemont and LVMH — have embraced online retail, most have only taken tentative steps into the virtual world.
A report last year from the online marketing consultancy Digital Luxury Group found that only 40 per cent of luxury watch brands are presently offering direct-to-consumer e-commerce. In fact, online sales of luxury watches account for less than 5 per cent of all sales, according to The Mercury Project, a data-driven consulting company focused on the watch and jewellery industry.
Three conspicuous brands have always rejected selling online — at least through their primary channels. Rolex, Patek Philippe and Audemars Piguet aren’t just some of the world’s most prestigious watch brands, they’re also three of the biggest when it comes to total annual sales (the latest Morgan Stanley Watch Report ranked them 1st, 5th and 7th respectively when it came to market position for their annual sales).
The coronavirus seems to have prompted a sudden change of approach for Patek Philippe on e-commerce. In Britain, for example, the maison has now started to sell through Watches of Switzerland, London Jewelers and Berry’s.
It’s a logical move during the enforced lockdown with many physical retailers closing their doors. Selling through their authorised dealers allows Patek to make their watches available without alienating their traditional retail network.
But the implications of the move are significant. Patek’s change of policy could mark a turning point for their broader online strategy or, to be more specific, glaring lack of one. Could this prove to be the final nudge for the maison to begin e-commerce through their own channels? And will other luxury brands that breathe the same rarefied air follow suit?
Right now, it’s all speculation. But one thing is for sure – in the last three weeks, coronavirus has rocked the world, causing massive social and political upheaval. Amongst all this global carnage, COVID-19 might also force certain watch brands to finally get their act together on e-commerce.