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Discussion Starter · #1 ·
Hello everyone, I'd like to inform you that I have just started to work for a Swiss Watch company, a very prestigous one as a product manager. I've been told to consult this forum to get some knowledge about the industry.


Some information about me:


26 years old, Swiss National, Bachelor in Economics and had absolutely no affiliation to watches beforehand. The only watch I owned is a Victorinox Inox which is the standard swiss army issued watch.

Company is a well known Swiss watch brand located in the western part of Switzerland.

Thank you and looking forward for some wonderful hours spending here!
 

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Congrats on your new job and welcome.
Based on what I read, most of the prestigious swiss brands recently made it nearly impossible to source parts for their watches. All repairs and service must go via the company itself and obviously cost way more than my local watchmaker would charge me. Do you find this a move in the right direction with an open global economy?

Cheers
 

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I guess this thread would be better served if it is moved to the Public area. I bet you will get flooded with questions there :)
 

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Wait, shouldn't you be asking the questions?
No worries, luckily I have my WIS Rorschach Test handy.
Okay, let's start here...now tell me what you see?
20191105_191837_1572949202710.jpg

Jokes aside, welcome to the forum!
 
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What brand?

Just kidding. What is your job as product manager?

Is your brand in one of the Big Groups and if so how bleak/good do things look? I heard that Swatch and Richemont are looking to eliminate 1000 positions each... and I know there are a lot of watchmakers here already looking for work.

Any response on the parts issue? I just made a set lever (bascule) for a Corum Ti-Bridge (haha, but seriously).
 

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Congrats on the Job, looking forward to getting some insight from you on the industry as a whole , once you settle in to the new position
 

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Discussion Starter · #9 ·
Thank you for your warm welcome.

The worldwide trend to move towards in-house movements. More and more manufactures are switching from ETA/Selitta towards own calibres, as customers want exclusivity and speciality.

Regarding your questions about he source parts. You are indeed correct, that we have the policy to only repair and service in our boutiques or at designated watch repair centers. I am not able to tell you if this is the right directions, but it is the opinion of our management, that we can only ensure a certain standard of quality if we are able to control the complete repair process.

Furthermore to train independent watchmakers world wide and ensure that they are up to date is quite costly.
 

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Discussion Starter · #10 ·
A well known brand :p

I am basically responsible to implement the global brand strategy, which is defined by the board in to a market. Each Product Manager has a designated region.

My daily work is communicating with the sales people of this particular region and try to develop a marketing strategy, create campaigns etc.

Yes the manufactures is part of one the luxury groups. I don't have much information about the overall situation, of course Hongkong is biting us, but there is no short-time work or lay offs within the group. I have however heard of suppliers (of cases, case parts, movements parts) which are struggling.
 

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...Regarding your questions about he source parts. You are indeed correct, that we have the policy to only repair and service in our boutiques or at designated watch repair centers.
...but it is the opinion of our management, that we can only ensure a certain standard of quality if we are able to control the complete repair process.
Furthermore to train independent watchmakers world wide and ensure that they are up to date is quite costly.
Your company does not need to train watchmakers...there are plenty who are already trained and qualified to engage in all level of repairs...if you would just supply parts!

I appreciate the interest in maintaining quality of a brand...but in a "free market" system, the customer ultimately decides with whom he does business. Competent and cost-effective suppliers/service providers thrive. The word gets out very quickly concerning folks who are incompetent and/or expensive...they don't survive.

Are you informing your customers that in buying your product that they are obligated to having it serviced by the company? Are you giving them a recommended service schedule? Are you providing an estimate of cost of ownership due to the periodic service requirements? Are you providing a lifetime service plan and its cost (as some automobile manufacturers do)?

Smart phones, smart watches, and attitude of watch manufacturers (arrogance?) could very well kill the watch industry...and unlike the quartz crisis, this time there may be no recovery.

I wish you luck in your new career and do not wish to be harsh...I would like to think you could have an impact in improving the industry. Swiss management is in for a devastating shock when the Millennials are you primary market.

Best Regards, BG
 

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Your company does not need to train watchmakers...there are plenty who are already trained and qualified to engage in all level of repairs...if you would just supply parts!

I appreciate the interest in maintaining quality of a brand...but in a "free market" system, the customer ultimately decides with whom he does business. Competent and cost-effective suppliers/service providers thrive. The word gets out very quickly concerning folks who are incompetent and/or expensive...they don't survive.
Unfortunately, the free market does not really work like that. Left alone, manufacturers have and will abuse their position of monopoly. In this case, the manufacturers will dictate who can service their products. Unless the governments step in and force the industry to supply spare parts, service documentation and support for all watchmakers/public, things won't change soon. It will take time until consumers will respond to long waiting service time (tell millennials to wait for something and see how they respond) and expensive maintenance for what is a non-essential product. This may also give a blow to the traditional watch industry.
Comparing with the smartphone industry, where Apple has changed its service policy and allows 3rd parties to have access to service documentation, tools and parts.
 

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@theneutralswiss - I have one question for you. How do you see the traditional Swiss watch industry evolving in the next 5-10 years? Some are saying that, because of smartwatches and different generational mindset towards luxury, the industry will try to up-shift once again in the pricing and reduce the production quantities, in order to avoid the oversupply issue currently affecting the industry. What is your view?
 

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I agree with BenchGuy's gloom and doom; in my <1yr of participating here, it's clear to me that this is, for the most part, an older set who grew up with mechanicals before the quartz crisis. While new participants will come along (my son being one), I see 10^n apple watches for every mechanical and that's unlikely to change. As the older guys pass along, your market is going to dry up and the next quartz crisis (the smartwatch crisis) will cause as much grief as the quartz crisis did.

While it may take a while for new participants (or even me, as I've only serviced one and it was on the cheaper end) to understand the total cost of ownership, the drying up of independants will become obvious with tales online of "I got my Rolex serviced by an independant for $X back in the day and you're gonna have to pay Rolex $10X for the same service if you want to protect your investment". That'll leave a bad taste in many mouths, enough to drive them away from collecting.

Your industry's move away from supporting independants looks very much to be a land grab. Customers don't like land grabs.
 

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You're right. The mechanical watch has become a luxury product so the entire experience, from buying to service, needs to become a luxury experience. Sending the watch abroad for a service, without knowing how long it will take and with difficulties in communication between factory and customer, is not what a luxury experience is. Brands need to build local service centers and support independent watchmakers as well.
 

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Hi there,

...Brands need to build local service centers and support independent watchmakers as well.
Likely the best approach, and hopefully it is not too late when the brands notice it.

There is one aspect which is usually missed: In the old times when parts were available for any watchmaker, the second-hand market for luxury watches was boosted by collectors. They could keep these watches alife at acceptable costs, and therefore paid reasonable prices for used luxury watches. Those who bought them new (scarcely collectors) could be sure to get a good price when they replaced a used watch by a new one.

What will happen is first that collectors don't buy these watches any longer because they are not willing or able to pay the service costs. The next is that buyers of new watches can't get rid of them if they want another. Of course there are people who don't mind to kick a few years old luxury watch into the bin, but I'm afraid these are not enough to keep the luxury brands alife.

As a collector of very old pocket watches I don't mind what will happen, but I'm an interested observer of the scene, and I'll not bemoan the brands who presently digg their own graves.

Regards, Roland Ranfft
 

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Unfortunately, the free market does not really work like that. *
Left alone, manufacturers have and will abuse their position of monopoly. **
In this case, the manufacturers will dictate who can service their products.
Unless the governments step in and force the industry to supply spare parts, service documentation and support for all watchmakers/public, things won't change soon. ***
It will take time until consumers will respond**** to long waiting service time (tell millennials to wait for something and see how they respond) and expensive maintenance for what is a non-essential product. This may also give a blow to the traditional watch industry.
Comparing with the smartphone industry, where Apple has changed its service policy and allows 3rd parties to have access to service documentation, tools and parts.
I beg to differ with you:
* Actually a free market works exactly like that...the consumers determine what services/goods they "need" and from whom they will buy goods and services.
** There can be no monopoly when the consumer still has the capacity to say "no, I am not going to buy your product or service." One of the most powerful negotiating tools is to walk away with cash in your hand.
*** When governments step in and regulate, the free market takes a shift toward a socialistic market.
**** Consumer response...can be very quick. An informed consumer base making a discretionary purchase can say "no" very quickly and with firm conviction. If consumers were informed (eg via investigative reporting) of the behavior of Big Green and other luxury watch manufacturers in reducing consumer choices (via closing of jeweler accounts and independent parts accounts), the allure would quickly tarnish. "Killing" the folks who have made your market is unwise...temporarily this may strengthen demand (perception of a more rare product and speculative greed)...until folks realize they don't NEED the product.

The real glitch with free market capitalism are goods and services buying decisions which are necessities (and therefore not discretionary) and/or with decisions which require a long term commitment to a product or service before a change can be reasonably entertained. Wristwatches do not fit either of these criterion.

Regards, BG
 

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I beg to differ with you:
* Actually a free market works exactly like that...the consumers determine what services/goods they "need" and from whom they will buy goods and services.
** There can be no monopoly when the consumer still has the capacity to say "no, I am not going to buy your product or service." One of the most powerful negotiating tools is to walk away with cash in your hand.
*** When governments step in and regulate, the free market takes a shift toward a socialistic market.
**** Consumer response...can be very quick. An informed consumer base making a discretionary purchase can say "no" very quickly and with firm conviction. If consumers were informed (eg via investigative reporting) of the behavior of Big Green and other luxury watch manufacturers in reducing consumer choices (via closing of jeweler accounts and independent parts accounts), the allure would quickly tarnish. "Killing" the folks who have made your market is unwise...temporarily this may strengthen demand (perception of a more rare product and speculative greed)...until folks realize they don't NEED the product.

The real glitch with free market capitalism are goods and services buying decisions which are necessities (and therefore not discretionary) and/or with decisions which require a long term commitment to a product or service before a change can be reasonably entertained. Wristwatches do not fit either of these criterion.

Regards, BG
* You are right in general/theory, but this is only the point of view of the consumer. Looking from the perspective of the other actor, the seller, things go like that: "How do we create a need for our product, so the consumer won't really think about buying it, but would crave on buying? How do we activate the consumer's basic instincts so it would override his intellect?". This may put the seller in a position of monopoly, where it drives the buying-selling act. The more sophisticated the story is, the longer it takes for consumers to figure it out they've been fooled.
*** The thing with the "socialistic market" is purely American propaganda :) (we don't have this view in Europe, even though some of us lived through comunism). Governments step in and regulate all over the world, including in USA. Otherwise we wouldn't have for instance warranty for the products we buy. For example, are you aware that the same product has a one year warranty in USA but 2 years in Europe? By the definition of free market, the american people should have voted with their wallets against this discrimination, yet they did not.
**** Consumer response may be very quick indeed, but it depends on the story they've been told. We see aberrant behaviors in the watch market, where, although the brands "abuse" the consumers (e.g. Rolex sports watches), the consumers crave it more and don't change their behavior. On medium/long term, consumers may change and shift their focus away from Rolex to other brands.
 

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I wish I could share the optimism of some of the posts here, but I suppose it does bring a whole new level of luxury and exclusivity when you have to send your two grand watch to another country to be serviced "just because" and then you get to pay 25% of the purchase value of the watch to get it back. It's funny how the industry big shots say they want to ensure quality and then do whatever they can to create a black market service trade with shoddy quality, voided warranties and tax evasion. As Dolly Parton once said, it costs a lot of money to look this cheap.
 

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As a consumer, I have the power to say, "no"...I don't NEED that luxury watch, handbag, dress, suit, etc. If enough of us exercise that power, companies will respond or perish.
I service a number of high-end luxury brands. I do not have accounts with most of them. I OWN none of them as personal timepieces...although from time to time carry a used luxury watch as inventory.
Seems the OP has gone missing, even though this thread has become more about his area of expertise (Economics) than watchmaking. Watchmaking = physics; Economics = psychology...most watchmakers are very comfortable with Newton, but maybe not so much Freud.
Hopefully our young friend will take some of the insights from this thread back to his superiors and they will consider testing the rationales in the marketplace. However, until the Swiss watch industry is sufficiently humbled (by loss of revenue?) they will continue to believe that their model is working and likely turn a blind eye to change.
Entertaining thread...I'm ready to get back to the bench now, embrace Newton, and maintain an income.
Regards, BG
 
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