Nobody can deny that the face of watch retailing has changed over the past ten years. The four big groups behind some of the biggest brands in the business have invested heavily in boutiques. The interest for the groups is obvious: the hefty margins paid to retailers, which can account for up to half the retail price of the watch, are funnelled back to the groups instead. In turn, however, the groups have to finance the entire retail operation themselves for each brand. As a kind of “win-win” compromise, many mono-brand stores are operated by local retailers for the brands.
But multi-brand retailers still need the big brands from the big groups to pull in customers. And they often have to take these brands on the condition of stocking other brands from the same group. The independent brands are therefore left to compete with others for the remaining space. At the bottom of the pecking order, the smaller independent brands are finding it increasingly difficult to enter conventional retail channels, with the more adventurous looking for entirely new ways of reaching out to customers.
Romain Gauthier faces an additional challenge in selling his high-end timepieces. Although the brand is popular and retailers are keen to stock it, his target customers are less keen to be seen shopping in such stores and thus remain out of reach.
Pop-up stores – from fashion to high-end watches
Capitalising on the proximity to the customer, a concept as old as the market stall, Chanel has adapted the idea of the pop-up store from the fashion industry for selling its iconic J12 collection. But the brand aimed high, settling for nothing less than the location of the luxury Le Printemps department store nestled under the glass pyramid of Le Louvre, the most-visited museum in the world. The luxury goods department of Le Printemps in the commercial area of the museum allows tourists to meet their two main reasons for visiting Paris: culture and luxury shopping.
The store was open for three months over the summer of 2014 and was dedicated exclusively to the brand’s timepieces. Chanel have not given any hint of the success of the operation, but Le Printemps at the Louvre expects its revenues to top €20 million this year. And the Louvre expects attendance to increase by 30% over the next ten years. Chanel’s pop-up store is therefore unlikely to remain an exception, especially with other watch brands already present in the Carrousel du Louvre.