“Vacheron Constantin is offering a phone sales service to United States clients beginning this week,” watchpro.com reports. “Clients can speak with advisors before selecting and purchasing their timepiece of choice over the phone. They can then pick up their watch at a nearby boutique, or receive a personalized package to their homes.” For Vacheron authorized dealers, this means war!
Obviously. The corporate mothership’s decision to sell directly to customers cuts authorized dealers (AD’s) out of the loop. Oh sure, if the buyer picks up the watch ordered from VC at a boutique, the Swiss watchmaker will throw the AD a bone. But it ain’t gonna be the 40 percent markup an authorized dealer pockets when they sell a VC. Far from it.
Worse – for the bricks-and-mortar brigade – Vacheron will have the customer data. They’ll hit up customers with new product announcements, service and sales via mail, email, phone, text and social media, DM and smoke signals. From the dealers’ perspective, Vacheron’s concierges will be stealing customers.
Needless to say, Vacheron Constantin Americas President Leslie Kobrin’s concierge presser glides right over the assault on ADs’ livelihoods.
We know our loyal customers return to Vacheron Constantin not only for finely crafted timepieces but also for superior service. Our concierge team and boutique sales associates are at the heart of our organization, ensuring the highest level of service for customers, now over the phone or in-person.
The role of our US concierge team and flexibility of our boutique associates has never been more important. We’re therefore delighted to be introducing new ways to purchase a Vacheron Constantin timepiece.
VC’s AD’s aren’t so delighted. Or surprised. “Vacheron sponsored a customer evening at our store,” an East Coast dealer told me. “Leslie was there, handing out business cards, telling guests to call her directly if they wanted to buy a watch.” The dealer was not happy, but – “I’m no dummy. I didn’t invite my existing Vacheron clients to the event.”
Notice the word “my.” Vacheron authorized dealers know that their customer list is their business. In a very real sense, they own their customers. They’ll share that data with Vacheron around about the time Hell freezes over. Even so, Vacheron’s concierge service makes them vulnerable to pre-emption.
At the same time as they’re launching their concierge service, Vacheron is opening company-owned monobrand stores (Toronto boutique above), where they can pocket that 40 percent markup (albeit carrying all the costs of doing business). Will VC favor their own stores for customer pickup?
Another issue: Vacheron’s big budget advertising. The watchmaker can lure new customers to their concierge service as the first point-on-contact, data capturing customers “upstream” from their dealers. Click here or call this toll-free number to be connected to your personal concierge.
And it’s only a matter of time before Vacheron follows fellow Richemont brand Jaeger-leCoultre’s data capture scheme: six years of additional warranty coverage (eight total) in exchange for their deets.
Needless to say, Ms. Kobrin spins VC’s Concierge service as a mutually beneficial team effort to give customers better sales and service. A rising tide lifts all boats and all that. Vacheron knows they’re in the look-and-feel business. According to industry consultant gaelparfaite.com, 48 percent of luxury buyers prefer to shop with a brand that has a physical store. Yes but –
Luxury customers don’t start shopping at the store. Thirty-three percent begin their purchase at the brand’s website. If VC can get ahold of shoppers before they get to the authorized dealer, they can carve off a big ‘ole piece of that 40 percent markup. All of it if they can home deliver the watch.
What can Vacheron authorized dealers do to fend off corporate usurpation? What they do best: build and maintain face-to-face, multi-generational relationships. There’s nothing to stop a Vacheron authorized dealer from providing the exact same “concierge” service as their Swiss supplier, exploiting web browsing, text, email, phone, social media, home delivery, etc. to stay closerthanthis to their customers.
VC dealers also carry other watch brands. They have more “in’s” to initiate customer contact. And let’s not forget the fact that a Vacheron authorized dealer can discount watches and negotiate financing (e.g., lay-away and no interest payments). Vacheron Constantin has to charge full whack – lest they initiate a damaging price war and trigger a dealer revolt – and abide by strict corporate practices.
In this war between Vacheron Constantin and its authorized dealers the customer wins. Competition between the Swiss watchmaker and its brick-and-mortar representatives will help insure “the highest level of service for customers.” But the danger to VC and the rest of the Richemont stable is real. Cutting out dealers – expropriating customers – could lead ADs to ditch VC to rep other brands. It could well be a case of killing the goose that lays the golden eggs.
Even in this extremely frothy watch market most of the Vacheron lineup has 25 – 50% discounts on Jomashop. Richemont needs to smash and grab as much as it can now before Rolex, Royal Oak, and Patek are available at retail again and it is game over. I’m not sure how valuable a list of potential Vacheron customers is. I feel like it is as simple as writing a script to scrape the forums for people complaining about how they don’t have enough of an AD relationship to get a Patek or Royal Oak.
One of the more interesting things to watch as manufacturers take over sales will be how the discounts work. Sales at certain times of the year? Targeted offers to good customers? Labeling stuff as refurbished that is just extra new stock? Melt down the extra stock? Target the extra stock to certain geographic regions?
Hmmm… who’s next? Ford? Toyota? Why not apply the same strategy to other products? Buy your Nissan direct, and go pick it up at the dealer (cutting out the sales commission, at least). Eliminate the salesdudes.
I agree, though… the logical conclusion (maybe sooner than later) will be killing the goose. A Vacheron dealer revolt is looming. I don’t see any other outcome.
The traditional watch industry is late to the party here (as with everywhere else). Tesla was direct to consumer from the start (and has had to fight a number of state laws prohibiting direct auto sales to keep expanding that way). Apple made a big shift in that direction. Almost every major clothing brand has boutiques that it owns in big cities.
Ford and Toyota cannot make this move because of incredible strong state laws protecting existing franchised dealerships. The only industry where it is harder to go direct to consumer in the US than the auto business is the liquor business.
Ah… interesting. Thanks.
The AD is a thing of the past. I don’t want a person in a suit that probably knows less about the product than myself in an old-fashioned bling store charging me 40% more than I need to.
Fair. But how do you get a look and feel demo of watches you’re interested in buying?
VC will offer a free 2 weeks return, withholding the money paid until they receive it back, releasing the funds once the watch is received and in pristine condition. That way the customer has enough time to touch, feel and wear the watch around it’s home(!), and finally decide if it’s a keeper.
A perfect sales model if you ask me (a long time VC customer). A bliss 🙂
In pristine condition. In other words, you can’t wear it or remove the case condoms. I can only imagine what the restocking fee would be on a $30k VC.
There is no Restocking Fee to it. A some $100+ shipping fee is nothing really, having an opportunity to see and feel the dimensions and overall feeling of a VC watch at comfort of your own home, at your own pace. Much more of a private experience.
Restocking fee kicks in when the watch is returned with wear. If you wear it, it will have wear. And again, it must be a fabulous ding to the plastic.
old-fashioned bling store charging me 40% more than I need to.
Are the direct to consumer manufacturer portals charging you less? Of course not. So, your point??
Again, dealers do discounts. Not Rolex of course
‘zactly! 😉
At least at the AD there is shot at getting a discount off retail. At a boutique or over the phone you can hardly negotiate. Also one thing that Vacheron forgets is that most watch buyers are not loyal to one brand (aside from rolex) and certainly few of them are loyal to Vacheron. The AD provides a chance for Vacheron to get the business if looking to buy a watch could look at VC at the AD if they were actually looking at another brand.
Who buys a Vacheron anyway? Yea sure, Overseas. Which maybe one starts eyeballing if they just can’t find a Royal Oak or Patek-whatever at MSRP (which … let’s just not even go there).
So you spend $20k on your Trostpreis. Telling yourself that this is better anyway, who needs the actual icons, this is so much more cool and under the radar, and you’re a true watch aficionado, with the watch that really nobody actually wants as a status symbol.
And “call on the phone”, what is this, 1980? I’ve got admins just so I don’t ever have to talk on the phone. We have the Internet now. Messaging. Which you know, works with pictures and video and all that. Just reading “on the phone” makes me think that these Swiss have been asleep for the past twenty years.
Which judging by their watches and marketing and generally being rewarded for treating their customers like morons (maybe justly?) ….
Oh well. Vacheron. Who cares.