CORDER'S COLUMN: FOMO's New Twist in the Watch Industry
In 2020, I explored the concept of FOMO (fear of missing out) in the watch industry, focusing on how limited editions and boutique exclusivity drive sales. Watchmakers create scarcity, making customers anxious about missing out on desirable watches, which leads them to rush to authorized dealers. This strategy, however, has its drawbacks, especially for longstanding, loyal dealers who end up with unsold core collections.
The issue intensified during the post-pandemic boom, with brands favoring boutique-only releases and allocating non-limited, hot watches to their own stores. This created an unfair advantage for monobrand boutiques over authorized dealers, who account for the majority of sales. The situation became more complex as brands prioritized their internal boutiques for the best limited edition and hype watch allocations, leaving authorized dealers at a disadvantage.
But here's where it gets interesting. In response to this FOMO-driven strategy, authorized dealers began opening their own boutiques, mirroring the brands' approach. This sparked a new wave of FOMO, as retailers like Watches of Switzerland Group, Beaverbrooks, and others invested heavily in building branded boutiques for luxury watch brands like TAG Heuer, Breitling, Omega, and Tudor.
However, the folly of this move is now becoming apparent. As demand for Breitling and TAG Heuer watches declined, retailers faced a challenge. They had committed significant resources to opening these boutiques, but now they must downsize their networks and close unviable stores. Simultaneously, they're realizing the importance of staff training and retaining top talent.
The lesson here is that exceptional in-store and clienteling teams are more valuable than expanding physical space for a brand. Retailers, especially those associated with luxury brands like Rolex and Patek Philippe, must take responsibility for their role in creating a false impression of demand. They often treated casual customers with arrogance, expecting them to buy second-choice items, which distorted the actual demand for many brands.
FOMO has evolved in the luxury watch market. With everything available all the time, waiting lists are now for specific collections from Rolex, AP, or Patek Philippe. Secondary market availability and competitive prices give customers choices. While retailers and brands may continue to use fear as a sales tactic, its effectiveness diminishes during periods of reduced demand and ample supply.
The key takeaway is that retailers and brands should focus on building genuine relationships with customers, rather than relying on FOMO to drive sales. If they fail to do so, they risk missing out on future sales opportunities.
