I recently heard on a watch-related podcast that one of the hosts expressed a desire for collectors to focus less on pricing, stating that he dislikes seeing comments such as "it's too expensive." This person is evidently detached from reality, as modern watch consumers are more focused on pricing than ever before. Price is likely the most critical factor influencing their decision when purchasing a watch. To dismiss this as a knee-jerk reaction to labeling things too expensive is to ignore your audience's primary concern.
In an era of unprecedented cost transparency and the rise of micro-brands offering exceptional value, it's essential to consider examples like Christopher Ward. Their pricing structure is straightforward: they charge three times the cost to manufacture each timepiece. Yes, this is a direct-to-consumer model, as are many, if not all, of the previously mentioned value-added micro-brands. Today’s consumers are more informed than ever.
Websites like Watchcharts.com and resources like
Calibercorner.com make tracking trends and comparing different watch components
easy. The days when brands could conceal information behind fabricated movement
numbers are over. Knowledgeable enthusiasts can now piece together the whole
picture. But how did we transition from where we were to this point? When did
five-figure steel watches become the standard? Before we answer that question,
let's revisit the early days of watches on the Internet.
Using the Wayback Machine on the Internet Archive, we can step back in time and see what watches used to sell for. The year is 1999, when websites like Timezone.com and watchnet.com once ruled the web. Consider sitting down while reading this. Cartier Santos two-toned on bracelet (near mint) $1350, IWC Fliegerchronograph on bracelet pre-owned $1690 (MSRP $3595), Omega Seamaster Pro “Bond” quartz on bracelet $795 (MSRP $1,395), Rolex GMT-Master ca. 1971 on early jubilee bracelet (near mint) $1,890.
Let’s take the Breitling SuperOcean as an example. In 1999, this watch had a retail price of $1,750 when sold with a stainless steel bracelet. Today, its 42mm successor has a manufacturer's suggested retail price (MSRP) of $5,650. While the new model features a ceramic bezel and a more sophisticated clasp, it essentially contains the same movement as it did 26 years ago. However, it is now a Sellita movement, rather than an ETA. $1,750 in 1999 is equivalent to $3,359 today. Is the new SuperOcean $2,300 better than its predecessor?
With economies of scale, improvements
in manufacturing, automation, and other factors, the cost of manufacturing these objects would decrease. It has not. Although material costs and labor have
risen over the years, they are not the only reasons for the price increases. A
lot has to do with supply and demand, which was exacerbated by the worldwide
pandemic, and then there’s the Rolex factor.
Whether by design or not, Rolex cannot keep up with demand, and as a result, it has been steadily increasing its prices. Why?
Because it can. The impressive prices that its pre-owned watches are fetching
only encourage it further. Because Omega desperately wants to be seen as the
Rolex alternative, it has also increased its pricing. However, it has stepped
up its movement and materials game.
The Omega Seamaster Pro 300m, known for its appearance in Pierce Brosnan's James Bond films, originally retailed for $1,725 (equivalent to $3,311 today). When bought on a bracelet, the current version of this watch is priced at $6,200. Does the new movement and the incorporation of ceramic materials justify the nearly $3,000 price difference? Some enthusiasts even prefer the older model for its slimmer case and timeless appeal, but that’s another discussion.
Sadly for us, Grand Seiko also has its sights on the crown. In
the late 1990s and early 2000s, their watches were considered the best value on
the market. However, sourcing them was challenging since they were only
available in Japan. Since they expanded to global markets, their popularity and
prices have risen significantly. I was told by an authorized dealer that they
lost the right to sell Grand Seiko watches because they wanted to feature alongside
Rolex in another store.
As brands like Omega and Breitling have increased their
prices, a gap has emerged for companies such as Oris and Longines to raise
their prices to levels similar to where Omega and Breitling used to be.
Although Oris and Longines have improved their materials, design, and
movements, it would have been hard to believe 15 years ago that a titanium
Longines Spirit Zulu Time would cost $4,500. Or that an Oris Big Crown Pointer
Date would cost $4,300. In 1999, you could get one pre-owned for under $500.
In its wake, Swiss brands like Hamilton, Tissot, Mido, and smaller independent brands like Formex, Oak & Oscar, and Isotope are filling the vacuum. Their recent popularity is undeniable, and many, including myself, believe they are producing watches that offer exceptional value for their price. We are fortunate that Swatch Group brands have a defined hierarchy and cannot rise significantly within it. Let’s hope those other brands remain accessible while continuing to push the boundaries of what is possible.
Social media has also significantly contributed to the price
rise, particularly during the global pandemic. We witnessed a perfect storm, with people confined to their homes, having access to social media, and possessing disposable income that would typically be spent on vacations, dining
out, and other unavailable activities. That’s when everything got entirely out
of hand, and watches from brands like Audemars Piguet, Vacheron Constantin,
Patek Philippe, and Rolex started selling pre-owned at 3 to 10 times the retail
prices.
The market has since corrected itself, but prices have not returned to pre-pandemic levels. The issue is that many brands became overly optimistic, believing that demand would persist indefinitely. Those who took risks regret their decisions, contributing to the underwhelming Watches & Wonders shows of the past few years. As brands reduce production, they are reluctant to cut their profits. Consequently, many have chosen to raise their prices instead. By selling fewer watches while maintaining higher profit margins, they benefit from this strategy. Unfortunately, it is the customers who ultimately bear the cost.
I understand what you might think: We should all buy
micro-brands and be satisfied. Unfortunately, it isn't that simple. My local
watch group and I recently discussed pricing and branding deeply. While we like
to consider ourselves non-snobbish watch enthusiasts, the reality is that it's
nice when someone recognizes and admires the watch on your wrist. Regardless of
snobbery, these watches are aspirational items, and for many, especially those
outside our circles, the brand name carries significant meaning.
I believe that the value of items—whether cars, electronics, or even watches—depends on what people are willing to pay for them. Currently, that seems to be the case. As long as individuals are willing to wait months or over a year for a five-figure watch, brands will continue to set high prices. Personally, I hope prices return to a more reasonable level. While these items are intended to be expensive, I find it excessive that Girard-Perregaux has introduced a vintage-inspired 200m dive watch on a rubber strap priced at $15,100. In my opinion, that is simply… Way too expensive.
