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- [00:03]
A
Foreign and welcome back to the Virtual Studio for another episode of the Real Time show with me, Rob Knutz, your friendly neighborhood watchmaker, and Alon Ben Joseph, your friendly neighborhood jeweler. We're back mining through the mailbag for another exciting edition of the show. Alon, how are you doing today?
- [00:23]
B
I'm very well, thank you. Hope you're well as well. I've enjoyed the previous Q and A we did. Gave me a lot of energy. We had some amazing philosophical questions. I'm very curious what we have in the mailbag for this episode.
- [00:38]
A
Well, we've got quite a few questions to buzz through. I doubt we'll make it through all of them, but that's never a problem and we're always desirous of more. So please do send us your questions via any of the usual channels. If you'd like to join the TRTS network, just let us know. You can drop us an email, a message on Instagram, however you please, and we'll add you to it almost immediately. Okay, we're going to pick up with another question from Berndt, who has been sending us lots of queries, which is great, so thank you for that. First up, this question. I do agree with the interview with Jean Claude Hubert and what he had to say on watch marketing, and he makes some excellent points within it. However, the most prominent point that we discussed a few times in a recent episode was the perceived double value of a watch relative to its price. Interestingly enough, it is the very same Mr. Biver and his new family brand where I see the perceived value of the watch being rather the opposite of that. Bernd's question, do you think his new Carry on models really offer double the perceived value of their price?
- [01:44]
B
Hmm. Bernd, are you a philosopher by daytime or nighttime? Very good philosophical questions. I think that Jean Claude and his son Pierre do believe so because proof is in the pudding. They have auctioned off recently one of their very unique pieces that I believe went for 1.6 million. I don't know if retail was 800 or less or more, but I guess it's still a bit early to say if it is so. Their proposition is they're making the ultra ultra Hortologie pieces. They compete with the Pateks of this world, the Vacherons of this world, and maybe his his old Blompin. In their eyes I think they are. In our eyes we might think they're not because the brand is not loaded enough. The watch brand, obviously. The Persona Jean Claude Bifair is, by the way, I don't know if you've noticed Rob, did you see the press release? They appointed an external non family member as CEO?
- [03:10]
A
I didn't see that, no. Who was it?
- [03:11]
B
I forgot the name. While you give your two cents, I'll maybe google it again. It is I forgot his name but I think he comes from Philip's watch auction and if I remember correctly, Pierre interned there and Jean Claude bought many watches through Philip's watches so it is a family friend. So it's interesting they're making steps in the watch industry. They seem to not be a one day fly. It seems they are solidifying the organization because Pierre is relatively young. Jean Claude not had health issues as far as I know he's recovered from those issues but obviously he's not the youngest anymore. So I really think they're building a brand that's here to stay. So are they really offering double the value of their price with the carillion models we should maybe compare it to other brands that make carillion watches but they're not that many and I guess their retail prices are up to par to these other manufacturers. But as we've discussed in one of the previous Q and A episodes, pricing is subjective and the market decides the true value and it's ruthless. So these few auctions, one that comes to mind is the only watch It's a beware piece that made my top three or even came in at the first position. They are making such unique pieces and rare pieces that in that sense I think they're offering more value than the ticket price. But I think we need more time. What do you think, Rob?
- [05:15]
A
I think that ironically, and I know this is why Bernd was asking the question they don't offer double the value of the price. But I actually think that when we're talking about watches that retail for these kinds of prices, we shouldn't expect the same philosophies espoused by B in that famous interview to hold quite as true. Why is that? Well, these watches in almost any terms don't qualify as products in inverted commas. Yes, of course they're products definition is they are a product of that company. But what I mean by that is they are pieces. Maybe one could say they are treasure. They are something else. They're beyond the scope of mere mortals in many ways when you're talking about adding that perceived value I think it's mostly relevant and not totally irrelevant in this price bracket but almost totally irrelevant. It's mostly relevant in very competitive volume brackets when we're talking about Consumers having a great deal of choice. What is it that differentiates one model, one product from another? So something like a Seamaster versus a Submariner. Some direct corollary that has similar specs, has similar form, has similar function, would be worn in a similar environment, for example. I think there. Beaver's maxim is very, very relevant. Extremely important for brands to consider when they're building a product to embellish their brand. In Biver's case, in the watch brand, Biver, the brand is more important than the product itself. And one could argue, I think quite effectively really, that that's part of what Beaver was, was meaning with, is add value to the product by having a brand fully embellished and desirable in itself. But here it's, it's all about the name. If these watches had come out, and let's be frank here, they're nice watches, they're well made, or shall I say that they're better made than they are nice, maybe, but the niceness is entirely subjective. If they'd come out from an unknown maker at this price point, they'd have been panned, and they were pretty panned, even though they came out under Biver's name. To be fair, it wasn't what people expected. It certainly wasn't what I expected. I thought that the opportunity for Jean Claude at this stage of his career now was to leave a legacy that in many ways summed up his contribution to the industry. And I think his most important contribution was really Blancpain. We can say what we want about Hublot. I think he did wonderful things there, but Hublot is always going to be a bit of an outlier because of the way that approaches business and the creation of watches. I think Blancpain was really the jewel in his crown when it comes to his CV because of his staunch rejection of quartz, because of the classic eternal styles of the brand under his leadership. And I expected to see if I could maybe choose a corollary of what I expected and wanted to see, it would be something like Luc Chopard. So that kind of Chopard, that kind of classiness, that kind of wearability, that kind of timelessness, that kind of quiet perfection is, I suppose, what I expected. What we got was very loud offering. Everything was turned up to 11 on those watches. The bracelet on the original pieces was actually really, really well executed and quite cool. Not exactly elegant, it was refined, but it wasn't elegant. The dials were themselves showstoppers. They didn't need all of the extra accruita monsters. Watches came with the Case was massive. The watch was striking. To me, it was more like Jacob and company than it was Chopard. And that's what I felt was a bit disappointing about that launch. Because I wondered, as we've seen with the addition of a new CEO, that if this company were to exist beyond Jean Claude's lifespan and be headed up by Pierre, whether those kind of pieces would sell without the great man's energy and personality driving them onto the wrists of consumers. What do you think about that? Do you think that his maxim is relevant regardless of price point or do you think there's some truth in what I'm saying?
- [10:09]
B
There's a lot of truth in what you're saying. I've googled in the time being, it's James Marks who has become the CEO of the brand Beaver. So he will retain as a consultant to Philips auction house. I think it's a good thing because beware, the brand taps into those epic watches and somebody who worked at an auction house knows obviously best what was epic and what wasn't in the mind of collectors. So that's interesting. The watch that I was talking about that was sold for about 1.3, including the commissions, was their first prototype. But that's already more than a year ago and they did pull out from only watch, so I actually don't know what happened to that piece. Talking about market values, would this brand be where it is today without Jean Claude? Of course not. I hope he lives to 120. For argument's sake, imagine he gets run over today. What will happen to the brand? Very ancient question. I. I actually don't know and I. I haven't met Pierre in person yet. Unfortunately I've missed him twice during fairs. We've communicated via digital tools. He still needs to come onto the show, so maybe I'll park my answer until I've spoken to him or at least met him.
- [11:55]
A
Firstly, I absolutely love the. It's a Jewish thing to say. I hope he lives to 120.
- [11:59]
B
Right?
- [11:59]
A
Yeah, it's incredible. It's one of my favorite sayings that I learned from you. I think it's brilliant. But secondly, wow, that is grim. Like Uncle Bever getting run over. I mean, I wouldn't want to be that automobile. I think he'd probably just. I think the car or the boss would come.
- [12:14]
B
Tram.
- [12:14]
A
Worse. Or tram. Or train. Yeah, it could be. Or bicycle. It could be anything. But whatever it is, I don't fancy his chances. No, I think he'd stop it in his tracks with sheer force of will. So even. Even. Even at his advanced years.
- [12:27]
B
Yeah. No, but I mean, come on, let's be realistic. Everybody who runs a company needs a contingency plan. And him putting a CEO in place shows responsibility, it shows maturity on both Jean Claude and Pierre's behalf. It creates objectivity as well. So I find it a very interesting move, but a very smart move as well.
- [12:57]
A
Yeah, absolutely. I mean, there's nothing to be said about Jean Claude if you don't start with how intelligent he is, how adept he is at navigating his career and now as a guiding light in the career of his son. And yeah, obviously we wish him a great many decades at the helm of the company, but yeah, it's a smart move, has to be done. And yeah, I'm glad they've taken those steps. And I don't know much or anything about Mr. Marks, but I hope that he is the right choice. He sounds like he's got a great pedigree and more power to him. Let's move on to another question. And now we're going to take one from Max, which thankfully is, you know, an easier question in many ways less philosophical. Hopefully we won't take 15 minutes over answering this one. But you never know. You really never know with the way these things go. Max says, how do you clean your watch? And how often do you clean your watch? So alon.
- [14:01]
B
Very good. One first tip I've always give everyone, if you have a waterproof watch and you've went into the ocean or a swimming pool, always rinse it with sweet water. That's the first tip.
- [14:16]
A
Just one addition for our non Germanic language speaking listeners. Sweetwater, we call it fresh water. So just out of the tap. It's one of the cutest changes. Zus wasser in German. But yeah, fresh water.
- [14:32]
B
Fresh water.
- [14:33]
A
You don't have to. You don't have to add sugar to it. That's not a good idea. Don't do that.
- [14:36]
B
It's zootwater in Dutch as well. So, yeah, I'm thinking so deeply that I'd literally transliterate so. But before you go into the water or rinse your watch, make sure your crown is either pushed in or screwed down. And remember, if you are planning, especially during summertime or whenever, to use your watch to immerse it in water, have it checked for its waterproofness if the seals still hold up. Now, a few rules of thumb. I hate that the watch industry uses meters in all of their communication and they don't explain what they mean by it. So.003 bars, they translate that to 30 meters means about 3 bars of pressure a watch can handle until water will penetrate the case. If you really lower a watch very slowly, hypothetically to 30 meters, that is on average equal to a pressure of three bars. That's what they mean, the watch brands. We always say for real swimming you need five bars. But I often say that's not enough. Use at least a watch with 10 bars. For plunging into a water, you're better off with 20 bars. 200 meters for real diving, not snorkeling. Going really a few meters down and staying at that level, you need 30 bars, 300 meters and etc. Going up. So now imagine it's not a waterproof watch. Going back to the cleaning bit, um, when you see not a tarnish but really a buildup of dead skin cells, you've waited too long. Does that answer the question?
- [16:41]
A
You know he's opened a can of worms there. Because we're going to have to address some of these points or I'm going to have to come back with some counter points, as it were, to the water resistance ratings and whatnot. But to answer the question just from the top level, I probably, based on your last comment, don't clean my watches often enough. I never really notice that there's a buildup of skin cells, shall we say, or dirt on watches until it's more obvious than perhaps it should be. And like you said, if they're water resistant to I'd say at least 100 meters. I wouldn't, I wouldn't do this with a watch any less than 100 meters. Water resistant. I will run them under the tap in lukewarm water. I have a very old soft bristle toothbrush that I use to scrub the outside of the watch and especially the bracelet. I'm really, really panickety about getting the bracelet clean. When it comes down to it, when I do do it. And that's why I like a good flexible bracelet with a nice drape because easy to get in between the links. And I do use just a standard sort of soap, like a detergent, like a washing up liquid. I've never had any problems with it. It's never cause a discoloration on components such as anodized aluminum bezel inserts. Although I would be a little more gentle with those for fear of putting a scratch on them. Even with the soft bristle toothbrush that I rely upon. If it's 50 or 30 meters water resistant, I would wipe it with a damp microfiber cloth. I wouldn't subject it to running water personally. And I also clean my straps delicately. Again, even, even a leather, I'll do it with a very, very, very mildly damp microfiber cloth, sometimes a leather cleaner just to homogenize the appearance because obviously leather will discolor, it will stain over time. It will hold those stains. But if you have, for example, a cognac leather strap, which is one of my favorite colors to wear a watch on, I would sooner stain the entire thing a little darker with a saddle cleaner than I would have sweat patches showing. Long term when it comes to fabric straps, I just flip them off. I'd give them a wash in a shallow basin of warm water with detergent. Wouldn't be too delicate about it. They're generally not hugely expensive components to replace, but if you've got a lighter colored one, that's also fine. Some watches, like a flic flac from Swatch can be, I believe, chucked in a washing machine if you I would take the battery out just to be on the safe side. But they are supposedly able to be washed in a pillowcase. Check the instructions. I think that's still one of their advantages because they're designed for kids who are won't to get their straps dirty. So on the subject of water resistance and I've been listening to this watch Life with Vu Boi and Lydia Winters obsessively, as I hope every member of the network has been doing to support our good friends in their endeavor. And they've had some great conversations about water resistance and something that I think we should maybe even get Vu on the show to discuss because he's particularly sensitive about these ratings because they don't mean what people think they mean. 30 meters for me it means splash proof. So you can wear this watch while you're washing your hands. I wouldn't take it in a shower. I would even be concerned about it being subjected to extremely heavy rain. Depending on where you live in the world, that might be more relevant than for some other people. 50 meters fine for heavy rain. Don't submerge the watch. 100 meters fine for pretty much everything most normal people not partaking in extreme sports will subject their watch to. But why is it that a 30 meter watch cannot go down to 30 meters? Well, it's largely because these watches are dry tested. So they're tested under pressure, not with the water around them. That's one of the reasons. Other reason for water resistance that people often neglect is actually not so much to do with the gaskets as it is to do with the entire material composition of the watch and how robust the watch is. So yes, thicker gaskets help, but so do thicker case walls. So do thicker crystals, so do thicker case backs. It's because when the pressure builds up on the outside of the watch, it isn't so much that the watch will allow water to ingress, because as the pressure builds up, all of the components and the gaps between them will be compressed themselves. So the watch theoretically becomes more watertight the further down it goes, until its material structure fails and it collapses in on itself. So take for example a very gracile watch like the Nomos Metro 1101. Great watch. It's not got a huge water resistance, but it's not to say that it would necessarily leak before it folded up like an origami crane in the rain when it went several meters underwater. That's because the case walls are so thin that it can't survive the external pressure. You did mention something along that is interesting and hotly debated in Watch for around the world and that is the running water or the impact or increase, sudden increase in pressure caused by jumping into water. So I used to be a very firm supporter of this theory and I used to use the hot tub as an example of the worst possible place to wear a watch. Because the water is warm and when things are warm they expand. In almost all cases, water is an exception. Before anyone points that out, it's due to the molecular structure of it. Apparently something to do with hexagons. Ask a molecular scientist, not me. But yeah, most things get bigger when they get warm. So the gaps between a watch would also theoretically get bigger. Also in a hot tub you've got jets of water being fired around at much faster speeds than water would normally travel in a normal environment. So the theory was it's terrible because you've got this increased pressure despite minimal depth with warmth. Turns out it's a bit of an old wives tale. And the speed at which you would have to move your arm through standing or agitated water, as you'd find in a hot tub, is so fast you'd more likely break your forearm before you would create a sufficient increase of external pressure on the watch for its seals to fail. And the heat is so minimal. Again it was, yeah, it's, it's a theoretical truth, but it's a practical nonsense. So I'd still stick with what Alan said about not jumping into water with anything less than 100 meter water resistance. But sometimes the reasons for it are a little bit overrated.
- [23:36]
B
On topic of warmth. What about saunas? What's your stance on that and watches?
- [23:43]
A
Yeah, well, theoretically it's the same principle. It doesn't get so incredibly hot in a sauna that the watch itself should suffer. But if it's on a leather strap or a fabric strap, I'd very much avoid it, just from the sweat perspective. And I do think that if you're in there for a long period of time, you might risk damage to the seals. If the sauna is, you know, like 90 degrees or something along those lines, that could really cause some accelerated degradation. I would say theoretically, it's obviously true. Practically the question is whether or not you could stand the sauna long enough for it to have an impact on your watch. I'd err on the side of actually that not being the case, but I think it's very uncomfortable to wear a watch in those environments anyway. And obviously one of the biggest things to think about is the material of the watch and how quickly it takes on the heat of its surrounding environment. So something like steel would heat up a lot quicker than something like titanium, which is very inert. Titanium retains its original temperature for much longer than steel, which is why it feels warmer. This is one of those weird sort of converse facts about watch materials. It's why titanium feels warmer than steel when you put it on. Steel will heat up faster than titanium. So you'd think that titanium is more reactive than steel, but actually it's because the titanium hasn't adjusted to the temperature in the same way that the steel has. It's more inert. So it's basically much more often in the middle spectrum of temperature than steel is. Steel is very reactive. If you left a titanium watch on a radiator next to a steel watch, which is not something I advise doing anyway, but I think theoretically the steel one would heat up faster. So if you are going to go into a sauna, maybe wear a titanium watch on a washable fabric strap. So the no time to die James Bond special edition on that beautiful black, beige, gray NATO ideal for saunas, taking.
- [25:47]
B
It further from the sauna, very hot, 80, 90 degrees maybe. And then you take an ice shower with your wrist watch on afterwards, immediately with your watch on, still a no go.
- [26:03]
A
Well, I mean, what do you think is going to happen is the question. Like the titanium watch, again, like theoretically would be like the ideal one to handle that because it wouldn't be so reactive to the temperature changes around it. The immediate temperature changes at least. But what's most likely to happen there if there is some weakness in the cases you'd get condensation on the underside of the glass. That is not good. Not advisable to put your watch into that environment if you can help it. But it's unlikely if the seals are properly functional to have any real issue with. If we're talking about a watch is already at least resistant to 100 meters. I really don't advocate doing much extreme with anything less than that. And that's. Yeah, there's lots of reasons for that, but just the material strength of the thing is really the number one. But just, just don't do it like it's not. I don't think it's that important, is it? There's normally a clock or a sand timer in a sauna anyway. So.
- [27:01]
B
Excellent. Thank you. About the cleaning. Very extensive, very valid. I actually do it exactly the same in the Netherlands. Arco rain. Don't cycle with a watch that doesn't have five bar at least and hasn't had its seals replaced the last three years, five years or whatever because that will definitely fill up with water. Thank you for this question. Dear Max, Lawrence is back from the TRTS network and he had sent in the question how does one handle its mainstream brands? As an ad assume you have to take on stock, even if it's probably unsellable without a hefty discount. Rob, before I answer this, let me kick it to you. You've sold watches to retailers, you still sell to retailers. What's your point here on being a partner to your ads?
- [28:12]
A
Ah, good question. I know exactly where Lawrence is coming from and I'm looking forward to hearing your answer as it pertains to bigger brands, especially those that you've worked with directly in the past. Because that's really what he's driving at. It's interesting. So obviously our relationship began when I was managing the sales network in the Netherlands for Nomos and my strategy, which maybe is why I'm no longer managing the sales network for Not Lost in the Netherlands or anywhere else, was to be a good and sympathetic partner that listened to retailers desires and I'll be quite frank, the flexibility a brand is willing to show when it comes to a collection they want to sell into. A retailer will come down basically to how much they want that retailer to be their representative. So there is rarely one hard and fast rule. Obviously for some brands like Rolex, you can just dictate the terms, you can dictate the margins, you can dictate the space that you command. And that's the end of the conversation you either put up or shut up. Whereas a brand like Nomos, who is, you know, keen to be presented alongside heritage brands, prestigious brands, knows full well they have to play between the lines a little bit. They have to find a compromise that works for the retailer, works for Nomos, and works for the brands are already occupy space in the store. So whenever I would approach a Rolex retailer in the hope that we could get them on board for normal, their first response was, how much space do you need in the store? And I would say, you know, not too much, maybe just a foot, just 30cm would be enough to put a small display. We can give you some watches to populate the display, we can give you more to keep in the safe. So we can put the flag on the map and people come here and try on those watches in comfort of your store. And they would say, okay, that sounds reasonable. Let's just call Rolex and see what Rolex says about it. And they would ring up Rolex and Rolex would often say, hmm, okay, well, if you give us that one foot of space that you somehow managed to find in your store, we will send you an empty display for a GMT master and maybe in a few months you can have a Batman. And they come back to me and say, sorry, Rolex wants that space. Okay, fine, fair enough. If you really want the brand, you could suggest that you just put watches in there safe just so people can go and see the retailer and try on those pieces. That shows a great deal of flexibility and willingness on the part of the brand to work with a retailer and to be a good partner. If the retailer, as in your case, was very receptive to having us displayed, in fact, very proud to have no displayed in the window and in some dedicated space in the interior of the store, then the conversation becomes a lot more mutual and we say, okay, our standard collection is, for example, 15 to 20 pieces. We'd like you to buy these pieces to get our collaboration off to a good start. Then one would expect the retailer to come back and say, ah, well, look, in this particular market, we don't sell colored dials very well, or we don't sell watches under 38 millimeters very well. And so you go back, you'd structure the collection differently to try and match what you expect to see in the market, while always trying to insist at least that the core offering of the collection is represented in the most relevant fashion as is possible. So for no more, she'd always want to have the classic tangent to 35, even if the retailer was saying, 35 millimeters doesn't sell here, we only sell watches. 40 millimeter plus, you say, come on, Kate, trust us. This one's gotta be here. It's the icon. It's the anchor point of a collection. It's where a lot of people start. And then you would say, so with Fortis, I do the same thing. Now in the US we have three standards collections that we present to retailers as options. Often we'll choose the one we think is most relevant given their other brands, given their demographic, given the feedback they've given us. But we can always be flexible if we want to be with the retailer. And so on my side, because I've tended to work with smaller, independent brands. And the independence is a big thing because you can be more dynamic. You can really work with the retailer at eye level to construct a collection that is going to offer you, based on their intel, the best chance of success, which is good for everybody. Because if the retailer turns their stock, they buy more, they feel confident, they spend more time learning about the brand, and they push it harder. So that's my perspective. And now we get the answer from the man that really knows what he's talking about because of the wealth of brands he's worked with over the decades.
- [32:47]
B
Thank you, Rob. And I concur everything he said, because that's how we started working both. Rob is literally on your side of the table as a supplier and not on the opposite side of the table. So he's there to help you and does never, ever push watches. Nomos doesn't either, and has never done so. In defense of the Rolex group, up until early this year, we were Tudor dealers, not Rolex dealers. Tudor actually never has pushed models I didn't want. They do give very strong advices. I did not listen to all of them. But, hey, maybe that's why I don't have the dealership anymore. What do you think, Rob?
- [33:41]
A
I. I think that might maybe have just a smidgen to do of it, but I think it's more likely their international strategy, with which I disagree, by the way, because you are always a fantastic representative for tudor. And tell me this, though. Did you take on board their request or their advice more times than not simply because even if you didn't like the models, you knew they would sell. Or was it because there was this slightly unequal relationship between you and Chig?
- [34:10]
B
Now, let me give you two examples. One positive one, they launched the Royal Collection in Asia. We immediately loved it, begged to have it. They Said, no, it's an Asia collection. Then they opened up Europe and they recommended us not to take it. So we didn't listen and we took it. It wasn't hit. Now, they came with the black base without the turning bezel, the non dive versions in two tone. Okay. Because we do believe that if you are an ambassador of the brand, you should have as wide as possible collection, but obviously keeping it healthy. So we wanted only four. They highly recommended we take 12. And then, you know, they keep on advising to take more. Guess three times now in the sale that I'm doing to sell out the models that I've purchased from Tudor as an ad, and I'm not an ad anymore. So there's a sale going on. What models do you think I still left with?
- [35:15]
A
I'm going to say exactly those pieces.
- [35:17]
B
Exactly. So that's how Tudor does it. Now, the big groups, we've lost several dealerships of those groups. The first thing that I really don't miss is the asymmetrical relationship that you politically correct put, and I put it like bullying. I really don't miss that. Some brands we voluntarily handed back and one of the reasons was because of this asymmetry, this pushing, these package deals, it doesn't work. It's not healthy. In the previous Q and A episode we talked about what's healthy that's not healthy. In the end, it's the big groups that are run by quarterly figures for their publicly listed companies that they push and push and have no idea where these watches end up since they have more and more mono brand boutiques on the high street and E boutiques, so E commerce websites, they are now confronted with the hard reality and the facts. So today at Ace Jewelers, we are left with actually one brand from a big group. That's Senet. You actually sat in at that meeting at my retailers meeting at Watches and wonders. Rob, you tell the listeners objectively how that meeting went. It's lvmh. Zenit owns lvmh. You tell them. I'm not going to even put words in your mouth. How did that meaning go?
- [36:52]
A
Well, you're asking a lot of me to be able to remember specifically how that meeting was going because I was more laser focused on the watches themselves. But from what I remember, it didn't seem like a particularly hard sell. It felt like you had quite a lot of flexibility to choose between the pieces, as in what you liked and what you didn't. I do remember you being almost comically dismissive of one of the newer Models thinking, yeah, that won't sell. Like you said you liked it, but you like that won't sell and you just put it to one side. I remember you were quite keen on the new chronographs with the date and the double date and the or triple date in the moon phase, is that right?
- [37:27]
B
Correct.
- [37:27]
A
I thought it seemed like a pretty fair, eye level relationship, to be frank.
- [37:31]
B
Exactly. So I could buy whatever I wanted. They're very supportive and that is not the only reason why we still kept the brand, but because we love the brand and we love the watches and we love what they're making and we love the direction. And we actually had the CEO of the new CEO of Zenith also being interviewed by Rob and I. We had Julian Tone the previous episode twice on the show. So it's a 360 where they're good vibes and that's why you see that brand is thriving. Now. If they would have start with the pushing and you must and you have to do this. We walk away. My brother and I am here and I have decided we really love what we do. We want to keep that joy. If that means we lose turnover and profits, so be it. Do brands do it? Yes, they do. Is it wise, Lawrence, that they do it? No. Because in the end they damage their own brand. So I hope that answers your question. Did I forget something? Rob, do you want to add something?
- [38:47]
A
I just like to add that I am a little surprised actually at the positivity in that answer. I honestly didn't know the true nature of your relationship with the bigger brands as perhaps intimately as I should. But it's great to hear that there was that respect and that there was always that mutuality in the decision making process. And I just find my mind boggled that so many big brands are pursuing this mono brand strategy and, and leaving behind the great relationships that they've fostered over the many years that you've been working with them. And I just think it's very, very strange. And I really believe the pendulum will swing back towards the old ways at some point in the future. But yeah, they might have, they might have missed the boat, depending on what wonderful things Ace goes on to pursue in the future.
- [39:42]
B
Thank you so much and thank you, Lawrence, for the question.
- [39:45]
A
Let's move on to a comment, actually, that we will in turn comment on. This is from Emiliano and Emiliano says you just heard the podcast about reference numbers. Wow. He's mining through the back catalog and the thought as to why Montblanc and Bulgari change to the SAP system is most likely due to wanting to having cloudy price transparency due to the rise of the Internet. You heard of the Internet? Alon? It's a big thing these days.
- [40:14]
B
Yeah, I've heard of it. Apparently there's something also called AI or something like that that's very menacing.
- [40:23]
A
If it weren't for our beloved team member Claris body or chatbot as some people like to call Claris, then I would agree. But we love Claris and Claris will be making a return to the airwaves very soon. When we ask her, was it a her or was it it it?
- [40:42]
B
We've. We've decided to be politically correct and call it it.
- [40:45]
A
Well, we asked it and it was a bit undecisive, but I think it went for it in the end. Okay, so we're going to get it back online and it will, I'm sure, furnish us with lots of interesting scenarios that we can discuss at length. Okay. Due to the rise of the Internet and Amazon today, most products have price transparency. Almost like the stock market, a fair market price. This has caused a lot of friction for brands because people can price shop and find the best deal possible. Making retailers resellers race to the bottom in order to capture a sale. The main method by which the Internet tracks price is via ein, UPC and gtin. So by making it harder to find the reference number slash product, there is a higher probability that someone at brick and mortar will buy an item that they like and not window shop around on the Internet. A great example of this is Invicta watch. They have a SKU0072 that is their best selling item. They've sold millions of dollars worth of this one SKU. When they began to sell this watch on Amazon, all of a sudden the brick and mortar retailers began to cry foul because Amazon was chasing the price to the bottom. So what Invikta did was create a new SKU 80072 which is the exact same item but one was for the online market and one SKU was for the brick and mortar market. So for a few years the brick and mortar and the online sellers are all very happy because there is no price comparison between the two unless you really know the brand. Alon, what do you think of this price comparison situation? I'm sure you've experienced it as a retailer when you've got customers coming in, trying to watch on at your store and then going and finding it cheaper online elsewhere. Maybe not with all of the luxury brands you deal with. But perhaps some. So give us a little bit of feedback on that. And also the strategy of brands creating false SKUs, should we say, to obscure price comparisons online versus brick and mortar.
- [42:45]
B
Thank you Emiliano, great question and interesting insight. So I want to split maybe Invicta from Montblanc and Bulgari because Montblanc and Bulgari won't sell on Amazon. Invicta apparently thrives on that because it's a massive volume brand and does a big outlet gain. Now I've experienced hands on the problems with Montreal and Bulgari switching to SAP. So I've started eCommerce. Back in 2007 nobody spoke about selling online. They didn't want to sell online. We didn't even know what ean, UPC or a barcodes or QR codes were. He just had reference numbers they've been using for decades now. The Internet obviously and big databases need a unified system. Strangely enough, both Bulgari and Mont Blanc. Mont Blanc belonging to Richemont, Bulgari belonging to lvmh. And if they would belong to the same group, they would have found out the issue by switching to the SAP's code system. It's just six digits generated at random, often starting at 100,000, so one and then five zeros. So you can guess what happened. You have duplicates in Montblanc and Bulgari and any other brand in the world that uses SAP and links their product reference number to SAP. So you'll create duplicates. The most stupid thing ever in an e commerce world, especially if Google is important for your lead generation. So I really had hands on those issues by uploading these products to our website, especially when we switch to these SAP codes. I really do not think that both BVLGARI and Montblanc did this with the same strategy Invicta might have in mind. It's sheer ignorance and sorry to say, stupidity. And I've indicated this many times at the highest level and still today, I'm sad to say they still did not change this years and years later we tried to solve this at watch base. So watchbase.com I'm a CO founder of that website and that database by enriching every product page with several references. So we use the SAP that's leading today for these brands. But Bulgari for example, internally still uses their old referencing number. So take the Bulgary. Bulgari reference always starts with BB, then the case size so that if it's 36 millimeters it's BB. 36 etc. Right? So we use that. Take IWC for example. Internally when it got bought by Richemont, they added the two letters in front of the number. So if a Portuguese Chrono was 3714 01, Richemont made it I W 3714 01. But collectors just call it a 3714. So on watch base will list IW 3714 01, 371401 and just 3714 if you catch my drift. Panderai, same issue. You have the PAM PAM and then three numbers. But then at a certain point they added two zeros to it. So to make collectors life easy we try to solve that. We're actually now moving by demand of collectors and actually insurance companies to use watch based numbers as the leading number for a particular product. Take an example of DUNS D U N S. That's a global database for companies. Whereas usually companies have a chamber of commerce number or a VIT number. It's not a unified number, definitely not globally. So DUNS is a private company that if it has vetted the company, they'll issue an accreditation and that's certified with a DUNS number. So we are now at the process of thinking of doing that with watch based also for a second reason. Some old Rolex references, old models, they don't even have reference numbers. So if you have a mix of a dial case, maybe even a bezel and a bracelet, you'll have unique combinations that don't have official reference numbers. So that is the need. So that's my two cents on the Montreal and Bulgari topic. Now for Invicta, that sounds reasonable. His hypothesis, I understand why they do it. Because Invicta has a multiple pronged price strategy. Full retail, they have retailers, they have their own E Com, they have their own mono brand, they have their own outlets. They probably dump products to great market players as well. So since it's a mass volume and an outlet game, I understand that they sell through Amazon. So there's amazing channel conflict going on. Is this a viable model? Of course not. I mean the Internet has made everything transparent. It has changed retail, it has changed society. Now with voice search and AIs not around the corner already dominating, I mean what the heck are they all thinking? So I urge everyone in the watch industry, please stop playing around, stop mucking around, stop fucking about. Let's all work to a universal product coding system and make everybody's life simple. If you charge too much and the consumers don't want your product, then maybe you should think Twice.
- [49:22]
A
So what do you think about specifically like creating a fake sku, even if everybody in the world adopted like a universal reference system, which would be great. I support your call for it. But what about the situation specifically we're discussing here when there's a model that people are finding in store maybe and then finding on Amazon for cheaper and the brand has taken the move to obscure the reference slightly. Okay, it's only a one digit. Like it's more confusing than it is completely obfuscatory. What do you think about that? Is there any argument for that? Or should the brand maybe acknowledge that if they're going to dump a product on Amazon or via gray market retailers, they should just brush it out of their core collection entirely? I mean I'd probably favor the latter, but what do you think about those two options?
- [50:15]
B
I'm with you 100%. If there is a price parity, that's your issue. Apparently it's not that wanted or not that well or you should stop selling on Amazon. And who are you fooling? You think you can fool consumers today? I mean we have image search today. Google lens is amazing. Really, who are you tricking here? You're just making a fool out of yourself. It's not a viable business model.
- [50:42]
A
I mean, I don't know. I don't know. Like I could imagine even I would be like given pause for thought if I had found a watch in a store that had 0072 as its reference and then or 80072 as it's referenced in the store and then tried to find the same watch online and I found this one. I was like oh, but there's one letter different. What is it? Is it a different iteration? Is it a different year? Has it got a slightly different functionality that isn't listed in the product specs? Which for a retailer like Amazon is totally plausible. You know, oftentimes you have essential information missing from the description. I think it would, it would dissuade me from making the purchase slightly if I would buy an Invicta.
- [51:24]
B
But let's take the example of IWC again, the 371401 evolved into the 37 1445. The only difference was instead of stamping the dial from underneath and doing a little layer of pink gold on top to applied pink gold or it's gold plated, I don't know, maybe it was massive gold may plated numbers pinned on the dial. Then it evolved I believe into the 133717 and that was with the in house caliber. So these are Evolution of models. That is logical because you can't keep one reference number the same. If there is a real difference in either design or functionality that I understand that they don't change the name, I think is a good thing. So that's how you link the evolution or the product and the evolution. We also try to track data Watch. So we often try to link these reference numbers so you know what the predecessor is, current model, etc. Regarding putting off consumers. Yeah, it's, it is, it is an issue. And I want to give a shout out to Omega. They're one of the few brands that keep a back catalog alive on their website. So if you look for old reference numbers of models that are not in production anymore, you will get a hit. On the official website it just says not in production or not for sale anymore. So I think that's a good thing.
- [53:03]
A
Yeah, that's an incredible resource and so is Watch Base. It's incredible that you're doing that work for the benefit of the consumer. But what you're describing with the iwc, that they're different models, you know, that's exactly what I would be scared that was the case when looking for Invicta 80072 and finding Invicta 0072. I'd be thinking, oh, there must be something different about the way a dial is constructed or the printing, the method of the printing even, or a font, for example. Like that's what that message sends to me. Because there is a established precursor with exactly what you're describing, these evolutions. So I think that's, it's, it's risky. Not so risky for Invicta, which is maybe the point, because they've made the decision and the, the resellers are having to deal with it because people, if they want the model they've seen in Invicta, would then mostly feel comfortable buying it from Invicta. And maybe that's their game. But it's a, it's a weird one. It's a weird strategy. I think it sort of blends and devalues the product a little too much because I would prefer it if I were a brand and I'd say, okay, we can sell our products on Amazon, but maybe not current collection products. You've then got the problem of like a retailer who's loaded up with stock they can't sell, pushing them out the back door to a gray market retailer and controlling that as a brand is almost impossible.
- [54:27]
B
Right, I agree. It's a big no, no, no.
- [54:31]
A
Okay, well, on that no, no, we're going to wrap up the show. There's probably a bit of meat left on that bone, so we might revisit that issue again. Or if anyone in the network would like us to address it further, then please just comment and let us know. Please feel free to send in your questions via the usual channels. You can contact us via email, either Robin alon or David therealtime show via the contact form on our website www.therealtime.show, or via our official Instagram handle @therealtime show. We'll be back soon with more top quality watch content, interviews, Q&As, articles and all the rest of it soon. So please, until then, stay safe and keep on ticking.