Thought I'd join in on the conversation finally, after reading (I think) the entirety of this thread and enjoying it immensely. I particularly enjoyed the Rolex discussion that was had over the last 25 pages or so. My own Rolex purchase was preceded by my moving through all 3 stages of thinking about Rolexes as mentioned by the forbes article posted here a while back. In the end, prompted by a desire to own a watch with dual time zone functionality and the feeling that I could wear it anywhere, I ended up with an 116710. Obligatory wrist shots below (please excuse the crappy phone pics):
On another note, I wanted to weigh in on the brand exclusive boutique business model that's been discussed recently. I apologize in advance for the length and detail of this post.
Congrats on your GMT. Great choice for a dual timezone watch! Also very interesting evaluation of boutiques, pricing etc.
I definitely agree with most of what you said. And I guess a little bit of competition never hurt anyone, especially when the customer can make an informed decision based on various factors, i.e., price, service, relationship with the dealer, etc. I agree that there is never going to be a change in price structure that will create what I termed "an accurate reflection of value." Warning: Spoiler! (Click to show)
I guess what I said was a bit of a misnomer. Let me phrase it in the alternative. I wish there was a change in price structure such that there was not such a huge discrepancy between price and value. Perhaps some examples would illustrate better what I am attempting to say, because I feel like I may have been a bit cryptic (I blame it on the 'hurriedness' of my last post). I also think that the below analysis is better applied to the 'mid-level' luxury tier, perhaps the $4,000 - $10,000 range.
I think what I find perturbing is the huge discrepancy in what people pay. When one person walks out of an AD paying $3,500 for a watch with an MSRP of $5,000, and I walked out paying $4,500, I cannot help but feel that I was being swindled. I cannot help but wonder, "is $3,500 the lowest? Could the AD have been pushed to $3,000?" I find it a little bit confusing I guess. That is one aspect of Rolex's pricing structure that I really appreciate. I like the fact that most Rolex ADs do not discount. When I think of the Submariner, I automatically think of a watch that is $7,000. And honestly, I think it is appropriately valued at $7,000. I know that Rolex tends to get bashed for being overpriced, but I find satisfaction in knowing that I paid the same amount as everyone else did.
In contrast, I think Omega has some issues in this regard. The Speedmaster retails at about $4,500, and I bought mine for far less than $3,500 from a certain AD. That same AD had the new 8500 models for less than $4,000 retail. What does that say about how much the watch is actually worth, if both the AD, and the Manufacturer can profit off of an item that has already been discounted by ~25 percent? I am not saying that this pricing strategy is good, or bad... I am just saying that I find it a bit disconcerting.
For the sake of example, lets take IWC. The new Ingenieur is going to be retailing for, I believe, $6,600. This is a watch with a ETA 2892 movement, and has half the antimagnetic fortitude as its predecessor. I cannot help but wonder what is going into the watch that makes it $6,600. And yes, I know the standard refrain, veblen good, luxury market, etc. However, Cartier has come out with the Tank Solo XL with an ETA movement for $3,500, and in my opinion, is a brand with as great of a provenance as IWC. The JLC Master Control comes in at around $6,800, and features a wonderfully finished in-house movement, and is superbly finished. I guess I am just confused?
I think certain brands have begun to enact pricing structures that, although they do not accurately reflect the value of the watch, are certainly on their way to better reflecting the value of the watch. Brands like JLC, GO, and even Cartier, have really surprised me as of late. I think some of the upper tier are also 'fairly' priced. I wish that there was a little more transparency, less price variance (or more brand control), and less price gouging. As you noted... some of this is just plain greed. And I feel like it is not a good thing when your customers start to develop the perception of your brand as greedy. The problem, I guess, is that most of these brands are just not catering to 'WIS.'
There is a difference between strict pricing strategies and perceived value of an item.
With regard to your discussion comparing Rolex's strict pricing vs. Omega and variations in price, I can see that everyone can feel good about getting the same deal for the same item. You mention feeling swindled if you pay $4,500 for a watch and someone else got it for $3,500. However, some of that can also be based on location. I am going to presume a big name store with prime real estate in NYC will have much higher overhead (rent, taxes, insurance, etc) compared to dealer in a small city or in the suburbs of say Ohio. Hence, would you feel swindled if you knew the dealer in Ohio could sell the watch to you for $3,500 but he decided to hold the line on price with other stores in NYC. Hence his profit is now better than those of a NYC store? To be honest, I've never bought a watch in NYC. Great place to window shop, but unless I am buying a watch that I know no ADs discount, I've ALWAYS been able to get a much lower price buying from ADs in suburbs than any price a NYC AD gave me. So if someone does their homework, or can get the name of an AD that has better pricing than some of the big stores, why shouldn't one be rewarded? Just playing devils advocate.
As for your discussion regarding IWC vs. JLCs...that seems to be about perceived value and thats very subjective. Is an IWC with a modified ETA movement worth as much as a JLC with an inhouse movement? IMHO, not really, but others will say yes it is...even if its just because they like the design. To me there is a big difference between essentially throwing an average movement in a case, doing a little movement decorating vs. building the entire watch and movement. Other than style is an IWC Portugese Chrongraph that different from say a Monte Blanc Chronograph, or an old automatic Omega Speedmaster or any other watch powered by a Val 7750? To me thats largely an issue of the value you personally assign to a watch. Someone might value overall design more than the movement that they might rarely see or only see in photos. My Dad actually went to an AD looking for an IWC, but ended up getting a JLC. Why...because the sales person said, look IWC is a good product, but once you are spending a certain amount on a watch, a JLC is higher quality and you are getting a movement made in house rather than Valjoux 7750 with some slight mods (mostly in terms of decoration).
In the end, I think most buyers have purchased a watch for more than they should have, and gotten good deals on a few watches too. However, the real measure of the value of a watch is how you feel after you've owned it for a while. Does it have the qualities that make it a keeper or does it lose its appeal once the newness wears off.