Responding to Coronageddon, Patek Philippe dealers worldwide have launched “Temporary E-Shops.” Housebound customers can now order their five-figure-and-up timepieces online from an authorized dealer and have their treasured timepiece shipped straight to their door. Not all dealers are in, but most are. And all of them . . .
are listing their watches at full retail. Which makes sense – Patek doesn’t want its dealers to start an online price war, triggering a race to the bottom, devaluing the brand.
That said, I’m sure you noticed that bit about “associates available for chat immediately.” That opens the door to exactly that: price negotiations. I’m equally certain Patek Philippe dealers are ready to play ball – a lot more than they were pre-Coronageddon.
Patek’s ADs are sitting on significant inventories – the retail crash came without warning. Between lockdown and now, they had no way to sell their watches. And they really need to sell their watches. The AD’s occupy some of America’s ritziest real estate. Doors closed or not, the landlord’s ringing their front door bell.
usa.watchpro.com reports that Patek Philippe has “relaxed” dealers’ payment terms on invoices to relieve pressure on their cashflow. Enabling online sales helps on the other side of the ledger.
Long term, online sales could bite the dealers in the ass.
Patek Philippe produces an estimated 60 thousand watches per year. As of this month, they’re making exactly none. Once the corporate mothership’s current inventory is gone, it’s gone. It’ll take months to spool-up production, as and when.
Depending on how fast demand returns, Patek dealers’ online stock clearance could lead to a severe shortage down the road. Which would jack up prices. But that’s not happening now. Definitely not now. As speculators cash in their chips and the hard-up look to raise cash, pre-owned Pateks are streaming into the market.
Patek Philippe dealers’ online sales are a harbinger of the previously unthinkable: prices dropping at the top end of the traditional watch market. Patek dealers online sales will speed up that process, increasing supply at a time when demand has cratered.
Will Audemars Piguet follow suit and let authorized dealers sell their watches online? Vacheron Constantin? Piaget? Breguet? Blancpain? Bulgari? A. Lange & Söhne? Rolex?
With their high-priced boutiques shuttered for the indefinite future, a betting man might say the odds are good, and getting better all the time. And you can bet their execs are making some calls this morning. Watch this space.