“Vacheron Constantin is offering a phone sales service to United States clients beginning this week,” watchpro.com reports. “Clients can speak with advisors before selecting and purchasing their timepiece of choice over the phone. They can then pick up their watch at a nearby boutique, or receive a personalized package to their homes.” For Vacheron authorized dealers, this means war!
Obviously. The corporate mothership’s decision to sell directly to customers cuts authorized dealers (AD’s) out of the loop. Oh sure, if the buyer picks up the watch ordered from VC at a boutique, the Swiss watchmaker will throw the AD a bone. But it ain’t gonna be the 40 percent markup an authorized dealer pockets when they sell a VC. Far from it.
Worse – for the bricks-and-mortar brigade – Vacheron will have the customer data. They’ll hit up customers with new product announcements, service and sales via mail, email, phone, text and social media, DM and smoke signals. From the dealers’ perspective, Vacheron’s concierges will be stealing customers.
Needless to say, Vacheron Constantin Americas President Leslie Kobrin’s concierge presser glides right over the assault on ADs’ livelihoods.
We know our loyal customers return to Vacheron Constantin not only for finely crafted timepieces but also for superior service. Our concierge team and boutique sales associates are at the heart of our organization, ensuring the highest level of service for customers, now over the phone or in-person.
The role of our US concierge team and flexibility of our boutique associates has never been more important. We’re therefore delighted to be introducing new ways to purchase a Vacheron Constantin timepiece.
VC’s AD’s aren’t so delighted. Or surprised. “Vacheron sponsored a customer evening at our store,” an East Coast dealer told me. “Leslie was there, handing out business cards, telling guests to call her directly if they wanted to buy a watch.” The dealer was not happy, but – “I’m no dummy. I didn’t invite my existing Vacheron clients to the event.”
Notice the word “my.” Vacheron authorized dealers know that their customer list is their business. In a very real sense, they own their customers. They’ll share that data with Vacheron around about the time Hell freezes over. Even so, Vacheron’s concierge service makes them vulnerable to pre-emption.
At the same time as they’re launching their concierge service, Vacheron is opening company-owned monobrand stores (Toronto boutique above), where they can pocket that 40 percent markup (albeit carrying all the costs of doing business). Will VC favor their own stores for customer pickup?
Another issue: Vacheron’s big budget advertising. The watchmaker can lure new customers to their concierge service as the first point-on-contact, data capturing customers “upstream” from their dealers. Click here or call this toll-free number to be connected to your personal concierge.
And it’s only a matter of time before Vacheron follows fellow Richemont brand Jaeger-leCoultre’s data capture scheme: six years of additional warranty coverage (eight total) in exchange for their deets.
Needless to say, Ms. Kobrin spins VC’s Concierge service as a mutually beneficial team effort to give customers better sales and service. A rising tide lifts all boats and all that. Vacheron knows they’re in the look-and-feel business. According to industry consultant gaelparfaite.com, 48 percent of luxury buyers prefer to shop with a brand that has a physical store. Yes but –
Luxury customers don’t start shopping at the store. Thirty-three percent begin their purchase at the brand’s website. If VC can get ahold of shoppers before they get to the authorized dealer, they can carve off a big ‘ole piece of that 40 percent markup. All of it if they can home deliver the watch.
What can Vacheron authorized dealers do to fend off corporate usurpation? What they do best: build and maintain face-to-face, multi-generational relationships. There’s nothing to stop a Vacheron authorized dealer from providing the exact same “concierge” service as their Swiss supplier, exploiting web browsing, text, email, phone, social media, home delivery, etc. to stay closerthanthis to their customers.
VC dealers also carry other watch brands. They have more “in’s” to initiate customer contact. And let’s not forget the fact that a Vacheron authorized dealer can discount watches and negotiate financing (e.g., lay-away and no interest payments). Vacheron Constantin has to charge full whack – lest they initiate a damaging price war and trigger a dealer revolt – and abide by strict corporate practices.
In this war between Vacheron Constantin and its authorized dealers the customer wins. Competition between the Swiss watchmaker and its brick-and-mortar representatives will help insure “the highest level of service for customers.” But the danger to VC and the rest of the Richemont stable is real. Cutting out dealers – expropriating customers – could lead ADs to ditch VC to rep other brands. It could well be a case of killing the goose that lays the golden eggs.