Pre-owned watch sales can be a touchy subject in some circles. It’s a market replete with fakes, frauds, and other inherent risks, but more important, it can often be a gateway to luxury watch collecting, opening doors to rare and discontinued timepieces (not to mention more approachable pricing). The watch market has been evolving quickly across the board, and a small cluster of digital retail platforms have established themselves as leaders in the category—including Crown & Caliber, a five-year-old Atlanta-based operation with a staff of more than 30 full-time employees (including Swiss-trained watchmakers). We recently sat down with its founder, Hamilton Powell, for a discussion on how the segment has grown and why more of the big Swiss watch brands should be paying attention.
In recent years, the Swiss watch industry has been struggling more than we’ve seen in a long time, though it thankfully seems to be starting a bit of an uptick. Why has the secondary market remained as consistently strong as it is today?
The retail watch market is certainly struggling. However, Crown & Caliber saw a 70-percent increase in sales from 2015 to 2016 (and expect a similar growth rate in 2017). I believe the reason is that the consumer is smarter than they have ever been. The internet has armed consumers with vast amounts of pricing information. As a result, they can see the huge discrepancy between the cost of a new watch and a certified pre-owned watch. For the same reason people buy luxury pre-owned cars, they are now buying certified pre-owned watches. It just took a company to come in and establish itself as the reputable way to do this—hence the reason we started Crown & Caliber.
Is much of the business repeat business? Why?
Yes, 22 percent of our sales are to people who have purchased from us before—and every month that increases. It is super hard to build trust in any luxury market, but especially in the watch market. We have hired some incredible talent dedicated to making sure, from beginning to end, the customer experience is unlike anything else out there. I think that is why we have seen growing repeat business.
There has been quite a bit of debate recently about how watch brands view the secondary market. How do you believe retailers like Crown & Caliber help or hinder luxury watch brands in the long run?
The brands don’t want to be in the pre-owned business. They are all about selling new watches. However, what happens to their product in the pre-owned market can affect the brand’s mainstream image. If this product is dumped on a street corner or sold on eBay, it is bound to have a negative effect on the brand. What Crown & Caliber does is maintain the brand’s integrity in the secondary market. Every watch we sell has gone through our watchmakers, who perform a 45-point inspection on the watch, verifying authenticity, accuracy, and functionality. The result is that the buyer enjoys the watch more, and therefore the brand maintains its strength in the secondary market.
What patterns have you been seeing with your buying audience?
Because we sell thousands of watches a year, we get a real unique peek into consumer demand. I would say that recently we have witnessed three distinct trends that are pretty interesting:
Women’s watches: We have seen a surge of women buying men’s watches, Panerai, Omega, and Rolex in particular. These tend to be the smaller models (41 mm and below). Personally, I think it super cool to see a woman wearing a completely respectable men’s watch as opposed to a traditional fashion piece.
Trading: The concept of trading in has been popular for years in Europe, and it is beginning to catch on here. A lot of our customers don’t want to just sell their watch—they want to upgrade. We have seen a significant increase in our trade-in business over the last 12 months.
Stainless steel: People are increasingly sensitive to wanting an understated watch. No one wants to be that obnoxious dude wearing a blinged-out gold chunk on his wrist; that’s just not cool. As a result, stainless-steel watches have skyrocketed in popularity. The brands have noticed, which is why they are producing more of them.
You recently announced a trade-in program in partnership with Bremont watches. How did this come about and what has the response been like?
We absolutely love Bremont. Over the years, we have gotten to know each other, and the founders [Nick and Giles English] are our kind of guys. They have built an incredible brand in a short period of time, and are one of the few real disruptors in the industry. We are both pretty passionate about cars and have witnessed the power of trade-in within in the car industry. It baffled us both that in the 300-year-old watch industry, no brand had ever offered a trade-in program. Customers were telling Bremont every day that they would love to trade in their old watch for a Bremont. So we decided to partner together to allow individuals to turn their old watch into a Bremont. We launched this program on May 1 and encourage anyone interested to visit a special section of our site to learn more details.
Obviously, buying a used watch comes with certain concerns. How have you seen that trust evolve in the web consumer over the years? Do you still get sent lists of questions about a particular piece before buyers pull the trigger?
The pre-owned watch industry is full of scam artists. Fake watches are now being made in China that are so good that even many trained watchmakers have trouble telling by looking at the exterior of the watch. (FYI, we have done some great videos on this.) And it’s not just fake watches you are trying to avoid. A watch can be real…but can have all sorts of problems on the inside. Water damage, inaccurate timing, borrowed parts, etc. A watch can have over 300 moving parts, so if you are buying a pre-owned watch from someone, you better trust them that they will be there for you if something goes wrong. People are more comfortable conducting business online than they have ever been. Whether it is buying groceries, office supplies, books, etc., ecommerce is obviously booming. However, when it comes to pricier items such as watches, consumers are still cautious. Our average selling price is around $5,000, which means this is a considerable purchase for the buyer. As a result, they typically want to talk to someone to ask questions, see photos, etc. For this reason, we have hired an incredible team of non-commissioned specialists to be on the other end of the phone to walk the customer through the purchasing process and answer any questions they may have. That ensures the customer experience is really great.
Crown & Caliber deals both in buying and selling, so how do you mitigate concerns from people looking to sell their watches?
Step one is a complimentary valuation of the piece you’re looking to sell via our website. Our valuation team will then query our database and determine what we can sell your watch for. We then reach out to you with two offers—one in cash and one for consignment. Whichever option you choose, we will send you packaging materials. Once we receive your watch in our secure facility, we pay you if you selected “cash.” If you chose “consignment,” we then list your watch at an agreed-upon price and pay you when it sells (typically 60 days). Our commission is 19.5 percent. Not only is this more profitable than going to your local retailer, but it’s also much safer than dealing with the unknowns of eBay or Craigslist. (crownandcaliber.com)