Business ideas: Online watch shop
With watches finding favour as a fashion accessory and smartwatches reinvigorating the market, consider starting a watch e-commerce site this year
Watches have come a long way in their half a millennia history, from clockwork to vibrating quartz crystals and inevitably to digital. What’s more, they’ve made the transition from a functional item to a fashion accessory and even a status symbol.
Though the ubiquity of smartphones and financial crash caused some recent stagnation in the watch market, research from Mintel revealed that UK sales hit £1.1bn in 2015 and rising.
Now with Apple and Samsung’s smartwatches redefining what a watch can be, diversification, deeper pockets and uptake by the younger generation could see the sector re-invigorated in the next few years.
With watches continuing to evolve and sales soaring, 2016 could be an excellent year to launch an e-commerce site trading in timepieces…
Starting an online watch shop: Why it’s a good business idea
Although scepticism of new technology has resulted in slow initial sales of smartwatches – 6% of Brits currently own one – Mintel’s research found that 21% would be interested in buying a smartwatch in the future, with this figure rising to 28% for 25-34 year-olds.
With the Internet-of-Things (IoT) increasingly becoming part of our everyday lives, smartwatches are sure to benefit as consumers are turned on to the convenience of controlling everything from their wrists. Nowhere is this more evident than with contactless payments, with 25% of consumers stating that they would use a smartwatch to pay for goods in a store.
The report also found a direct link between affluence and watch ownership, with 81% of households with an income over £50,000 owning a watch compared to 65% of those with an income of under £15,500. As the economy continues to improve, watches are likely to see uptake amongst younger consumers looking for a fashion accessory or status symbol; over a quarter of Brits have said they would wear a watch as a fashion statement.
Watch sales aside, e-commerce is gaining popularity thanks to our increasingly busy lifestyles and use of smartphones – mobile shopping is expected to account for 59% of all e-commerce by 2020 according to Euromonitor. The luxury market in particular is already benefitting from growth in internet retailing, driven by consumers looking for bargains on luxury goods.
‘Made in Britain’ watches will also benefit from their heritage appeal with affluent consumers in Asia and the Middle East. Exports from British firms to these areas continues to increase, with China now the UK’s sixth biggest export market having grown by 12% to £13.9bn in 2014.
Online watch shop business opportunities
The watch market spans a huge range of prices, styles and functions, from statement pieces to tough and dependable military grade options and watches designed especially for deep sea diving.
The simplest option is to start a site selling the wares of established brands rather than to invest in developing your own. Specialising in selling a particular type of product will help you find a foothold and stand out in a relatively crowded market.
William May, a 200-year-old independent purveyor of jewelry and watches that’s moved into e-commerce, sells both new and pre-owned luxury watches including classic Rolexes for upwards of £13,495. The high-end market isn’t the only way to make money selling watches, there are also good opportunities at the mid-range and even discount end of the spectrum.
Starting your own brand from scratch is a complicated and expensive process, but provided you’re prepared to put the work in and carve out an interesting niche it can also be the most rewarding.
Henley-on-Thames-based Bremont launched 14 years ago, creating hand-made British pilot’s watches in limited numbers and now exports its wares from Shanghai to the Caribbean and San Francisco. Capitalising on its ‘Made in Britain’ tag and nurturing shared values with the country’s history of aviation and watch making has helped increase its appeal with global customers.
It’s now easier than ever to find and import component from all over the world, but it’s worth noting that The Swatch Group, the world’s biggest watch manufacturer, started to withdraw its supply of mechanical movements to competitors in 2014 and is expecting to cease sales completely by 2020. While many small and medium-sized manufacturers rely on these movements, which literally make watches tick, this could represent an opportunity to develop in house movements and become a supplier.
Jonny Lomax, e-commerce manager at William May, discusses how to stand out in the world of internet watch retailing:
“It can be hard to stand out from the crowd and you may be tempted to lower your prices in order to beat the competition. However the luxury market can't always be won over with a bargain; customers want quality and expertise.
“Being able to approach a website and see a detailed explanation of each piece, as well as a dedicated point of contact to ask any further questions, is vital to the customer journey. A cut and paste item description just won't do and it ruins the experience for shoppers. Tactics like this may work for the fast-paced world of e-commerce, but it certainly doesn't for luxury watch retailers. It's all about creating a rich and enjoyable experience online.”
Andrew Jennings, CEO at Larsson & Jennings, adds:
“A key element in maximising our presence online has been engagement with influencers and bloggers. By connecting with the right people, who embody our brand identity and are recognised influencers for our target audience, we’ve been able to connect with the right people and drive sales.
“Price becomes even more important when retailing solely online. Asking people to part with thousands of pounds on a watch they haven’t seen, touched or tried on is a tall order and not something I’d recommend. Fortunately with our more accessible price point, a partially online business model works.”