The United States has not yet gone so far as to shut down all non-essential retailers across the country, but it is starting to happen with San Francisco and the Bay Area imposing a curfew through to April 7.
Germany, France, Italy and Spain have gone the same route, and it is reasonable to assume the rest of the US will be asked to go the same way, and that would mean closure of all jewelers and watch shops.
A number will already be taking that decision as a means to protect their staff.
The only income after a lock-down will be from e-commerce, and there is anecdotal evidence that this could rise significantly as people are forced to self-isolate in their homes.
Rolex and Patek Philippe prevent their authorized dealers from selling watches online. Other brands, such as Audemars Piguet, have restrictions on most models so that the likes of Watches of Switzerland and Bucherer, Europe’s two biggest retail groups, have to invite people to their stores to buy these bestselling brands.
I have little insight into the technicalities of turning on the ability to “add to basket” for these brands but, if the Rolex policy were lifted today, I would wager retailers would be closing deals online this week.
After all, 53% of revenue at The Watches of Switzerland Group comes from sales of Rolex watches. A group with overheads on the scale of this $1 billion giant needs to find a way to keep selling those watches.
Ecommerce is going to be critical in the coming months, and there is reason for optimism as the watch industry has a few crucial strengths.
First, it has phenomenal brands. This is vital to maintain discretionary spending through highly uncertain times. There are millions of people who dream of owning a TAG, an Omega, a Rolex or a Cartier. Perhaps now is the time to give themselves that pick-me-up.
Secondly, in the case of many brands, there are more customers than watches. For the likes of Rolex, Patek and AP, this stretches across entire collections. For others, such as Hublot, TAG Heuer, and Omega, it applies to limited editions. Many retailers have waiting lists for a surprising number of references. These can be sold online and they can establish safe ways for customers to click and collect.
Thirdly, we are in the celebration business. Birthdays, anniversaries, graduations and other life landmarks will not stop, although big parties might (freeing up budget!).
Finally, I would back the great retailers I speak to every day to find a way to keep delighting customers. This is in their DNA and in the bones of their staff. They will take every opportunity and advantage they can find.
Retailers will make their own changes, but it will help the industry as a whole if the biggest and most popular brands like Rolex work with them to keep sales coming in.