It may be the elevation of classicist Boris Johnston to the post of UK prime minister that nudged open the the nook in my mind where a handful of Latin phrases are stored, but the expression sine qua non — without this, nothing — popped into my head while reading the wisdom of Hamilton Jewelers’ CEO Hank Siegel and retail guru Doug Stephens.
In the case of Hamilton Jewelers, the conversation in our Big Interview turned to the value of ecommerce and the investment the company is making into digital tools for customer relationship management.
Doug Stephens, author of the book Reengineering Retail, describes the importance of measuring the marketing impact of a brick and mortar store, and not only its direct contribution to a company’s top line sales and bottom line profit.
In their own ways, both experts make the same point: there is continuous investment needed in order to be a successful retailer today that simply cannot be ducked. And the reality is that the level of investment to simply stand still today is much, much greater than ever before.
For example, Watches of Switzerland expects to spend $15 million this year on UK store refurbishments, and an additional $25 million transforming the Mayors business in the United States.
Bucherer has already spent a fortune getting ready for the refurbishment of its New York Time Machine flagship and will spend millions more before it reopens late next year.
Every independent WatchPro has interviewed this year, including Hyde Park Jewelers, London Jewelers, Hamilton Jewelers and Manfredi, are all pouring fortunes into upgrading their physical presence and digital platforms.
Part of this is driven by the biggest brands and their parent organizations demanding more and more from their partners.
If you want to sell watches on behalf of the biggest brands at Swatch Group, LVMH, Richemont or Rolex/Tudor, you will need a prime location, sufficient size and the money to fit out and refurbish the store every few years. Gone are the days when a bit of minor maintenance would keep a showroom up to snuff for a decade or two.
Despite numerous attempts to build ecommerce empires without physical stores for luxury watches, none have come close to challenging businesses with great showrooms in A1 locations.
That is not to say ecommerce is not another essential. Even though Rolex and Patek Philippe watches cannot be sold online by authorized dealers, retailers will fail unless their customers can find watches they want online, research their features and styling, and check prices.
Even though most will still go into stores to try on watches and get advice, the journey starts online and a retailer that cannot accompany customers on that journey is doomed.
Digital marketing via social media, SEO, ad words, etc, is an unavoidable cost or customers will find competitors that have invested in the latest tools and techniques.
This is all staggeringly expensive, which is why we are seeing so many store closures from major multiples and smaller independents going under.
It is also driving consolidation with mergers and acquisitions leading to fewer but larger groups that can afford the very best locations, systems, staff and shop fits.
Expect this to continue because businesses that cannot make the investment required by the best brands and demanded by today’s customers will not survive.
Sine qua non, I fear.