Industry stalwart David Coleridge has challenged watch brands not to ‘kill’ the UK consumer amid recent price hikes and ongoing concerns over currency volatility.
The Watch Gallery chairman’s organisation is among those that have benefitted heavily from UK purchases becoming cheaper for tourists over the past six months.
Its sales are expected to be up more than 40% on the previous year after last summer’s “perfect storm” when the dramatic fall of the pound led to overseas shoppers, especially from the Middle East, snapping up watches at favourable prices.
But 60% of The Watch Gallery’s sales are from domestic shoppers and he fears that customers could be discouraged by rising price points.
“The challenge for the brands is not to ‘kill’ the UK consumer. Some brands haven’t put up prices at all, some have increased once, and some twice. As the Swiss exports data states, the UK market is growing strongly, and the brands need to consider first the UK consumer, and secondly the tourists. Our business will never just be selling to tourists. If you are selling to a UK consumer and you put the price up 20-25% inside six months, then that consumer is going to be put off. Naturally retailers will support the brands which consider the UK consumer.”
Mr Coleridge suggested that watch consumers remain sensitive to price increases and that brands need to be consistent in their decisions.
“Price differences [caused by currency fluctuations] around the world are here to stay and if brands spend their entire lives trying to adjust prices in every market to keep them in line, then all you will do is antagonise local consumers. It’s worth noting brands are never as quick to put prices when currencies move the other way.”
Brands need to market in each country, and they need to control their businesses in each country so that they don’t have excess stock in the secondary market, added Mr Coleridge.
“The UK market is, I think, a very clean market, in general, so a small price difference here need not be a concern to the brand,” he said.
The full interview with The Watch Gallery’s David Coleridge can be read in the February issue of WatchPro.