You Can Finally Buy a $121,000 IWC Watch Onlineby
Watchmaker dips its toes in e-commerce for the first time
Luxury timepiece producers try new avenues amid industry slump
IWC Schaffhausen timepieces costing as much as $121,000 will go on sale on Yoox Net-a-Porter Group SpA’s websites next week, as the Swiss watchmaker tests whether online shoppers might help pull it out of an industry slump.
The Net-a-Porter and Mr. Porter fashion sites will offer models including the Portofino and Portugieser in YNAP’s most expensive watch collection yet, according to Federico Marchetti, chief executive officer of the online luxury retailer. Switzerland’s Richemont owns IWC as well as a minority stake in YNAP.
After an initial reluctance due to the high price tags, Swiss watchmakers are increasingly dipping into the $34 billion luxury e-commerce market as exports have declined for 15 straight months. This is IWC’s first online foray, catching up with companies such as Hermes, which sells $25,000 timepieces on its website, and LVMH, which hired an executive from Apple Inc. to lead its digital push. YNAP expects the alliance may help attract more watch brands to join its sites.
“IWC is the first watch brand that is going to bring the hard luxury category to the next level,” Marchetti said in a phone interview. The company’s success in selling $25,000 Valentino handbags and Pomellato jewelry has shown there’s demand for such products, he said. “There’s no resistance on price.”
YNAP’s watch and jewelry sales are expected to reach 100 million euros ($110 million) by 2020, Marchetti said. The highest priced watches on Mr. Porter’s site so far are brands such as Zenith and Bremont that sell for more than $20,000.
Another reason why Swiss watch brands have been slow to embrace e-commerce is that typically clients want to try on the products. The industry gets less than 2 percent of sales through direct e-commerce sites, estimates Rene Weber, an analyst at Bank Vontobel.
Richemont helped form the Milan-based online retailer by merging its Net-a-Porter unit with Yoox last year. Sales of luxury goods online have increased 77 percent from 2011, according to researcher Euromonitor.
A Deloitte survey in September showed that, for the first time, Swiss watch executives plan to expand more in e-commerce than in other channels such as their own stores. Richemont Chairman Johann Rupert last week said all its brands need to boost online marketing as he overhauled management amid a 43 percent profit decline.
YNAP reported organic sales growth of 19 percent in the third quarter, with revenue reaching 435.4 million euros.
“Watchmakers are becoming more open to the idea of e-commerce,” YNAP’s Marchetti said.