Bling For Your Buck: Cash In On Your Watch Department

p>Watches used to be a surf-retail afterthought. They were shoved into a corner of the glass case next to wallets, Hacky Sacks, hemp necklaces, and sterling silver rings with waves etched around the band. It was not a pretty sight.

At first it was just Freestyle, which kicked it all off in 1982 with its now-famous Shark digital surf watch. (Who didn’t have one of those?) But gradually more players jumped in — brands like Animal, Spoon, G-Shock, Rip Curl, Rusty, and Quiksilver. Some brands went under, some stopped offering watches, others flourished.

Then in August 1998, Nixon entered the market with a line of fashion-driven watches and changed the way retailers, manufacturers, and consumers viewed watches in surf shops. It opened the category, and suddenly customers were going to surf shops to buy a watch, period. Watches had become a legitimate category in surf shop.

“Nixon has actually helped us in the watch business by drawing more people into {shops},” says Rip Curl Product Manager Tim Kobetsky. “It’s made us open our eyes. We think, ‘Surf, water watches — boom, it’s gotta be all surf related.’ And now we’ve opened our eyes that we can sell a piece that will go in the water, but still it’s a fashion piece at the same time.”

Adds Brett Ritter, Freestyle brand manager, “The competitition comes in and helps expand and grow the pie so that everybody’s slice gets bigger. So it’s been nothing but good.”

But how can retailers get a bigger share of the pie? What should they be doing to get more bling for their buck? We talked to a number of leading watch brands to find out the category’s peak seasons and key pricepoints; what shapes, styles, and colors will be big for summer and holiday; and we uncovered some basic retailing strategies every surf shop should employ to grab a bigger slice of the pie.

Tides Have Changed

The watch business is changing. Customers are buying watches year-round, and they’re not just looking for tide watches anymore. In fact, the majority of them are looking for a basic unit that tells time and looks cool.

“This is the first season I’ve ever seen my sales in dollars higher in fashion than in tide {watches},” says Kobetsky. “It’s really coming on strong for us right now.” Over the past two seasons Rip Curl has focused a lot of its energy on its fashion watches. Its line — which has more than 200 SKUs — is split 50-50, fashion and function.

“There does seem to be a movement toward simple functions, which I guess can be interpreted as a trend toward fashion,” says Nixon Cofounder Chad DiNenna. “Our best-selling watches aren’t the ones that have all the tech features, they’re the ones that deliver the simple features the best way.”

Freestyle has revamped its marketing campaign to showcase its fashion-oriented pieces. “Freestyle has always been know for quality, durability, and the water watch — a watch you could wear in the water,” says Freestyle Marketing Manager Monique Evans. “We’re trying to reposition the brand so that it’s not just a watch you’re going to wear in the water. It’s the watch you’re going to wear day to day.”

Though the watch business is steady, there are a couple of key times where sales usually spike — namely holiday and late spring. “Our business is very stable,” says Ritter. “It’s not tremendously seasonal. We find that we have a little bit more going out the doors on 2/15 {for spring delivery}, just because the whole nation is coming out of winter.”

Manufacturers often release new products to take advantage of these key times — some on a more rigid schedule than others. Rip Curl launches a new line like clockwork: once every six months.

“We pretty much do 50 percent all new line,” says Rip Curl Sales Rep Chad Navarro. “We’ll carry over from the prior season 50 percent of the top sellers, and then there’ll be 50 percent of a new line. There’s always new product.”

Billabong has a more flexible timeli. “We’re not on a rigid schedule,” says Mark Machado, Billabong vice president of design. “The watch business makes those {fashion} swings, and they can last six months or they can last three years. Our intention is to follow the watch business and to be there when it’s happening — not to release things for the sake of releasing a new product or take things out that are still working. The one thing you don’t want to do is get yourself into a cycle where every six months you’re obsoleting your product line.”

A well-rounded line incorporates product at a variety of pricepoints. For watches, the pricepoints run from 40 dollars all the way up to a 1,000 dollars for a Rip Curl titanium Tidemaster. On average, key pricepoints fall between 60 and 90 dollars. This number is smaller than in previous seasons because lower-pricepoint fashion pieces are gaining ground.

“Pricepoints that retail well are between 40 and 80 bucks,” says Machado, who helped launch the Billabong’s watch program in the States last year. “Anything over 80 bucks starts to become a significant purchase.”

Freestyle’s best-performing pricepoints run slightly higher, however, at 70 to 80 dollars. Rip Curl’s key pricepoints are 70 to 100 dollars, and Nixon says its sweet spot is 90 to 150 dollars.

“The price levels retailers can support are directly related to the quality and quantity of information their salespeople have about the product,” says DiNenna. “Employees need to know how to communicate this information and be confident when selling a product that costs more than the average. If you get comfortable selling a watch for 50 dollars, then you will think a 100-dollar watch is really expensive.”

Manufacturers note that higher pricepoints do better around the holidays and at graduation time. “That’s when the majority of my high-end watches move,” Kobetsky says. “The kids go into surf shops, they see it, they want it, but they can’t quite afford it. So that’s the first thing on their list.”

In Style

Pants have lost their toggles. Shoes have lost their synthetic fabrics and contrasting color hits. Are watches following this trend? Are they toning down, getting less technical, and more retro?

Yes. Sort of.

Kids are leaning toward fashion watches with clean designs, but multifunctional tide watches are still chugging along. Wide leather cuff bands are coming on strong, but metal bracelets are still hot. Those 70s-inspired oblong dials are big, but round ones will continue to win at the register.

The most noteworthy change in watch trends is leather. Rip Curl’s leather-clad Bondage watch has been its best-selling piece lately. “Leather’s happening worldwide,” Kobetsky says. “Leather was completely gone three years ago — it simply vanished because {leather} was so conservative. Now it’s come back. It’s got the 70s look.”

Machado agrees: “Metal’s still really important, but leather is trending in quite strongly. This is good and healthy for our watch business because leather-type products are not necessarily surf-type watches. It’s a fashion piece that guys are buying.”

So are small, thin dials just around the corner? “No,” says Machado. “If anything they’re getting bigger.”

Navarro concurs: “Kids like the blinb-bling thing.”

For guys, popular colors continue to be on the conservative side — black, navy, and silver. But a few edgier colors like red or champagne do well for some brands (and if anything, they draw attention to the displays). Additionally, earth tones like brown and khaki are gaining ground — just like they are in footwear and apparel.

Girls buy on a more adventurous color palette, however. According to Brian Beare of GMT Corporation (the watch license for Quiksilver and Roxy) silver, lavender, and light blue are some key colors for juniors’. Red, he says, is trending but won’t last. Machado sees pinks, blues, and greens as the popular colorways.

Even with the influx of leather bands and the capsule-shaped watches that go with them, round dials continue to be the top seller. “Round is still the best,” says Beare.

Other trends include the use of rubber and a rise in interchangeable bands.

Dialing It In At Retail

Customers view watches as an investment. They might purchase them on a whim, but they want to be confident the watch they’ve picked from the dozens of possibilities is the one that best fits their needs. The key to instilling confidence in customers, manufacturers say, is through merchandising, product selection, and above all product knowledge.

Knowledge is the common denominator between a successful shop and a happy customer. “The more educated a retailer can be about any product the better they’re going to do with their customer base,” says Ritter. “That’s the whole drive and heart and soul of specialty retail. Otherwise {customers} can just go to a department store or a Costco-type warehouse.”

DiNenna agrees, adding, “If you are selling a 200-dollar watch, your employee should understand how to change a link or how to set the watch for the customer. It’s comparable to selling a pair of shoes and not knowing how to lace them for the customer.”

Many companies like Freestyle and Rip Curl offer clinics that teach employees how to operate — and ulimately sell — the watches. “If somebody comes up with a watch and you don’t know how to work the thing, you don’t even want to get near that customer because you’re afraid you’re going to be asked how to operate it and you don’t know how,” says Rip Curl’s Navarro. “{Clinics} give these guys a lot of energy and info on the product and now they know how to sell it.”

There isn’t a magic recipe for ordering, but it seems like safe is better than sorry when it comes to sell-through. “Like most products there is an 80-twenty rule,” says DiNenna. “The attention-getter is the twenty percent, and the money product is the 80 percent. You need to identify your 80-percent products and maintain an inventory position in those styles. Trust your rep as a business partner, and let him help you identify the key styles you should never be without.”

Good merchandising is crucial for a successful watch program, and manufacturers are eager to help. “I think the biggest thing retailers could do is take advantage of manufacturers’ desires to give them a branded presence and create a shop-in-shop,” says Ritter. Like many brands, Freestyle supplies retailers with displays, signage, banners, and custom graphics.

Navarro says manufacturer-supplied displays boost sales by drawing attention to the product. “It’s vital for us to have our own cases,” he says. “If they don’t, it gets lost under a counter with a bunch of jewelry and you can’t see it. Once you get a case in there the volume will triple over night. It’s that simple.”

Nice Package: Good things come from small packages.

In no other category is packaging more important than in watches. Sometimes, what the watch comes in is just as big a selling point as the watch itself — particularly for girls.

“Packaging is huge,” says Kobetsky. “If you can’t get a case in the shop, or if it’s going to be sitting isolated where there isn’t staff to manage it properly or pull it out of a case immediately, it’s gotta be able to sell itself.”

Adds DiNenna: “Knowing the store employee might not be a watch tech, we still want to tell the customer all the great things in the watch, so we do the next best thing to telling them ourselves — we let the packaging tell them.”

Manufacturers roll out new packaging as often as they do new product. “As a product manager, I get tired of looking at the same thing,” Kobetsky says. “Not only do I need to see a new watch, but I need to see a new case and a new box as well. Well, the retailer and the floor staff is the same way. They want to see fresh stuff, fresh colors, fresh product. Otherwise it gets f leather bands and the capsule-shaped watches that go with them, round dials continue to be the top seller. “Round is still the best,” says Beare.

Other trends include the use of rubber and a rise in interchangeable bands.

Dialing It In At Retail

Customers view watches as an investment. They might purchase them on a whim, but they want to be confident the watch they’ve picked from the dozens of possibilities is the one that best fits their needs. The key to instilling confidence in customers, manufacturers say, is through merchandising, product selection, and above all product knowledge.

Knowledge is the common denominator between a successful shop and a happy customer. “The more educated a retailer can be about any product the better they’re going to do with their customer base,” says Ritter. “That’s the whole drive and heart and soul of specialty retail. Otherwise {customers} can just go to a department store or a Costco-type warehouse.”

DiNenna agrees, adding, “If you are selling a 200-dollar watch, your employee should understand how to change a link or how to set the watch for the customer. It’s comparable to selling a pair of shoes and not knowing how to lace them for the customer.”

Many companies like Freestyle and Rip Curl offer clinics that teach employees how to operate — and ulimately sell — the watches. “If somebody comes up with a watch and you don’t know how to work the thing, you don’t even want to get near that customer because you’re afraid you’re going to be asked how to operate it and you don’t know how,” says Rip Curl’s Navarro. “{Clinics} give these guys a lot of energy and info on the product and now they know how to sell it.”

There isn’t a magic recipe for ordering, but it seems like safe is better than sorry when it comes to sell-through. “Like most products there is an 80-twenty rule,” says DiNenna. “The attention-getter is the twenty percent, and the money product is the 80 percent. You need to identify your 80-percent products and maintain an inventory position in those styles. Trust your rep as a business partner, and let him help you identify the key styles you should never be without.”

Good merchandising is crucial for a successful watch program, and manufacturers are eager to help. “I think the biggest thing retailers could do is take advantage of manufacturers’ desires to give them a branded presence and create a shop-in-shop,” says Ritter. Like many brands, Freestyle supplies retailers with displays, signage, banners, and custom graphics.

Navarro says manufacturer-supplied displays boost sales by drawing attention to the product. “It’s vital for us to have our own cases,” he says. “If they don’t, it gets lost under a counter with a bunch of jewelry and you can’t see it. Once you get a case in there the volume will triple over night. It’s that simple.”

Nice Package: Good things come from small packages.

In no other category is packaging more important than in watches. Sometimes, what the watch comes in is just as big a selling point as the watch itself — particularly for girls.

“Packaging is huge,” says Kobetsky. “If you can’t get a case in the shop, or if it’s going to be sitting isolated where there isn’t staff to manage it properly or pull it out of a case immediately, it’s gotta be able to sell itself.”

Adds DiNenna: “Knowing the store employee might not be a watch tech, we still want to tell the customer all the great things in the watch, so we do the next best thing to telling them ourselves — we let the packaging tell them.”

Manufacturers roll out new packaging as often as they do new product. “As a product manager, I get tired of looking at the same thing,” Kobetsky says. “Not only do I need to see a new watch, but I need to see a new case and a new box as well. Well, the retailer and the floor staff is the same way. They want to see fresh stuff, fresh colors, fresh product. Otherwise it gets a bit boring. Not only are you creating hype for the consumer, but you’re creating hype for the retailer to buy the product — and for the floor person to sell it.”

Of course, the packaging must be within reason. “You don’t want to spend a ton of money on the packaging because that does go into the price of the product,” says Machado. “At a certain point you start paying for packaging when you’re really buying a watch.”ets a bit boring. Not only are you creating hype for the consumer, but you’re creating hype for the retailer to buy the product — and for the floor person to sell it.”

Of course, the packaging must be within reason. “You don’t want to spend a ton of money on the packaging because that does go into the price of the product,” says Machado. “At a certain point you start paying for packaging when you’re really buying a watch.”