Why You Will Buy a Luxury Watch Online

Analysis

As I’ve detailed before in Brands, Marketplaces, and the Battle to win the Consumer, the value chain for any industry — including the watch industry — is divided into three components: suppliers, distributors, and consumers. The best way to make out-sized profits in a consumer market is to either gain a horizontal monopoly in one of these three parts or to integrate two of the parts such that you have a competitive advantage in delivering a vertical solution. In the pre-internet era the latter strategy depended on controlling distribution. For example, in the watch industry, a company or brand would focus on manufacturing (i.e. supplying) watches and then build out an exclusive network of distribution, namely by signing on authorized dealers to sell the company’s watches on the ground.

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