The WatchOut! Mission: To drive critical market transparency and elevate the intelligence of the entire watch industry value chain by providing bespoke data insights to all parties.
When I bought my first watch a TAG Heuer, I knew nothing about watch markets or the price biasing that took place, ultimately, I was taken advantage of, and paid $1,500 more than I should have for the watch I bought. This mistake didn’t dampen how much I loved watches, but it did lead to an obsessive journey of always ensuring I paid what I should have for the next watches I bought. Additionally, we know that the market is ripe, online sales are only 25% of all watch sales currently, growing 19% YoY, and our largest competitor only has 8% of those sales. The moral of this story, there is room to make an impact in a market poised for disruption.
WatchOut! is a one-stop-shop for watch aficionados around the world. WatchOut! is a platform dedicated to consumer empowerment and information transparency that will revolutionize the luxury goods transaction process forever. This platform looks to serve as the direct connection between buyers, sellers, auction houses, retailers, brands, and most importantly, collectors. The targeted WatchOut! market is global, as we intend to create a fully functional transparency network that will drive empowerment into every corner of the world where luxury goods are being bought and sold. We’ve made the conscious decision to start with watches, as we have a passion for watches that goes beyond casual, which exceeded any other area within the luxury marketplace. Our intent is to extend the business into other spaces of the luxury world, and we believe the WatchOut! application will be the kindling for broader luxury application solutions (Wine/Art/Shoes/Cars/Handbags).
The opportunity is clear, we must aggregate this information in a timely manner and turn it into actionable intelligence for both the buyers and sellers of luxury watches through auction vehicles.
How do Auctions do it today?
- Due to an antitrust lawsuit against the auction houses in 2003, all auction houses had to start publishing all their transactional data and make it readily available to the public.
- Due to the same legislation, it’s illegal for them to seek information from one another due to price-fixing concerns. But they can source the data from a third party, as long as all of those parties have access to the same data set.
- That creates the highly manual process that we outlined above, which takes enormous man-hours and time commitments
The first solution is our dynamic database for the auction houses and individual buyers of high-end vintage & luxury watches. With the use of a web application, accessible from every modern device. The background of this offering is our analysis of the current data available and the credibility of the marketplace for watches by doing what no one else has done so far, which is to merge all available auction data into one portal. Please see the demo video below of our database solution in action.
Taking all this data into account will allow the auctioneers themselves to determine the true value of the assets pre-listing, including the best location to list any specific item. The insights provided will lead to a previously unprecedented level of statistical certainty, especially concerning the efficacy of the listing price vs. final sales price (hammer). In the case above we’ve shown the auctioneer/buyers are now able to gain critical statistical inference by slicing and dicing the data, which was previously unavailable to them.
What about the consumer? Are there similar inefficiencies in the consumer market that make it a good target for platform application?
The current state of the market for individual consumers and collectors is full of pitfalls, loopholes, and darkness. The transparency gap that plagues auctions isn’t unique, and consumers are directly impacted by the lack of clarity throughout the entire luxury market. As a result, consumers find themselves investing a great deal of personal time and discretionary effort into trying to understand the value of their target.
How do Consumers do this today?
- The transparency gap in the luxury market and the digitization of the world, has led to a proliferation of sellers that capitalize on this lack of clarity.
- What this introduces for the consumer is confusion, as you never really understand if you are making the right decision when you purchase a watch, because there are different tax advantages and discount schemes in play.
- That creates the highly manual process that we outlined above.
- There is absolutely no market aggregation tool, as it’s counterproductive to the market players’ upside potential.
Our consumer application is made for individual consumers and retail shops to obtain access to detailed reports and pricing trends on their devices instantaneously. A mobile version of our application will be available soon on the Apple Store under the name “WatchOut!”. Please watch the demo video below.
It’s an application that aggregates the market and tells users what they should pay for any timepiece, regardless of type or global location. This would be a seismic shift in the transactional relationships existing in the luxury consumer market today. Knowing that the relationship today is heavily weighted towards the seller, our application being first to market will be crucial to creating an impactful market entry. If our team achieves our collective vision of early phase success, this will drive future iterations of success. We believe it’s important because it will give us the credibility to drive the disruptive features of our long-term vision at a rate faster than the organizations we intend to disrupt can adapt.
Another feature of our solution.
This concept allows users to follow the price evolution of their watch collection. (Look there is the watch that I lost $1,500 on, right there)
Why it’s a winner:
- We’re connecting two very different worlds the grey market (second hand/vintage) & the world of Auctions, as we’ll use this information to connect perspective auctioneers/buyers directly to the people that have what they need.
- This creates network effect opportunities for individual buyers/sellers.
- After that, the free market forces kick in and everyone has the opportunity to let the markets tell them to either keep their watch or wait to sell it for a profit.
How do we make money?
As a specialized online platform, WatchOut!’s revenue generation will be comprised of four main components:
- Industry Data Reports analyzing historic prices reports for specialized industry players at first (auction houses, collectors, watch brands, and insurance companies)
- And once our platform reaches a critical mass:
Premium users’ subscription;
Retailers listing fees;
The Luxury Market is back in fashion. The overall luxury industry grew by 5% to an estimated 1.2 trillion globally in 2019. These figures focus on nine different segments, from luxury cars to personal luxury goods. This is a clear indicator of a special time and unusual demand for the ‘finer things in life’.
Personal luxury goods are extremely subjective to the customers, and we see the trends driven by sustained growth in some of the key regions. China is leading as the top performer, as mainland China sales grow thanks to a growing middle class, and their appetite to consume these luxury goods. Japan and the Americas grew at trivial levels.
Our research shows that a number of databases already exist online such as Watchbase.com, hodinkee.com, chrono24.com, but there isn’t a database that has accumulated the following features and made it so comprehensively easy for the user:
- Compilation of all historical transactions on brands/models/references
- Filtering ability off of any feature of the watch (dial, material, movement, case, size, color, etc)
- A Quick and speedy one to two-second wait per response
- Suggestions on when and where to purchase timepieces (e.g. We know that Rolex Submariners in Rose Gold historically obtain higher pricing in the Hong Kong auctions) for the customer to reduce their costs.
- Re-directing the link back to the auction house’s websites to gain a full description of exact pieces.
There are three primary Go-To-Market targets:
- Industry Data Reports(BtoB): Based on comparable industry experience we intend to start generating money in the first year of operation by selling customized data reports to specialized industry players. Our market analysis and recent contacts have shown auction houses are on the look-out (and do not have the in-house capability) for such industry reports, especially centered on highly collectible timepieces or specific brands (particularly Patek Phillipe, Rolex).
- User interface(BtoC): Individual Consumers will be able to access individual valuation reports, getting direct market quantification to understand the true market value of the items they seek. While we acknowledge the importance of maintaining free access to basic users to rapidly grow our users-base and position WatchOut! as the ‘go-to’ online platform for watches pricing and availability information, we intend to propose, once we have reached a critical mass, a Premium service that will unlock specific data analytics services to subscribers (best prices in their areas, push notifications about deals, information about another user searching for a model in their collection, etc.)
- Retailers Listing Fees(BtoB): Similar to well-known online marketplaces such as eBay and Amazon we assume that once established we will be able to charge retailers to list on our platform. Online research has taught us that listing fees are less and less common as marketplaces are charging and being compared.
We target partial operation start-up in early 2021. We will continue to buildup our watch pricing database. Our application will be listed on Apple’s App Store for free download in parallel to the website operation start, which should help us gain visibility and increase data capture and processing as early as possible. Thanks to everyone for your time!