The man left Singapore for Philadelphia. Justin Reis, newly appointed CEO but already the co-founder of WatchBox, took the reins of a company hit hard by the COVID-19 pandemic—a company that now has never been better! Analysis of this counter-intuitive result with Patrik Hoffmann, Executive Vice President of the company, from his home base in Neuchâtel.
The world economy goes into a recession, yet WatchBox gains 25% in profit. How do you explain this?
There are various reasons for this: but the strongest cause is not surprisingly that WatchBox offers a business model that suits a strong demand of the market, the customers. Our business model is set to serve our clients with an online platform paired with an impeccable personal service. WatchBox is not only offering the largest collection of certified pre-owned timepieces but also a vaste volume of educational information about the watch industry, drivers of watch business and product itself. Our customers perform business with us from their homes, business and recreational places.
You have always acquired, for stock purposes, the pieces you offer on the website. Is that not too much to handle? We’re talking about $60 million worth of stock…
The inventory that we owe is our biggest asset it is backed with an enormous know how which we have built of the last years. Just imagine that in the first 8 months of 2020 alone, we transacted 18,000 deals. Every single deal adds to our know how; this know how paired with a sophisticated tech system, helps us to reduce the risk of owing this kind of inventory on the one side and to learn where to invest for the future. The approach is similar to the financial institutions: we buy certain stocks (in our cases luxury timepieces) that we feel will keep or gain in value.
The average transaction on Watchbox soared from $13,000 to almost $18,000. Why do you think that is?
Isn’t this almost unheard of for an online business? This is to a big part possible as we owe the inventory; one of WatchBox’s greatest differentiators is that we own every one of our watches. Watches are evaluated, authenticated, and brought as close to ‘mint’ condition as possible without compromising value, before being presented for sale with a 2-year warranty. This means we have been able to build a credibility and trust with our customers. We speak with our customers; we know our customers. On top of it, there are more and more high-end and VIP customers, who are generally willing and open to perform business online.
WatchBox seems to be moving up its average price range. Does the platform remain accessible to more modest collectors, for pieces between €3,000 and €5,000?
Absolutely, we conduct a large volume of business in that price range where some much reputable companies have their place, like Breitling, Oris, IWC, Panerai, Omega and to a certain extent even Rolex.
What is the recurrence rate of a customer, meaning those who buy a first time on WatchBox then come back a second or even a third time?
It depends on the global area and how long we have been in business in the different regions but the rate of return customers is over 40% globally, which proofs that we have a very loyal customer base.
How have the markets reacted to various lockdowns? Have you seen some countries take off or others become more frugal?
I can primarily speak for the European markets. The markets that have been less conservative in terms of online purchasing behavior have been much quicker in adapting, like the USA, Germany, the UK. The Swiss customer is traditionally more conservative. Generally, we can see that COVID has accelerated the way business is conducted online. A trend that has started years ago, just got a boost through COVID and the measures taken.
What can we expect from Watchbox in 2021?
WatchBox has grown tremendously over the last years and we have established strong footholds not only in the US but also Europe, the Middle East with our partnership with the Seddiqi organization, Singapore and Hong Kong. We will continue to grow, intensify our presence and most importantly make sure to fulfill and serve the actual demand of customers, something the primary watch business seems to have neglected in the last two decades.
