When you invest in something, you’re not just putting up the cash, but your time, energy, and reputation as well. You really have to believe 100% that this product or service will sell, otherwise, what’s the point of investing? Watches have been a staple fashion item for centuries and continue to stay profitable in 2019.
Despite a dip in Swiss watch sales in 2016 and 2017 (likely due to the rise of non-Swiss-made smartwatches), the industry now looks stronger than ever. In short, if you see an opportunity to invest in watches, do it now.
Alongside well-known brands like Rolex, Breitling, Patek Philippe, and TAG Heuer, we’ve begun to see an influx of new companies with a knack for creating affordable and beautifully made watches. Skagen, Daniel Wellington, and MVMT seemingly came out of nowhere and made a name for themselves with a younger generation more keenly aware of price tags. After all, the average 20-something would much prefer to pay $150 instead of $15,000 for a wristwatch. This is also where Swatch has always had a big leap over its competitors, by simply producing good watches that are often below $100.
Below, we’ll discuss a few things to consider if you like the idea of investing in a new watch company.
What’s different about this brand?
As we’ve already listed a bunch of popular watch brands, what reason does this company have for thinking it could bring something new to the table? Is the price markedly cheaper while still getting having materials and craftsmanship? Is there a feature like an alarm or light, which might be useful for the typical watch wearer?
If a company comes to you looking for an investment, there has to be some distinction between other brands, otherwise you’re facing an uphill battle from the get-go.
Does the CEO know what he/she is doing?
How much technological, design, marketing, or business experience does the CEO (or CEOs) have with this brand? Taking a chance on someone making their first rodeo is pretty risky, unless they prove they have the knowledge and gumption to drag a new company from obscurity to popularity.
If you hand over your cash and find that you’re actually having to do most of the work for this watch business, something will definitely feel off. You’re investing in people as much as investing in a product or service.
Who is this watch made for?
If the target market is clear and present, then that’s half the fight. If we take MVMT for an example, the brand made itself known around 2015 by taking advantage of Instagram advertising and sponsoring major podcasts before doing this was commonplace. When you hit the right target market with an attractive product at an enticing price, then it’s hard not to succeed.
Of course, advertising on Instagram and podcasts is a crowded game nowadays, but every investor should know what the marketing plans are, be it women, men, teenagers, children, Millennials, etc.
Is it contemporary?
We’ve seen smartwatches like the Apple Watch, Fitbit, and Samsung Gear storm out of the gates because they are modern, cool looking, have tons of features, and are rechargeable. Consumers are looking for things which make their lives easier, not harder, so any new business without an eye on the future is, quite simply: clueless.
While it’s not necessary that any new company must emulate that of Apple (easier said than done), taking heed of market trends is important to some degree. If it happens that analysts predict that digital watches will continue to slowly overtake mechanical watches in the next 5-10 years, then best take note of that.