(Author’s note – I do not intend to touch the subject of who the seller is, nor do I intend to discuss the practises of the auction house in question. This article is purely about the difference in thinking of the enthusiast and the brands.)
It has finally happened. The watch-internet was broken by the announcement of a 2021 Patek Philippe Nautilus in Steel with Green Dial (5711/1A-014) that was sold at auction for CHF450,000 – an eye-watering price that represents a number over ten times the retail price of this particular reference. No doubt from an investment perspective, this is an incredible return for a piece destined to be produced for only one year – however, it has also begged the question from enthusiasts – “Where will it stop?”. For a number of years, enthusiasts have felt hard-done by the brands they once venerated and held so dear to their hearts – at the same time, watch brands are experiencing an unprecedented increase in brand equity, and subsequently, an increase in value on the secondary market. This dissonance between brands and enthusiasts only appears to be growing, and it seems that this widens the gap between the two groups – both of whom at the end of the day, are involved in this industry because of passion.
From a brand perspective, it can be argued that there has never been more eyes on the industry than the present time. If you have vaguely heard of watches, you will undoubtedly have heard of the astronomical numbers that have been achieved by certain watches at auction – the Patek Philippe Grandmaster Chime in Stainless Steel at Only Watch 2019 and Paul Newman’s Rolex Daytona are the first that come to mind. These auction results have only served to bring fresh clients to boutiques interested in the world of watches, no doubt curious about the anachronisms that we enthusiasts discuss with such fervour. The prospect of a watch selling so much higher than its original RRP is certainly a rarity for many things, so when casual observers hear of wild gains over initial buying price, this naturally piques one’s interest – think of shares in Buy-Now-Pay-Later companies (Afterpay for my Australian compatriots), Cryptocurrency, or even the latest “asset class” – First Edition Pokemon Cards. All of this leads to greater brand equity for those that have watches that perform exceptionally at auction – buoyed by these results, this fuels a cycle of supply and demand that is never satisfied. Furthermore, in the world of luxury, demand is inelastic, and the target consumer is insensitive to price, fuelling a seemingly insatiable desire for our beloved watches. At the end of the day, this interest only serves to benefit the industry as a whole, meaning that watchmaking will take a licking and keep on ticking – the ultimate end goal of any industry, and particularly one where mechanical technology was long superseded by something technically more superior.
On the other side of the coin, by the very nature of being an enthusiast, you link yourself to your hobby of choice – this applies to any field, be it watches, cars, or even your favourite sports team. Being an enthusiast is a great thing because it brings like-minded people together, now able to indulge in conversation that would otherwise be nonsensical to those outside of this exclusive circle. People become enthusiasts in different ways – most often being through a respected relative, or through advertising encountered in daily life. Either way, once converted, the enthusiast is a loyal customer for life, researching, examining and feeling their way through to their next purchase. As such, the enthusiast feels that they are privy to knowledge that should be safeguarded and protected for those admitted into this inner circle, and they are not wrong for feeling this way. Depending on their time-of-entry, the enthusiast may have seen incredible watches at a relative bargain (think 5 digit Rolex references, Gerald Genta and Disney collaboration pieces, or early Roger Dubuis Lemania-powered monopusher chronographs), and done their research through buying and experiencing. Through the advent of social media, the old guard have been able to share this knowledge with the entire world, and they have had no small part to play in the world of watches opening up to a wider audience. The enthusiast world is very much fuelled by emotion – most of us are not pilots, divers or race-car drivers, but the notion that one of our watches was used in that environment evokes a sense of adventure in all of us.
Thus, when you have the semi-logical and commerce-driven side of increasing brand equity from our favourite companies, combined with the high-emotion of the highly educated enthusiast, the dissonance arises from astronomical auction prices – case in point, the most recent auction of the Patek Philippe Nautilus with Green Dial. For the casual observer, it is an incredible achievement of the industry to realise such a price for a watch that has been on the market for less than six months, and for the return on investment for the seller.
However, for the enthusiast, it represents another seemingly unattainable goal that has been snatched away, the argument being “why can’t it go to someone who truly loves the watch?”. As a purely emotionally-based argument, it makes sense – only those who love watches should be given pieces that are hard to get, and the brands that have the privilege of allocating watches to clients are attempting to do just that. When these limited pieces show up at auction and sell for incredibly high prices – the brand equity for the watch brand is increased, but the enthusiast goes through a range of emotions – disappointment, leading to anger and frustration.
So what can be done about this? Do the brands introduce even stricter policies on their retailers to vet customers? Should enthusiasts just suck it up, and stop complaining? You could take a page from Ice T’s book, and say “Don’t hate the player, hate the game”, but that statement is non-constructive at best, and condescending at worst. At the end of the day, brands should strive to be even closer to their customers, to deliver the best customer experience possible, and enthusiasts should also explore their options – there is plenty to be had in the world of watches, once your horizons have been widened through research, reading and get-togethers (Physical or Socially Distanced).