I think the ultimate goal may be to reduce the grey market supply and offer direct sales via the internet and OBs. When everyone assumes they can take 20% off the top it dilutes the value of the brand and subsequent resale value. Maybe they are working off the inventory of 1861s and will not offer the next gen 3861s on the grey market.

IMO, Rolex is popular because people view it as a store of value and potential investment opportunity. Objectively, they are not superior watches to many other less expensive makes. Many people buy them because TODAY they are seen as a safe use of funds (relatively speaking). When a strong grey market exists for a brand the impression is they are overpriced at the AD and that you'd be a fool to buy one there at full retail. The downstream effects are that if the brand doesn't have strong initial sale value, then the resale value should be equally poor. If Omega and other brands held the line on distribution and discounts it would raise the price of the watches, but I believe it would also raise the residual value on them, and may actually increase sales as people see another "safe" option at a similar price point.

I think we have to ask the question that if every watch held it's value like a Rolex, would Rolex be as popular/sell as many watches as they do today? I posit that they would not. If you could buy Submariners and Pepsi's all day long on Jomashop for 25% off retail, the demand, ultimately for them would go down, as would the resale value. When you're forking over between $5-10k on a watch, you want to feel like you've made a solid purchase. Right now, the only way people feel like they've made a solid purchase on an Omega is to get one new at a deep discount so they don't take it in the shorts later on if they sell it.

My $0.02

 

My issue isn't so much with Omega raising prices, but doing it far too frequently. Last hike was in May.

Having complete control of the supply chain (and thus minimising inventory that goes to grey market) is connected to brand strength most of all. Grey market prices below RRP result from ADs who shift inventory because there isn't sufficient demand at retail price and from private sellers who do the same.

It all comes down to brand. Rolex is a big fat market anomaly and not the norm - there's no point analysing their success because it is not possible to reproduce IMO. Omega's brand may come to approach a similar strength in the future, but it definitely will not be due to any calculated effort to emulate Rolex.

I don't see how Omega offering direct sales or raising prices makes one iota of positive difference to reducing grey market supply. If demand is insufficient at current prices and you are already a giant player in the industry, demand isn't going up at a higher price, especially when we're teetering at the peaks of an economic cycle and people are starting to get more cautious with their money.

 

I agree that they've gone about it the wrong way with the incremental increases and that Rolex and Patek are anomalies, but I think if Omega takes sales in-house or limits the distribution network then it will absolutely reduce the grey market supply. I think psychology comes into play more than we'd like to admit when it comes to purchasing luxury watches. There were a ton of Tin-Tin's sitting on shelves for years then all of a sudden they're hot. People have to be talked into buying something that's easily accessible. What's the rush, you can always pick one up. Get this other thing now because they are hard to get, even if you don't know if you like it yet, FOMO. The only Omegas I see flying off the shelves at the OBs are the LEs, which is probably why they make so many damn LEs. If the grey market supply dries up, and the days of deep discounts are over, then I think it will strengthen the brand. A solid update to the base speedy that is only available through OBs will be a defacto LE and may be enough to change some minds and help the brand.

 

I can’t see Omega getting full control of the grey market, or even really caring about it. As part of the Swatch group who have share holders and targets to hit every quarter, every half year and every year it’s all about hitting a number in terms of wholesaling. So as long as they keep hitting their targets everyone is happy, they’ve made their margin and it’s the retailers problem to deal with.

It doesn’t matter which of their Brands you look at they’re all the same. Blancpain down to Tissot. For sure certain parts of the Company will want to things in the right way, protect the brand and try to move it up a level. Unfortunately they’ll be shouted down by the bean counters that remind them without them shifting metal they don’t have a business.

 

Well, I lost myself somewhere in the middle. Do you belIeve let’s assume for simplicity the million pieces Omega sells per year makes it a GIANT in a market with a potential number of clients perhaps over a billion?
Prices of Rolex are stable, demand is quadruple the supply and customers express hope Rolex will raise prices so that assortment of SS becomes available at least at a moderate wait time of 6 months to an year.

 

The difference is that demand is insufficient at current prices. Omega is not Rolex; normal market rules apply. Everybody making the comparison to Rolex misses the point IMO. I'd bet top management at Rolex doesn't even know why the market has gone gaga over their watches and prefer to attribute it secretly to the madness of crowds.

And yes, Omega is most certainly giant by market share metrics (only second to Rolex). I'm not saying the market is saturated, but potential number of clients is a pie-in-the-sky figure when you are talking about expensive wrist toys. If the bean counters at Omega want to build castles in the air based on that figure, all the power to them. I'm sure they know better than me .

 

Don’t argue with what you say, but IMHO there is no problem as far as pricing level is concerned. neither quality, nor design wise. The Genesis of all problems Omega faces is the shareholding structure of mother company. Which forfeits future at the expense of short term earnings. Thus Omega floods the market with numerous iterations and LE. Which at the end is detrimental for its performance.

 

Agree - I'm not saying I think the watches are unfairly priced even with the bump. They are still okay value relative to competition. It is just that if they reduced frequency of price bumps, I think it would serve the brand better long-term, but as you say the short-term public growth of parent company is pitted against long-term growth of some of its brands.

 

I took great pleasure in telling my omega boutique that I had bought the latest James Bond incarnation direct from omega on line after his smug attitude towards me treating me like a lower life form for asking if they could acquire the piece for me.
The store also missed out on selling me a Tudor gmt and a ladies Tudor on the same day.
I just walked 10 meters to goldsmiths in Trafford centre and and purchased the above.
Omega boutiques are on a knife edge in my opinion as they are being used as viewing galleries and people then going grey to get a discount.
I know a few independent watch sellers where 20% disc is easily achieved.
And if omega online website continues to sell limited editions direct why on earth would you pay full retail at a boutique for the readily available pieces that you can get at a grey outlet with discounts galore.

 

At this rate with all the tariffs on metals, wouldn't be surprised if the price increases over here....

 

Good for you, I don't get why some stores have such poor staff. Also, in terms of discount to us in the UK, direct from Monaco including delivery you can find 27% off a new Planet Ocean.

 

That only applies to metals in their raw state tough. So as long as the watch is made in Switzerland, it won't be an issue.
Until the decide to put tariffs on luxury goods from Switzerland.
I guess good thing they're not part of the EU after all. Otherwise there might already be tariffs on them now...

 

Is there a website

 

Yes, Chrono24, remember to choose Monaco as a location to narrow down the search.


You might not believe it but Monaco is consistently cheaper than just about anywhere else, and as it's part of the EU there's no additional charges to be added other than shipping which I took in to account.

 

Thanks for the heads up.
I’m going to the Caribbean in a couple of weeks omegas everywhere.
I actually got 40% of a seamaster there for my son.
It was in March this year.
Colors jewellers in st kitts
They post to the uk

 

Sounds great, good weather and watch shopping with good prices, doesn't get much better.

 

I’ve just had a quick look there’s some great deals.
What store would you recommend

 

Mall of the Watch is good, but remember to check that what ever listing you look at make sure that the available part is highlighted with green dot which indicates that it's in stock, otherwise there could be a delay in getting the watch.

 

Thanks you’re a gent

 

Just for reference. This price increase is not only for UK. In Poland, they raised (again) prices by approx 7 to 7.5%