Recent Omega Negativity

M M.Alessa

Most of the successful brands in Morgan stanley report have the following criteria:
1- Limited Avilability
2- Value Appreciation/ Retention

Omega is the opposite, you can not swim against the current and expect to survive. IWC- Tudor - Brietling- Longines are all closing the gap with Omega.

Buying a $10k watch is not an easy decision for 99% let alone losing 40-50% the minute you walk out the AD. When Omega popular models used to cost between $3.5k - $5k losing $1.5k was not a big issue as it is now.

I am not saying Omega needs to copy Rolex, not at all, but at the same time they do not need to flood the market and dilute the brand intentionally. On the contrary, they can build a much more loyal base of clients that would get appreciate Omega better and look to collect more pieces.

I do not really know where does Omega stand today in the LUXURY watch market and where they are headed in the next 5 years, if they keep their current strategy.

DoctorEvil

Sounds like Omega needs a shot in the arm right now. Astronauts wearing 3861 Speedmasters on an Artemis moon landing would be perfect. Makes it a "true" Moonwatch and enhances the "cool factor".

njlam

I agree Rolex and Omega should not have the same strategy. There is only room for one Rolex.

That being said, imagine if Rolexes became plentiful and available. I believe the watch market as a whole could collapse as many have looked to other brands (like Omega) while they are waiting on or instead of a Rolex.

A healthy watchmaking ecosystem is important to Switzerland and I am sure there is a vested interest in keeping the industry alive and well. Many watch brands are struggling in Rolex’s wake, and even more so in the current economic environment.

Theoretically, the more scarce and expensive Rolex gets, the demand for alternatives should increase.

I believe Rolex’s scarcity strategy has worked exceptionally well for them. At the same time, their high prices and regular price increases may help make other brands seem more affordable if not more available.

While brands like Patek/Vacheron/RM/AP/etc can also raise prices without negative consequences, many brands cannot. Brand self-awareness may be an indicator of who survives and who doesn’t. Rolex raising prices is not a signal to the industry that everyone should also raise prices. Rather, I think if a brand wanted to gain positive attention/notoriety, maintaining or perhaps lowering prices would result in greater market share.

It is possible Omega’s introduction of the Reverse Panda Speedy would have been met with higher sales volume if the $10K+ price hadn’t stolen the show…

I guess what I am trying to say is Rolex’s scarcity and higher prices are good for Omega, but Omega is not making the most of this generous gift by imitating Rolex…They need to differentiate.

njlam

I agree Rolex and Omega should not have the same strategy. There is only room for one Rolex.

That being said, imagine if Rolexes became plentiful and available. I believe the watch market as a whole could collapse as many have looked to other brands (like Omega) while they are waiting on or instead of a Rolex.

njlam

A healthy watchmaking ecosystem is important to Switzerland and I am sure there is a vested interest in keeping the industry alive and well. Many watch brands are struggling in Rolex’s wake, and even more so in the current economic environment.

Theoretically, the more scarce and expensive Rolex gets, the demand for alternatives should increase.

njlam

I believe Rolex’s scarcity strategy has worked exceptionally well for them. At the same time, their high prices and regular price increases may help make other brands seem more affordable if not more available.

While brands like Patek/Vacheron/RM/AP/etc can also raise prices without negative consequences, many brands cannot. Brand self-awareness may be an indicator of who survives and who doesn’t. Rolex raising prices is not a signal to the industry that everyone should also raise prices. Rather, I think if a brand wanted to gain positive attention/notoriety, maintaining or perhaps lowering prices would result in greater market share.

It is possible Omega’s introduction of the Reverse Panda Speedy would have been met with higher sales volume if the $10K+ price hadn’t stolen the show…

I guess what I am trying to say is Rolex’s scarcity and higher prices are good for Omega, but Omega is not making the most of this generous gift by imitating Rolex…They need to differentiate.

DoctorEvil

No, the watch market as a whole won't collapse, only the secondary/grey market for Rolex. I believe there's a big difference there. Grey market dealers rely on stainless steel sports Rolex being scarce. If these watches were more widely available like Omega, they would immediately be forced to sell at a loss and a sports Rolex would depreciate just like any other watch.


Again, I have to respectfully disagree with you on that one. The way the watch market behaved during the Covid pandemic is a good example. The more scarce and expensive Rolex became, the more demand surged as people saw them as an appreciating asset. Conversely, demand for watches from other brands stayed the same or decreased. Most people who want a Rolex don't want another watch brand.


Agree with those points you raised above regarding Omega's pricing. One can increase prices only so much, until the market says "enough" and considers that your product is no longer worth what you're asking. Even a sports Rolex can one day reach this point. But for the moment, I feel Omega has reached its limit and this has already hurt their sales.

Archer

There was a time, before Tudor reintroduced itself to the North American market, that it was considered more of a collectors watch. While the masses wanted a Rolex to display their wealth and status, if you came across someone wearing a Tudor they were far more likely to be a collector.

ErichPryde

I don't think most people think so, no. When you market yourself as no substitute, that means no substitute.

G'c

Great points from members here on Omega's current predicament. Now I wonder if Omega would actually pay attention to what is being discussed here, or prefer to bury their heads in the sand. I understand they would likely only look at numbers as these forums only represent a niche community, but even the numbers don't reflect kindly on them. On a side note, is it even worse for another high luxury Swatch Group brand Blancpain? I love Blancpain's heritage but their prices are even hardly justifiable, even before the recent price increases. It boggles my mind as to how Blancpain can survive, with the competition being higher than ever.

D Duckie

Then there's the other brands which may or may not be under the umbrella of the Swatch group.
Any of which are going to be happy to eat Omega's lunch at the lower price points that Omega used to occupy.