Watch Market Predictions 2024: Is the Tide Turning?
by Raman Kalra
Raman Kalra is the founder of The Watch Muse blog and has kindly agreed to share some of his articles with us here on Quill & Pad.
It’s hard to believe that December is already here. Another year has gone by, and we’ve seen some fascinating watch releases and market developments. Some of the highlights include Rolex’s surprise move at Watches & Wonders and the contrast between rising retail prices and softening secondary prices.
In some ways, many of the trends that we have experienced happening slowly over the last few years have continued. This includes more dial colors, case materials, and a shift to smaller case sizes. However, it feels like we have also hit a turning point where some changes are coming about.
The secondary market softening is providing a significant contrast to 2022. No longer is it a “guarantee” that a watch will go up in value if you get it at retail. Rolex is the elephant in the room, but I find it is more visible, especially in Limited Editions (LE) from other brands.
For example, many LEs launched through Hodinkee this year, especially on the lower end of the price scale, remained in stock for much longer than anticipated.
Similarly, because of this, availability from most brands has improved, and new releases can be experienced much quicker at an authorized dealer. The watch market seems to be going through a transition, even if it is slow, and I believe the next few years will be incredibly interesting to watch how it develops.
With most news releases done for 2023, it is time for us to consider what we might see throughout 2024. I want to share my five predictions of how watches, brands, and the industry will evolve.
These are just my opinions. None of us know for sure what will happen and I would love to hear your thoughts in the comments.
What do you mean by lower prices I hear you ask! In recent years, we have witnessed one of the most significant price increases ever in the industry. The fact that watches have jumped 40%-60% in retail price in a matter of years is astonishing.
Secondary prices are another story, with some heavily in-demand references trading at multiples over retail prices. However, at the same time, we have started to experience a shift economically.
Inflation and interest rates have risen to very high levels, equity markets have dropped, the crypto bubble burst, and borrowing money has become less attractive.
These factors have resulted in less disposable income for most, and you are seeing this feed through into the results of large luxury conglomerates that are noting softening demand.
We are now in a situation where brands have increased prices exceptionally fast in the face of falling demand. This will affect some brands more than others, and I don’t envisage any problems for Rolex and Patek Philippe.
However, when we consider how JLC has shifted its price range dramatically, and how Omega is close to the ceiling for what a watch like the Speedmaster is worth, it feels as though the industry as a whole will again need to rethink.
There are countless examples of where watches have taken a large leap upwards, and now that the majority of consumers have to be more considered, it beckons the question as to whether some watches are worth their asking price.
My prediction is we will start to see prices soften. The trend is already evident in the secondary market where the premiums on in-demand watches have dropped, and for others, you are finding discounts.
Eventually, brands will be affected negatively by this shift in demand and will need to react. I think this can come via three different channels.
First, there could be a pause on any further price hikes. With this idea, brands have front-loaded the next few cycles of price hikes and, from here on, prices will be more stable.
This can be the case in both the short and medium term, and eventually, as inflation hits everything else, including salaries (hopefully!), the relative affordability and value of these watches improve.
The second channel could be the re-emergence of discounts available at authorized dealers. Brands have tried to squash this practice over time and have been pretty effective at doing so. Yet, if demand slows and stock needs to move, discounts could reappear.
To some degree, you are starting to see this with particular “one-time” sales found online, although I do believe the discount route can be an effective option.
Third and finally, brands can lower the average and median price by launching more affordable options. It’s hard to regress the prices of watches already on offer, so you may start to see a shift where new releases are coming at the lower end of the spectrum.
I think this would be the best method as it can provide new, interesting entry points to a brand and simultaneously not devalue the more expensive pieces on offer.
However, this option would take the most time to come into effect. Deciding to broaden a collection, and then develop and launch new watches takes time.
Regardless of the method, in my opinion, we are at an inflection point and the overall retail market will get softer, following the trends already seen on the secondary side.
More color was one of my predictions for 2023 and, like clockwork, it played out. I think this trend is here to stay and 2024 will likely see more colors available. The use of color has become broader over the years for several reasons.
To start, we cannot forget that the use of color is driven by fashion, and depending on which color will be used and popularity goes through distinct waves.
There is a reason white dials were popular when dress watches and pocket watches were desired or why gold dials were in vogue in the 1980s. In the past five years, if not more, we have seen this exponential rise in the interest of watches.
At the same time, we have seen society become a lot more casual in terms of dress sense both in and out of the office. This has led to a situation where more people consider a watch as an accessory and are feeling comfortable and looking for ways to express themselves, with generally fewer formal environments to wear them in.
Color has been the answer. Black dials are a very popular choice for brands. Why wouldn’t they be when they are so versatile? White dial popularity on the other hand has faded since the 1990s, but in return, there has been a rise in colors like blue and green, which is still happening.
However, the last few years stand out in that brands are taking more risks and are being more flamboyant with their decisions. We see both bright and pastel palettes used by even the most popular brands. Options like bright yellow from Rolex, lime green from Oris in the ProPilot X, and burnt red from Omega in the Aqua Terra have all started to seem normal.
Even in November 2023 as I write this, Oris has just launched the ProPilot X Laser, which has a blue, green, and violet hue created purely by light.
The demand for these types of watches has risen and brands are answering with creative and interesting references that benefit all of us, even if one isn’t to your taste.
I don’t see this trend stopping, rather I see it picking up. The real question is what color is going to be the next hit. Tiffany blue and sky blue were the two hit colors of 2022.
In 2023, Rolex strayed into the multicolored realm with the Jigsaw and Bubble dial launches.
As a prediction, I think we see this multicolor experiment continue from brands who have yet to do it. Now Rolex has done it, who is to say Omega or Breitling won’t follow suit? Even Zenith has started down this path with the rainbow Defy Chroma II.
Apart from multicolor, which won’t be for everyone, on the restrained end of the scale, I think we will see more earthy tones. This can range from off-white to khaki green and brown. There is a gap in this segment still when it comes to popular watches, and it could be the stepping stone for those who prefer more conservative options and have yet to take a step into the colorful segment.
My next prediction leads very closely on from more color as it relates primarily to dial design. Collaborations have started to pick up and I see this aspect continuing to grow during 2024. When I say collaborations, it can be anything from media outlets such as Hodinkee or Time & Tide putting their name on limited editions, to the Marvel watches produced by Audemars Piguet.
There are a few reasons why this trend looks set to grow.
First, through collaborations, brands can resonate with a whole new consumer set. There are a huge number of fans of franchises like Spiderman who would not be considered watch enthusiasts with any interest in purchasing a luxury watch.
However, by having this partnership, they will not only become aware of the watch brand, but it could lead to more sales of watches which would not have been the case before.
The Audemars Piguet example is somewhat extreme given the price, but others are coming up like the Oris ProPilot X Kermit edition.
Second, these collaborations are a good excuse for new limited editions. We have seen a wave of these limited editions in the past. While it is getting more challenging to make a successful LE given prices have softened on the secondary market; it does still provide an opportunity.
By producing a limited quantity with a well-known cultural reference, whether it is Hodinkee or something else, a brand can be fairly confident that it will sell.
Finally, these collaborations can be timely marketing given what is going on in pop culture. A new Spiderman movie is released and Audemars Piguet is right behind with a new watch. It is an effective method of gaining attention in the media and potentially gaining traction with those not aware of luxury watches before.
In a similar vein, it is like a popular celebrity wearing a new watch, and we know what that does for the industry.
In my opinion, collaborations will continue in 2024. However, in the past, they have mainly focused on watch publications (Hodinkee, Time & Tide, etc.), and therefore, kept within watch circles. I see collaborations now happening more frequently with large pop culture franchises.
I expect we will see more Disney releases, especially after the successful Oris Kermit. Perhaps a watch brand will consider a Batman link-up, which could be very interesting, given the ‘Batman’ nickname for Rolex (you are seeing the trend of Kermit, and then Batman I hope!).
Imagine how cool a Batman-themed Zenith or Breitling would be. The possibilities are endless and I think it would easily win over the watch community and broader pop culture followers alike.
My only hope is that any collaboration that does happen won’t end up in the price range of a house like the Audemars Piguet!
Ironic subtitle (I know), yet I think we will start to see the trend of overly vintage-inspired watches wind down and, therefore, less fauxtina going forward. Fauxtina was a term first used in 2012, although it can be argued as to when it was first coined. It refers to designing a dial to look aged straight out of the box.
Typically, this was achieved with off-white lume that can now be found across many brands, including large names such as Tudor and Omega.
However, there have been other small details such as distressed dials that also give the overall effect. Without a doubt, the last decade saw a transition in consumer demand towards more vintage-inspired watches. This coincided with a broader rise in interest in vintage watches and demand for smaller case designs.
As the world becomes more digital, vintage watches provide a sense of nostalgia, which I believe spoke to many. Several brands noticed this and decided to offer watches with a vintage aesthetic that so many were after, but with modern technology. This has allowed more people to access these fantastic designs of the past without having to worry about the servicing and buying concerns associated with true vintage watches.
There is a reason the Tudor Black Bay became such a hit and carried the brand to new heights. Another example is Omega, who started to produce heritage Seamaster and Speedmaster models.
This whole trend has been great and many people enjoy this style. There is no doubt that they look fantastic, and it is understandable why many of the most popular models from brands are these exact references. Although I don’t own one, I can appreciate them.
I do not believe that the wave of vintage styling is over, however, I do believe the use of fauxtina will slow down. Instead, the aesthetic will be achieved through other details such as dial colors, sizing, and text, or even pure recreations of the originals.
As a consumer base, I find that watch buyers have become more aware over the years. There is now a better understanding of how a certain watch resembles something from the past without having to shout it, and that is what fauxtina did. If anything, there are some signs that this is already starting to happen.
The 2023 Tudor Black Bay 54 removed the gilt accents from the bezel, making it feel more naturally vintage instead of trying too hard. I suspect we see some other brands who have leaned into this whole look slowly pull back on fauxtina, letting the less obvious details provide that vintage feel.
Rolex Supply Increases
If you are reading this, I suspect you know that Rolex watches are hard to come by when buying from an authorized dealer. What started with specific models like the Rolex Daytona, has spread to practically every stainless steel reference and even some precious metal.
As above, when discussing the trend in pricing, Rolex has been at the forefront of this demand wave. It has been the ‘it’ item for many and it is the first brand of contact for those getting into luxury watches for the first time.
The watches produced by Rolex are genuinely fantastic, with timeless designs, great build quality, and feel on the wrist. However, Rolex also provides a true sense of luxury (outside of the boutique experience) and brand recognition that so many are after.
Watches have become more widely recognized as social status symbols, helped by platforms like Instagram, and this has brought in more consumers than ever. This Rolex interest alone has largely driven the overall market growth and price increases.
There is currently an imbalance between supply and demand, and despite making approximately a million watches per year, Rolex is a name that struggles in this space. However, they are aware of the market situation and have taken some steps to help address it going forward.
Firstly, Rolex has purchased Bucherer and now has more control over its AD network.
Secondly, they are increasing production capacity. Supply is going to improve and as previously mentioned, when discussing prices dropping earlier, demand looks to be cooling.
I expect that in 2024 it will lead to more people getting a Rolex through an authorized dealer. This is potentially good news if you are in the market for one!
And that’s not all. As getting a Rolex becomes easier, I think it will positively impact the competition. You may be wondering how. While no one has the exact answer, I do believe some of the attraction towards Rolex is in “the chase” – not knowing when you will receive the “call” or “text” from your boutique that a watch is available for you.
A sense that, by being allocated a watch from the brand, you are somewhat lucky, even though you are spending a significant amount with them.
As the feeling of exclusivity diminishes with wider availability, there will be less pressure to buy a Datejust or a two-tone GMT that you’re unsure about when you initially set out to buy a Batman GMT. At the same time, the novelty will not be as high, and I think you will start to see people less blinded by the crown and more willing to look elsewhere.
There are small signs that the watch market is at a turning point, whether through design or pricing structure. 2023 has been an interesting year that has seen watches beyond expectations launched, but at the same time, some indications that 2024 might bring a slightly different environment.
The five predictions I have going into next year revolve around availability, market dynamics, and the continuation of color.
Firstly, I think we are in a place where we might start to see a reduction in prices. How this is achieved remains to be seen, but there are multiple methods brands can consider.
Beyond pricing, there is still so much room for brands to try new color palettes – maybe some of the more iconic models follow down this path.
At the same time, collaboration between watch brands and pop culture franchises has a lot of room to grow. It can help bring a new marketing element for watches and provide some potentially exciting releases.
These predictions are all my opinion, and I am excited to see how the industry continues to evolve. Let me know if you agree with these ideas, and if not, I would love to hear your predictions for 2024!
You can read more articles by Raman Kalra at www.thewatchmuse.com.
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