David Rosenthal: evaluation

Transcript context

…This is finally clicked in my head. It’s not that the mechanical watch made a comeback, it’s that there was an entirely new market that it turned out to be the perfect thing for after their initial market got wrecked. I think there’s also another level of nuance here too. Rolex was better positioned than most of the other Swiss companies because they had already transitioned to lifestyle. However, that would not have been enough. Eventually, Seiko and Citizen were also going to transition to lifestyle companies, and that in and of itself, what wearing your watch says about you isn’t defensible in the long run against technology disruption. Wearing an Apple Watch. What model, what style, what band says a lot about you too. I wear my Hermès band on my Apple Watch. That says a lot about me. But what is defensible is a luxury strategy. A luxury strategy expands to managing the entire market and overall brand management. It’s managing the secondary market and supply on it. It’s doing things like, oh, the Paul Newman craze is happening. Let’s pull the model from the market. It’s vertically integrating to ensure absolute product consistency. It’s instituting waitlists. It’s killing or pausing your most successful products. It’s not changing your price in response to demand shifts. A purely lifestyle company wouldn’t do all of those things. Remember Fossil, the US watch company that is now basically bankrupt? They were a lifestyle watch company, but they were not a luxury company. Yeah. That was the fashion watch craze where the quartz technology enabled a whole wave of $25 watches where you could own five, six, seven of them, and wear with different outfits. That was an interesting market for 20 years before technology obsoleted that one too with the smartwatch. Interestingly, do you know what Swatch stands for?…

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