Should Luxury Brands Make Affordable Models?
This started as reply to the following post by @erikswrist
I don't know if this would in fact be an unpopular opinion, but I think that "luxury" brands should start experimenting with making watches for enthusiasts on a budget. I'd love to see what they come up with.
I like the inherent hierarchy and dislike brand dilution. There's the sage line (that I can't locate) that teens or something should dream of buying a Cadillac and not actually be able to do so.
Sorry to dwell on automotive analogies, but once upon a time somebody having just about any European car "meant something." The marque itself was prestigious to an unquestionable level. Now they are ubiquitous and the brand auras are nowhere as exalted.
A few years ago it was observed that (whatever the Lexus version of the Prius was) was the best selling Lexus model. Uncoincidentally, it was the cheapest way to get behind the wheel of the marque. Speculation is that many would have bought higher up the food chain were this lower-hanging fruit not available.
The economics are that higher margins at the top end must be offset by higher volume on lower margins as we go down the ladder. I'm very suspicious that this is a safe bet, despite the Moonswatch example. The idea that it's made up for in free brand awareness or some sort of loss leader (or inverted halo model) effect is contentious as well.
Just as importantly, reputation is everything. Moving upmarket is slow and difficult (see Seiko as an example), so risking this at all by introducing a downmarket line is perilous.
I have no idea how much diffusion branding is done in watches. As an example, in clothing there is Ralph Lauren Purple Label which is top notch stuff at top notch prices, then there is the more midmarket Polo line, and there is also Chaps, which is ... lower. But that's the sort of game that would need to be played such that people don't start balking at both ends.
Anyway, caller you say what?
Started as a quartzbro goofing on the mechanical snobs, wrote for thetruthaboutwatches.com, and lately started finding forgotten familial vintage watches in need of love.
They do but they use different brand names.
I think they are afraid to lose profit on their expensive stuff.
And if they make the cheap stuff significantly shitter so that there's a reason to buy the expensive stuff then they risk damaging their brand with low quality.
It’s tough because it will sour the brand who buy it for exclusivity. Mercedes tried with the A class and is now killing the line. It’s interesting you use the Ralph Lauren analogy, if anyone can get the same logo at Marshall’s for $15 is it still a luxury brand?
Like most things in life, it ends up with money: how much, when, where and why.
Should they? If there is profit to be made there why not? The only reason it's not done more often is that a short time profit might not be beneficial if the company take a longer view, but that won't happen if it's traded publicly.
No, I don’t think they should.
At first glance, I see no good reason why they should.
Best evidence of this is the fact that they haven’t.
Premium brands on the other hand, have moved in quickly to occupy new lower segments with revitalized offers and brand freshness.
Also, to our great benefit this opens the door for smaller, boutique like, brands, both at entry and premium segments. I’m a big fan on these micro, indie, family, lone wolf or bunch of guys sort of brands.
Who is even trying to do this? Every brand I can see is trying to move upmarket, not down, especially in light of the crash in the "affordable"end. Is any luxury brand even considering a downmarket version of themselves (if you think the Mooswatch is a case of this, it's an outlier)? I don't see it. If anything, it's hard for brands to abandon their low end, when people have come to expect a certain price point.
I have to ask why? Let's keep the quality level up and leave other brands to selling a different product line. Didn't the Moonswatch teach us what a bad idea this is? It appears luxury brands can't build a quality lower end product even if their parent company is the world champion at it.
Who is even trying to do this? Every brand I can see is trying to move upmarket, not down, especially in light of the crash in the "affordable"end. Is any luxury brand even considering a downmarket version of themselves (if you think the Mooswatch is a case of this, it's an outlier)? I don't see it. If anything, it's hard for brands to abandon their low end, when people have come to expect a certain price point.
I am unaware of an effort, just (at least) one commenter's desire.
I'll try to state the point made by Ellen Ruppel-Shell in her book about "discount culture" and how it creates a market bifurcation*. While the low end is on a race to the bottom with prices, everything else becomes regarded as a luxury good. Furthermore increased competition for scarce resources push prices further upward.
* Traditionally the three strata are luxury (price no object), price (is the main object), and the wide middle of value or "best quality for the price." The mass market has largely lost the value segment.
Automakers are hellbent on obtaining market share and attracting young buyers with the hopes of securing long-term repeat customers. I doubt this transfers well to the watch arena.
Rolex pulled it off quite nicely with Tudor.
Rolex pulled it off quite nicely with Tudor.
This is an excellent example of an implicit diffusion brand. It targets a different price point and quietly trades on the main brand's reputation.
This is an excellent example of an implicit diffusion brand. It targets a different price point and quietly trades on the main brand's reputation.
When a luxury brand does it this way, is it acceptable? Or should the brand be preserved at any cost?
No because the name luxury means just that expensive and exclusive. If rolex made a cheaper line watch then what would be the point? I am just using Rolex as a reference point because everyone knows the brand. Let's face it clothes watches anything can be bought cheap but it's a psychological thing with all of us. We want what we perceive as the best. Now go out there and but your 10 grand watch 😂😉
From all I have seen, across different brands, from cars, jewelry, watches to purses. (If you think my watch hobby is bad, my wife bought luxury purses she already owned, but had forgotten about.) The answer is a clear "no".
I think the way Tudor/Rolex and Seiko/GS solves it seems reasonable 🤔
When a luxury brand does it this way, is it acceptable? Or should the brand be preserved at any cost?
Honestly, the variables are too numerous. I'd say that there is a way to do this successfully, but that it is much easier and more likely to make a big mess of it.
I do agree with the original statement, that it would be interesting "to see what they'd come up with" with more cost constraints.
Yes, I know, in the EU many Mercs are used as taxi's, but that is a result of location. The S class and G Wagen still remains the gold standard for their classes.
The Cygnet is an interesting one. Everyone alive knew it was only being made to adhere to MPG standards. Not sure anyone actually things it was an actual AM.
I hear you, but they needed a 50 MPG car immediately at the time to offset the rest of their lineup otherwise they could not sell in the EU, thus the Cygnet. I do not think they cared if any of them actually sold (they sold less than 150), but it had to exist so they could exist. Take an $8K Toyota IQ and sell it for $45K. To be fair, it is a luxury product compared to the IQ and Versa! It is the similar reason the original BMW i3 existed. Many low-volume cars high MPG only existed to fill a loophole in gas standards. Those cars of that era are fascinating as a result.
I think the equivalent would be if the US said to Rolex, "Rolex, you need to make at least a watch in the US to sell here." Rolex then says, "Hey Timex, can we do a Rolex X Timex edition, a limited run of 100?" So they could in turn sell the rest of their actual lineup in the US. One could switch that to Seiko and Japan, etc.
I think the way Tudor/Rolex and Seiko/GS solves it seems reasonable 🤔
I was also going to bring up Seiko and Grand Seiko. They've "figured out" how to offer watches at the entry and luxury levels, but many in the watch community give the company flack and ridicule for the blurred lines in the middle, like some higher end Seiko pieces that now have the #springdrive movement.
I was also going to bring up Seiko and Grand Seiko. They've "figured out" how to offer watches at the entry and luxury levels, but many in the watch community give the company flack and ridicule for the blurred lines in the middle, like some higher end Seiko pieces that now have the #springdrive movement.
There is little overlap in technology and components IMO. The amount of shared parts was bigger in the beginning stages of Tudor and look at them now ☺️
With a different brand name yes, with the same brand name NO, that would massively hurt the brand image they would never do it
An excellent analogy here would be Vera Wang. I once saw an interview about her first release into a department store. She said "I came to the realization that I can sell 100 dresses a year and make 5k each, or I can sell 10 million and make $20 each." Is Vera Wang still appearing on red carpets? No idea, I don't watch those shows, but I am assuming not. But....she is also making a lot more money. Brands have to make the choice.
It was a Lexus CT200h you’re referring to. I had one and it was an amazing ride. We still have a Prius too Haha. Very relatable post.
It was a Lexus CT200h you’re referring to. I had one and it was an amazing ride. We still have a Prius too Haha. Very relatable post.
I had a friend that had a CT200h and is now in a hybrid ES350 or whatever the Avalon based larger Lexus is. That tidbit can be interpreted to support contrary arguments.
It would hurt the image and prestige of the brand.
In some kind of form thats what Grand Seiko is suffering today.
"Why spend tousands of dollars on a Seiko?"
Lowden guitars put out Sheeran’s and not that they’re bad but to my mind, they are not a patch on a Lowden acoustic, way cheaper in all ways in comparison. I think this move may be a sound financial move for George , but to my mind it has eroded the prestige of owning a Lowden ?!
I was also going to bring up Seiko and Grand Seiko. They've "figured out" how to offer watches at the entry and luxury levels, but many in the watch community give the company flack and ridicule for the blurred lines in the middle, like some higher end Seiko pieces that now have the #springdrive movement.
Seiko have always dangled the carrot that their totally in house manufacturing might means if we wait , yes most of their luxury technology and finishing quality makes their mid tier offerings desirable ( the drawcard is In House ) we know a a cheap Seiko is still manufactured with their ideology of the best they can make at all levels of price point .