The luxury watch market is steadily growing with no plateau in sight. Between now and 2027, it’s expected to grow by an impressive 2.69% CAGR. Therefore, it’s no wonder that many startups wish to take full advantage of the burgeoning niche. However, there’s a significant boom in second-hand luxury, too.
Reports from 2021 show that customers are spending $1,600 more, year on year, on resold luxury watches. There are several reasons why this may be the scenario - but why is this a venture niche to follow?
Bringing Vintage Watches to the Forefront
The pre-owned or vintage niche for clothing accessories has been building for some time. Luxury resale, in itself, is hugely popular with younger demographics. The reason for this may be as simple as luxury becoming more affordable. Arguably, those appreciating luxury with little in the way of capital will head towards second-hand outlets.
This boom in second-hand purchasing arrives on the back of an economic downturn worldwide, too. It’s arising from an attitude of not having to cut back on the things we love - but investing in luxury from a more creative standpoint.
Beyond this, there’s a thirst for collectability. Vintage watches from luxury and designer labels are, by and large, rare collectors’ items. Emerging content on social media such as TikTok inspires younger buyers to seek out rare commodities.
Furthermore, retro is ‘in vogue.’ Thanks to the expansion of internet marketplaces, it’s getting easier for people to find older watches. This ‘old school cool’ has also, in part, been helped by characters such as James Bond wearing traditional timepieces.
However, there are always risks in diving into the pre-owned watch industry. The risk of fraud and inauthenticity may put some prospective buyers off altogether. However, that’s where innovative startups are working to help bring older watches even more into the mainstream.
The Startup Potential in Pre-Owned Watches
By their very nature, ventures working in the pre-owned watch industry are disruptors. While it may seem simple to set up a marketplace purely for used watches, there are stringent checks and measures. As mentioned, authenticity is a significant factor in success for buyers and businesses alike.
Disruptors such as Delray Watch, therefore, have stood out as famous trailblazers in the niche. The company, founded from a kitchen-table setup, made more than $4 million in just two years of trading. This, on the back of a founding basis of just $4,000, shows significant hunger for authentic, second-hand luxury.
Delray Watch’s methodology is smart and simple. They invested time and effort in finding older, luxury watches they knew garnered interest online. One half of the team, Federico Iossa, even had his luxury watch YouTube channel ahead of co-founding. Combining fellow co-founder John Pietrasz’s technical experience, they established lucrative channels for selling their wares.
The brand’s success may largely lie in its ‘everyman’ approach. While traditional luxury watchmakers may invest in lavish advertising, Delray’s core audience is still YouTube viewers. They are everyday people who learn about attractive watches from video content and then click to buy.
There is, as a result, clear potential for ventures to tap into the ‘convenience’ side of luxury watch-selling. Younger millennials and Generation Z are in-tune with online platforms, such as YouTube and TikTok, where sales are secondary. These platforms, already used for entertainment, become convenient to sell through and buy from.
The potential for ventures to disrupt second-hand luxury watch sales is infinitely scalable. This is all the more thanks to the fact luxury watches were reportedly scarcer on the mass market in 2021. Rather than rely on first-party sellers, ventures have the opportunity to tap into an affluent market thirsty for vintage.
Watchr, for example, is a marketplace dedicated purely to pre-owned luxury watches. It’s another disruptive venture that’s found an opening around convenience. This online trading platform is risking capital on a niche - but one that looks likely to be paying off.
The Impact on the Watch Industry
The impact this thirst for vintage has had on the watch industry has seen exponential growth. As mentioned, CAGR is set to scale for the next five years. In addition, demand for luxury timepieces is surging both in the new and second-hand markets.
While any renewed interest in watches is excellent news for the industry, there are new competitors. Those luxury brands selling new timepieces are potentially taking hits from second-hand ventures. While those loyal buyers to their brands may not stray, cash-strapped vintage lovers will likely differ.
This is an interesting scenario in that the watch industry itself will continue to expand but curiously split on route. Real-time venture funding data will show that second-hand watch sellers continue to garner interest from traditional lines. It’s here that luxury brands of old may need to consider new marketing strategies to get ahead of the curve.
The same, arguably, may apply to fashion on a global scale. Fashion lines have continued to thrive despite booms in vintage sellers and second-hand marketplaces. However, the key is to pivot - in that even first-party traders may lean into the vintage niche.
Conclusion
Luxury watches will always be popular. However, indicators show that the way people buy these watches is changing. Younger buyers are shopping more creatively than ever before. Ventures, meanwhile, are meeting this creativity with lucrative, affordable fashion opportunities.
Smaller companies seeking to disrupt the watch industry will focus on convenience and rarity - as well as aesthetics. While mainstream fashion lines can and will lean into ‘old school cool’, this won’t solve concerns of accessibility and cost. Therefore, it will be interesting to see the state of the industry in the years to come.
In the meantime, startups are working hard to provide more opportunities to those looking for affordable luxury. Could this lead to major changes in how we buy watches for good?
Topic: Startups
