Vintage Watches Sell While New Ones Stagnate
The market for wristwatches is a strange one, and right now, the entire industry is in a state of volatility. People weren’t overly concerned last year when Apple introduced their first smart watch, as gadgets like that weren’t expected to overly impact the fashion watch market. As the Apple Watch hasn’t exactly set sales records, no one was initially too concerned. But sales of new wristwatches are falling, yet the sales of vintage watches are on the rise.
That’s kind of a strange notion, and there’s no question that smartwatches are hurting new watch sales. The latest company to complain about losing sales is Fossil, whose stock fell 29% this week after an announcement that sales were off. Smartwatches were assigned the blame.
Reasons for New Interest in Vintage Watches
On the other hand, sales of vintage watches are on the upswing, and collectors of vintage timepieces can’t seem to buy enough of them. Furthermore, they can’t seem to spend enough money on them. Why is this happening? There are a few reasons:
The markets for new wristwatches and vintage ones are completely different, as are the buyers and their demographics. While there are some timepieces that sell for huge amounts of money when new, the vast majority of timepieces sold around the world are in the modest $50-$200 range. The buyers for these timepieces are typical consumers with typical incomes. They also don’t necessarily have a lot of discretionary income, so they’re likely to have to make a choice when they make purchases – smartwatch or traditional model? Many consumers aren’t likely to buy both, and if they’ve already got a smartphone, they’ll likely decide that a smartwatch will make a good accessory for it.
Buyers of vintage watches, on the other hand, are likely collectors. That means that they’re likely in a better financial situation than buyers of new wristwatches. They are less likely to be burdened by the idea of buying or owning more than one timepiece, and as collectors, they’re actually interested in owning more than one timepiece. What’s happening in the world of smartwatches isn’t likely to concern them at all; they’re interested in jewels, provenance and complications, not in whether the watch they’re buying can show them incoming email messages.
Wealthy buyers are becoming wealthier, while middle class income stagnates. This is undoubtedly a factor, as well. People who are buying vintage watches are in a higher income bracket, on average, then people who buy new wristwatches, and over the past twenty years, the income of the top 1% of the population has increased dramatically, while the income of those in the lower and middle class range has remained stagnant. Buyers of vintage watches have a lot more money to spend on everything than everyone else does.
The market for vintage watches is better known than it used to be and is getting a lot more attention in the press. A few decades ago, before the Internet, watch publications were primarily writing about new timepieces, as their revenue largely came from advertisements from the watch manufacturers. There wasn’t any money in writing about vintage watches, as sales of the new ones, driven by product reviews, were how the publications were making money. Today, there are numerous blogs and Websites devoted exclusively to writing about and selling vintage watches, and a lot of people who are interested in the watchmaking craft are now learning about older models.
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Big ticket sales drive more big ticket sales. When a watch sells for an astronomical amount of money, such as the $24 million that someone recently paid for a Patek Philippe Supercomplication, it gets a lot of press. People who might not have read about such things in the past can be drawn to such articles and they can inspire the interest of well-heeled buyers who previously had no interest in, or perhaps weren’t even aware of, the market for vintage watches. Every time there’s an auction of vintage watches these days, sales records are set. This gets more buyers interested.
Such sales get more sellers interested, too, and when vintage watches sell for record amounts at auction, collectors who own other vintage watches that are rare or unique might be tempted to part with them.
While the market for vintage watches has traditionally revolved around Patek Philippe and Rolex, other brands are drawing attention, too. Rolex has long been popular with collectors, and while their watches are expensive, most models, even the vintage ones, are relatively common. They were sold in fairly large quantities when new, as vintage watches made by Rolex in the 1960s and 1970s were more affordably priced than current models. While they sell for a lot more money than they used to, they’re still far more affordable than older models by Patek Philippe. The sky-high prices being paid now for those two brands are luring collectors towards other models and brands.
This sort of skewed market isn’t unique to the watch industry. In the 1980s, the music industry introduced the compact disc, and sales of vinyl records decreased to almost nothing by 1990. Despite this, the collector market for rare records remained quite solid, with record prices being paid on a regular basis for vintage albums by the likes of the Beatles or Elvis Presley. While the music industry did struggle for a number of years, the sales of vinyl records have made a resurgence, and they’re selling today in numbers not seen since the 1980s.
Vintage Watches Will Likely Increase in Value
As collectors and investors seek out new places to put their money, the sales of vintage watches will likely increase. Similarly, as the novelty of the smartwatch wears off, the public may ultimately decide to go back to buying designer watches and fasion watches. They are, after all, a lot more attractive than smartwatches, and for many buyers, the appearance of the timepiece is just as important, if not more so, than the function. After all, most people are still going to carry cell phones with them whereever they go, and the phones can always tell the time.
Still, if you’re interested in buying vintage watches, the prices are likely to keep going up.