Unreasonable price increases and paying more for less

Jim Dollares
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Are you thinking that TAG are trying to move away from being people's "first nice watch"? I think they'll probably continue their strategy of trying to be the Swiss entry point, as well as stretch the brand up to tourbillons, gold and diamonds. If Jim can no longer afford any of TAG's products in 5 years, then something will either have gone badly wrong for his career, the Swedish economy, or TAG itself.
To me it is very clear that they are running from the "first nice watch" profile that they have had before. A standard steel Aquaracer now costs equal to £3300. Prices have doubled or more since I got interested in TAG in 2017 and every year we see no sign that they are slowing down. Inflation is ofc a part of it but it does not explain the price increases from TAG and many other brands.

The whole point of the ABTW article is that yes, something might go very wrong if the Swiss don't stop to think this through before just hammering on with the price increases.
 
bpsmith
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The question is whether they prefer vanity or volume?

Assuming profit margin is linear, do they want to sell 10 x £2k watches or 2x £10k watches. Same revenue, different buzz.

That’s assuming the likelihood of those sales is equal too. I would guess there’s more market for volume personally, but they don’t like that I guess, which I also understand.

Not just TAG Heuer btw.
Edited:
 
Aquagraph
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The way I see it is this. Rolex is moving up in price because they are underpriced. Not in value, but what the market demands. If people are prepared to pay over retail then clearly Rolex are underprice. So Rolex move up, but Omega can't be seen as a 'cheap' alternative to Rolex so they move up and so it goes on... everyone shuffles upwards to maintain their perceived market value and place in the pecking order.

Also. Jim spent nearly £6000 on his Carrera. If you can afford to spend £6000 you can afford to spend £8000, it just takes another year.
 
bpsmith
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Totally agree with all of that too.

The luxury market is definitely a complicated beast.
 
Aquagraph
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And yet, used prices aren't going up pro rata. So the used market becomes better value, that is the problem the companies face now.
 
imagwai
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The other problem is falling demand for luxury watches. Which kind of makes the entry point (e.g. F1) an important factor.
 
bpsmith
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imagwai imagwai
The other problem is falling demand for luxury watches. Which kind of makes the entry point (e.g. F1) an important factor.
That’s definitely the other factor which makes it tricky.

I started out looking to spend £2.5k, but soon realised that I could get my Seamaster for £4k after discount. I was prepared to stretch that budget but would I have if the current pricing, at £5.6k, was in place? Tough question, for first luxury watch!
 
Jim Dollares
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If you can afford to spend £6000 you can afford to spend £8000, it just takes another year.
This might be true for some but it doesnt change the fact that the CBK221B was a limited edition Carrera priced £5250 in 2020. The Seafarer is £7000. This is 34% more expensive. The Porsche 963 LE is £8000 which is 52% more than the 160th anniv. LE Carrera aka Ice King.

Continuing in this pace, similar LE's will be at least £12-13 000 in 2030. I know for sure that this forecast will not just be "save another year" for me, it is simply not even close to how much I would ever pay for a Carrera.

But who knows, if I am lucky I can buy a quartz Formula 1 for £4000 🙄
 
Albert-AMG
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bpsmith bpsmith
The question is whether they prefer vanity or volume?

Assuming profit margin is linear, do they want to sell 10 x £2k watches or 2x £10k watches. Same revenue, different buzz.

That’s assuming the likelihood of those sales is equal too. I would guess there’s more market for volume personally, but they don’t like that I guess, which I also understand.

Not just TAG Heuer btw.
It would be acceptable that they change the range, leaving the simpler models, and go from offering watches for £2k to offering completely new models -much better- at £10k, with a difference in quality, materials, movement... that justifies that difference in price.

Obviously they would be targeting another target market, possibly losing many customers in exchange for gaining a few, but possibly with a much higher profit margin for each watch sold. Perhaps they would prefer to sell fewer units but earning more for each one... they are quite free to do so, and their customers -old and new- are free to buy these new models or not... but what I do not find justified and seems to me a mockery towards customers, is that exactly the same model of watch, without any change, year after year increases in price in a disproportionate way, when its entire design and manufacturing process is more than amortized. I am referring for example to the abusive price increases 🤬 of the unchanged Monaco CAW211P :whipped:
 
Jemagloh
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Albert-AMG Albert-AMG
It would be acceptable that they change the range, leaving the simpler models, and go from offering watches for £2k to offering completely new models -much better- at £10k, with a difference in quality, materials, movement... that justifies that difference in price.

Obviously they would be targeting another target market, possibly losing many customers in exchange for gaining a few, but possibly with a much higher profit margin for each watch sold. Perhaps they would prefer to sell fewer units but earning more for each one... they are quite free to do so, and their customers -old and new- are free to buy these new models or not... but what I do not find justified and seems to me a mockery towards customers, is that exactly the same model of watch, without any change, year after year increases in price in a disproportionate way, when its entire design and manufacturing process is more than amortized. I am referring for example to the abusive price increases 🤬 of the unchanged Monaco CAW211P :whipped:

I thought it was equally ridiculous that a limited model, CAW211J.FC6476, had a few pieces that went unsold and TAG Heuer raised the price on them when they resurfaced. The watch was already produced, but sure, jack up the price while trying to push the unsold pieces. That makes perfect sense. 😒
 
dtf
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The Swiss watch industry pricing reminds me of when Tesco (uk supermarket chain) tried up safeguard their profits during the 2008 financial disaster by jacking up their prices. Didn’t go well.
 
OttoWilliam
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I might be skipping few earlier posts since it's already a long one but it is interesting topic so please don't mind me joining.

TLDR: Carrera nowadays probably not a "first nice watch" anymore ( I don't know if it is ever was, but my point is now more so than ever).

From my perspective, Longines could be the everyone's "first nice watch" now. (although I never had any luck with them. Doesn't fit well in my hand"
 
Pitfitter446
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Aquagraph Aquagraph
Also. Jim spent nearly £6000 on his Carrera. If you can afford to spend £6000 you can afford to spend £8000, it just takes another year.
Aye but, in the year Jim saves another 2k the 8k watch has increased and is now 9k(£€$ whatever)?
 
Jim Dollares
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That's the price of luxury!
I am starting to think that one day we will learn that all this time, Rob has been the sales director of a large Swiss watch company
 
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