Deloitte Swiss Watch Industry Insights 2024

Spotlight on the pre-owned market

Author:

Karine Szegedi

Swiss Watch Industry Insights 2024

In recent years the Swiss watch industry has experienced a remarkable transformation, driven by shifting consumer preferences and the rapid evolution of digital marketplaces. We have been analysing these shifts for a decade in our Deloitte Swiss Watch Industry Study. This third Spotlight of our Deloitte Swiss Watch Industry Insights 2024 series investigates the burgeoning pre-owned watch market – which is reshaping the way enthusiasts and collectors engage with horology.

By examining consumer behaviour and market dynamics, we aim to illuminate the opportunities and the challenges for stakeholders in this fast-developing area of the iconic Swiss watch industry. We highlight the economic significance of the pre-owned market and the powerful emotional connections that watches forge with their owners.

About the spotlight

Deloitte Swiss Watch Industry Insights 2024: Spotlight on the Pre-Owned Market is the final of a three-part Deloitte Swiss Watch Industry Insights 2024 series (see the first Spotlight on India here and Spotlight on the female watch market here). It provides an overview of the Pre-Owned Market for the watch industry.

The Spotlight is based on five years of online surveys conducted annually by Deloitte from August 2020 to September 2024, as well as interviews with industry experts. Deloitte surveyed more than 6,000 consumers in the domestic Swiss market and top export markets for Swiss watches: China, France, Germany, Hong Kong, India, Italy, Japan, Singapore, the United Arab Emirates, the United Kingdom and the United States.

Independent in its approach and drawing on our research capabilities, the Deloitte Swiss Watch Industry Insights Spotlight series is a holistic industry assessment comprising diverse points of view.

Key findings

I run quicker than you

Even though the pre-owned watch market has normalized in recent months, its growth continues to be higher than that of the primary market. We believe that within the next 10 years, the pre-owned market will be as big as the primary one.

Salonfähig

Global consumer interest in buying pre-owned has doubled since 2020 whereas indifference has halved showing a much larger penetration of the pre-owned watch business amongst all consumer stats, geographically and demographically.

Hype for vintage and neo-vintage models

Rare and vintage watches are seen as desirable. Consumers also favour neo-vintage watches, combining vintage aesthetics and modern tech. Genderless vintage watches are in vogue among Gen Z and female consumers. Independent brands that offer craftsmanship and exclusivity are increasingly popular.

Crystal ball in my hands

Recent evolutions enhancing transparency and certifications have raised trust in the market and adding confidence in the buying behaviour. A Certified Pre-Owned (CPO) timepiece has undergone rigorous inspection, servicing, and authentication by the manufacturer, or an authorised retailer and consumers are willing to pay a premium for trust in return for peace of mind.

Dime in my pocket

One in five consumers sees a new or pre-owned watch as an investment. Collectors are now prioritising technical excellence and historical significance, features which help make watches enduring investments.

The best of two worlds

More and more brands are entering the Certified Pre-Owned market, as a strategic complement of the primary market. Whether launching a vintage business, building on the brand’s heritage, proposing trade-in solutions, collaborating with dealers or certifying the timepieces for a more trustworthy market, CPO can simply no longer be disconnected from the primary watch market.

Which way to go?

There are different ways for businesses and brands to begin their journey, from owning the pre-owned inventory (“1P”), holding third party inventory in consignment (“2P”) or running a marketplace (“3P”). The risks and rewards differ.

Some of the topics covered in the paper include:

The products

The pre-owned watch market is a treasure trove of timepieces that cater to collectors and enthusiasts of all tastes, offering access to a wide range of styles and eras. From storied vintage models to contemporary classics, the market is divided into three main categories: vintage, neo-vintage, and modern watches.

Vintage watches

Typically defined as watches produced before the 1990s, these pieces carry a sense of history and nostalgia. They often feature unique designs, mechanical movements, and craftsmanship that reflect the eras in which they were made, making them highly sought after by buyers.

Neo-vintage watches

Bridging the gap between vintage and modern, neo-vintage watches are those produced mainly from 1990 to the 2004. Neo-vintage watches blend the best aspects of classic horology with contemporary functionality, offering buyers a unique opportunity to own pieces that have both a heritage-inspired aesthetic and the durability required for regular use.

Modern watches

Encompassing pieces from year 2005 to the present, modern watches boast cutting-edge technology, contemporary designs, and innovative materials. These watches can incorporate visual and stylistic elements of vintage designs but are enhanced by modern innovations in materials, movement technology, and daily wearability.

The consumers

The pre-owned watch industry has grown significantly in recent years. As shown in Figure 10, the likelihood that survey respondents would buy a pre-owned watch in the following year (ie. those who are “very likely” or “somewhat likely” to buy) has doubled between 2020 and 2024, while the number of respondents who are “not interested” has almost halved over the same period.

The sellers

The type of platform a business uses for the pre-owned market are diverse. These platforms are commonly categorised into three types: 1P (first-party), 2P (second-party), and 3P (third-party). Each model comes with its own set of advantages and risks, particularly in terms of inventory management, capital investment, and potential exposure to financial losses. All three are part of the market’s dynamics.

1P – Stock-based model

Under a 1P platform the business holds physical stock that it owns and sells directly to customers. This is the traditional retail model, where companies like Bucherer, Watchfinder & Co, the 1916 Company (formerly Watchbox), Watches of Switzerland and most of the physical stores operate by purchasing inventory upfront and selling it through their own channels. The capital investment and financial risks are highest here because the business must invest in stock and bears the full cost of inventory. Some businesses specialise in pre-owned whereas for large, mainly primary market retailers, such as Bucherer, Watches of Switzerland and Ethos, this is an additional, recently launched business.

2P – Consignment model

In a 2P platform, businesses manage the sale of products without needing to own the inventory legally, even though the products are physically held by the seller. In the watch industry, Auction houses like Christie’s, Sotheby’s and Phillip’s and platforms like Wristcheck operate a consignment model. The business takes possession of the product only when a sale is made, significantly lowering the financial risk. Clauses like reserve prices can nevertheless introduce some further risk.

3P – Linking model

3P platform connects buyers and sellers. It often operates as a marketplace, like Chrono24, eBay or Bezel. In this model, businesses do not hold or manage stock themselves but instead facilitate the sale of products from other sellers. The financial risks are minimal for the platform itself since it typically earns only a commission on each transaction. Sellers bear the responsibility for holding inventory, and the platform does not directly take on any stock or capital investment risk. This model requires additional safeguards to maintain trust in the market, as discussed below.

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Deloitte Swiss Watch Industry Insights 2024