Glynn Davis, our regular columnist and founder of Retail Insider sits down with Robin Phillips, CEO of Watch Shop and LuxEcom.
Tell us a little about Watch Shop?
It’s a branded online platform for watches, smartwatches and wearables in the sub-£500 category. We have the widest range of brands at this price point. It’s a truly branded platform as many of our 126 brand partners have their own separate branded ‘rooms’. For our gold status partners (the top 20 brands) we also do co-marketing campaigns with them that includes social media and CRM. It’s a symbiotic relationship as we get products early from them and also get access to exclusives.
You also run LuxEcom, what does this involve?
Our broad range and brand relationships have put us in an elevated position in the UK and we’ve been able to build our own technology platform and do same day/next day delivery from our own warehouse. With this, we’ve created the LuxEcom business that provides online shop-in-shops – or concessions – to the likes of Debenhams and Boohoo for watches.
Being able to offer this marketplace platform to retailers has brought about a step-change in our business as it leans into what’s happening in retail where they are going towards being branded marketplaces. We buy and hold the stock for them, which is efficient and profitable for both of us. Debenhams was the first customer and we’ve just signed up another big name.
How’s growth going across the two?
A bigger proportion of our sales will come through third-party marketplaces in the future as we don’t expect the core to grow much. Since Debenhams launched last September it accounts for 10% of our total volumes. At the moment we’re laying down an EU fulfilment capability so we can do same day/next day delivery for European retailers. We can then grow our marketplace business across Europe.
How well has the watch category moved online?
I’ve been at Watch Shop for three years and the trend has been for increased online sales as they move from physical shops. Pre-Covid-19 around 36/37% of watch sales were online and now I reckon it is more like 50%. We’re looking at AR for virtually trying on watches but the problem to date has been that running it on our website involves a broken customer journey [as they switch to their camera]. When we are on other retailers’ apps – via our shop-in-shops marketplace business – then we’ll be able to introduce AR.
What’s the best route for customer acquisition and how do you retain them?
We’ve worked hard on our content strategy that has included things like watch collecting and we’ve also gone beyond watches into shop-the-look content. We’ve also worked on building awareness and directing traffic, helped by social media. Eighteen months ago we didn’t have any social media but we’ve now got a mini social department that works heavily with our social media agency. We’ve directed our marketing budget into social media having switched out of TV, which we’ve stopped doing because it’s not clear what are the returns. It’s also difficult to measure the ROI of social but we know that when we stopped it for a brief period it had a detrimental effect on the business. Retention of customers has not been a major focus as we are more of a gift business with purchases maybe only two or three times per year rather than more frequently.
Personalisation is a big trend, how are you dealing with this?
We’re looking to do a better job and so we’ve done some work on the database with more thought given to building content to different customer types on the various channels. We’ve got a couple of tools on the website to identify traffic and then serve up relevant emails to these people. We’ve certainly seen our conversion rates improve year on year and also our NPS.
Why do you only have one store and are there plans for any more?
Historically it was a jewellery shop and one of the founder’s sons was interested in watches and technology and so he set up Watch Shop 14 years ago. We’ve kept the shop because in order to be able to sell certain Swiss brands online we need to also have a physical store presence. It will also be helpful when dealing with multichannel retailers for our shop-in-shops business as we understand the language of stores. This will come in handy when doing click & collect with them for instance.
What are your plans for Watch Shop and LuxEcom?
We’ve developed a number of own-brand watch collections working with a watch design house and the recognised manufacturing supply chains. This has enabled us to get our capability nailed down before we go to third-party retailers and are able to offer them own-label options as well as the big brand watches on their shop-in-shops.
A recent project was with the WatchPro website that publishes specialist content. We provide them with a full e-commerce marketplace capability. This highlights how through the LuxEcom business we can provide different levels of solutions right up to handling all the e-commerce elements for third-party organisations.