As we rapidly approach the end of January, we look ahead at 5 trends we believe will shape the pre-owned watch market in 2022
If you've paid even a little attention to the market for pre-owned watches, you know that increased awareness has the market heating up, and with investment returns for watches growing, 2022 promises to be an exciting year.
Here are five more truths about the world of pre-owned watches we see heading our way.
1. Prices of pre-owned watches will continue to rise
There are three current trends in the watch market.
The price of new models being released is going up. As a result, a flood of investors has jumped headfirst into watches, and short-term profit wolves are driving inflated ( and we believe, unsustainable) demand.
Watch for the overall market to increase in value, but a handful of specific high profile and in-demand models rocket up and then come crashing down. You do not want to be left holding the bag on these.
Our take: Focus on the watches you know and love and avoid the hype train.
2. Margins will continue to shrink for sellers
Great news for buyers.
With attention comes transparency.
As more dealers enter the market and with the rise in ecommerce, the risk of price-gouging has diminished. Buyers have more access than ever to product information and sales data, while new, more modern business models from sellers ( think online and lower overhead ) mean better prices. In contrast, sellers are getting squeezed on margins.
There will be market shrinkage, as some traditional retailers won't survive in a more cutthroat market, but sellers will continue to benefit in the short term.
Our take: As with any purchase, do your homework, compare prices but remember cheapest isn’t always best. Look for a balance between price and great customer service.
3. Watches will continue to grow as an investment vehicle
While not a new practice, watches have gone from an investment of passion to a source of returns for the educated and savvy buyer.
While wine and art get more interest and exposure, pre-owned watches already sit at the third spot in the ranking of passion investments, even as the Chinese market ( the world’s wealthiest ) is only just getting started.
For anyone already in the market, 2022 will be the year to keep an eye on the value of your portfolio and decide whether it’s worth adding or swapping out watches from your collection.
For those not yet in the pre-owned watch market, 2022 might be the year to start paying greater attention to this sector.
If you’re interested in diversifying your investment portfolio, pre-owned watches are an area to watch, but like any investment, beware of the cowboys and know the risks.
4. Technology will drive new ways of buying, selling and investing in pre-owned watches
Covid has accelerated the adoption of ecommerce, and the watch market has followed suit.
In 2020 92% of Sotheby's watch lots went to online buyers.
Sotheby's also cites that the average price for watches sold online across all sales is up 50% compared to 2019.
As younger buyers and investors flock to watches, technology will lead to innovative ways to buy and sell watches.
New platforms will continue to appear but just as many will fall by the wayside as they struggle to attract capital to fund cash hungry models.
As Covid continues to interrupt our lives, keep an eye on the online space for better ways to buy and sell your watches.
5. Consolidation will happen with increasing frequency
The recent investment in WatchBox, at a nearly $1bn valuation, has brought a lot of new attention to the pre-owned watch sector.
With the market already valued at an estimated $20bn and expected to reach $30bn by 2025, this growth will lead to increased M&A activity as existing players look to increase their market share and see of potential future competition.
Likewise private equity, luxury conglomerates, and savvy investors not already involved will be drawn in by lucrative opportunities in the space.
2022 will be the year that M&A activity kicks into high gear.