In this package
- The exclusivity club
When design ace Giles Ellis decided he wanted a watch that was an exact match for his demanding personal requirements, he looked into the idea of making his very own. What followed was a passion-fuelled voyage of discovery that quickly blossomed into the formation of Giles’ own watch company. Five years on, the first of his exquisite, luxury timepieces is winning awards.
Giles named his enterprise the Schofield Watch Company. But you won’t find either of his launch models in any shops, because he is so protective of his brand – and has made their supply so limited – that he only sells them online. He made just 400 watches in total, and for the third timepiece in his collection, he’s planning on crafting just 31.
“I wanted to keep supply limited because that way the consumer gets exclusivity,” says Giles. “But it doesn’t come without compromise from a business point of view. You run into trouble when you run out, because when you do it’s hard to back-track and make more.”
He has no regrets, however, because he says it was essential that the buyers of his watches felt like they were gaining access to a club. And as he points out: “You can’t have a club without having limited entrance.”
A marketer’s dream
Limited editions have been a favourite of the luxury-marketing men for decades, and when they are successful they infuse a product with a sense of rarity and exclusivity. But it’s not just smoke and mirrors: by limiting supply, so too is a manufacturer putting a cap on sales. Though the price hike that inevitably comes with a limited edition will often offset the potential revenue that might otherwise have come rolling in from a more widespread release, it is all a delicate balancing act.
For the luxury-goods makers, however, limiting supply is generally part of their products’ enduring ‘blink-and-you’ll-miss-them’ appeal. And a limited edition of 50 that sells out in a week – leaving hundreds of would-be buyers cursing themselves for not being quicker – is arguably a win-win for everyone. The lucky few who managed to buy enter a rare and select club. For the buyers who missed out, the idea of being a little bit more determined next time is subtly reinforced. And for the brand, it hammers home the message that entry into their little world is a very special thing indeed.
“Exclusivity obviously means that a product is not widely available,” says Houyem Chaib Lababidi at the College of Business and Economics at UAE University. “Buying something that’s a limited edition appeals to those who want to stand out from others. It can reinforce your status in certain social circles or make a statement about your success. When they buy rare and well-crafted objects, people distance themselves from the masses.”
Everyone from jewellers to fine-furniture makers to photographers have cottoned on to the value of the limited edition and embrace the sense of occasion that is created by virtue of their products’ scarcity. Not that limited editions necessarily have to be ultra-expensive. As Giles says, they simply need to add value to a product, and sometimes the mere suggestion of exclusivity will do exactly that. The unique selling point of upmarket dating sites like millionairematch.com, for example, is that they only allow in people who earn high salaries - in their case the minimum is $150,000 (Dh550,500) a year. Members, therefore, feel special, even though annual fees are just a couple of hundred dollars.
At the other end of the spectrum, relatively unknown brands have been known to launch outrageously expensive limited editions with little real chance of selling out. A $100,000 iridium-bladed shaver from a US company called Zafirro is unlikely to be seen flying off the shelves, but as the world’s most expensive razor, it certainly grabs column inches.
A $100,000 shaver, were you to shell out for one of the 99 available, might well fall into the ‘look but don’t touch’ category. At that price, would you really use it? It’s a question that frequently goes hand in hand with the top tier of limited-edition goods, where the higher you go, the more supply tends to diminish. As luxury marketing expert Laurie Milne explains, this paucity of supply is often down to the fact that it’s physically impossible to make more. “Most ‘exclusive’ brands only have a certain production level and do not have the capacity to exceed it,” he says. “At the same time, global demand for luxury products is growing – it’s growing faster than the manufacturers’ ability to supply.”
Recession, what recession?
In luxury watchmaking, Giles explains how the supply chain can be affected by the availability of just one part. “There’s enormous demand on limited supply,” he says. “Hairsprings in watches, for example, are only made by one or two companies in the world.”
“In some cases,” adds Laurie, who runs a company called twelve-thirteen.co.uk, “a single country could consume the entire capacity of a luxury brand.” Which explains why Louis Vuitton might not have that new, heavily advertised handbag when you visit the store. Or why the new Aston Martin One-77, the English company’s phenomenal new $1.8-million supercar, sold out before most of the world had ever even seen one.
“We learn about the success of a limited-edition piece when it is sold out and there is still further demand,” says Markus Doettling, managing partner of a family-run German luxury safe-making company which bears his surname. “Sometimes it can be a bit disappointing for the customers who didn’t
get one, but they know that we will come up with nice new ideas and, of course, more
Investments and integrity
With the right brand, the right product and the right cap on supply, then, almost anything will sell out quickly. But does that mean that luxury brands might give below-par products the limited-edition treatment in the hope of boosting sales? Laurie thinks not. “What would be the point?” he says. “These days everything is so public that a strategy like that would be discovered very quickly.”
And it would damage the brand. Which is the marketing department’s most cardinal of sins.
“When you buy that Vuitton handbag,” says Giles, “you’re predominantly paying for the marketing, and the value of that to the customer is cachet, and having an iconic and recognisable brand. Rolex spends an incredible amount on marketing, and that marketing is then reflected in the price.”
It is precisely because this management of the brand is so important that you don’t find Rolexes in every other store on the high street. “I get approached by watch shops daily,” says Giles, “all asking about stocking a Schofield watch in their store. While that’s flattering, a lot of these places would damage my brand. You have to consider the atmosphere of the shop, the location, the staff and how they might represent my watches. The whole point of walking into a very expensive watch shop is that there are security guards, it’s slightly intimidating – and it’s a privilege to be in that environment. Take that away and the exclusivity is gone.”
While not exactly duping the consumer, the marketing departments of the luxury brands seem to have no shortage of ideas when it comes to thinking up something on which to base a limited edition. The Year of the Dragon in China, 2012, for example, has so far seen a limited edition dragon-themed Rolls Royce and even a Versace handbag.
Also bedazzling the limited-edition aficionado this year are a diamond-encrusted Canon IXUS digital camera at $43,000, a Japanese skincare cream at more than $13,000 for a 50-gram jar and even a Premium Edition of the videogame Resident Evil 6, which costs $1,300.
But maybe limited edition doesn’t quite cut it for you. Maybe you’re only interested in the one-off, the item so rare that you can confidently state that you’re the only person in the world to own it. If so, you’re probably cut from the same cloth as businessman Saeed Abdul Gafour Khouri, who spent $14.3 million in 2008 at an Abu Dhabi auction and now gets to drive around with a car number plate that simply reads: “1”.
Occupying similarly territory are made-to-order items, which have become increasingly popular. Hallowed Swiss watchmakers Vacheron Constantin, for example, has a service it calls ‘Atelier Cabinotiers’, which is a special workshop dedicated to building bespoke, one-off timepieces. While no strangers to desirable limited editions – its three new Metiers d’Art Les Univers Infinis watches are limited to just 20 of each model – Vacheron’s bespoke service is as prestigious as watchmaking gets.
Says Laurie: “Bespoke is certainly the sub-trend that we’re seeing evolving. To satisfy the uber-rich, luxury brands are making more and more outrageously expensive variations of their product. It is perfect for brand aspiration, great for column inches and a PR man’s dream.”
Which brings us neatly back to Giles and his horological adventure; he might not have made the single watch he originally set out to, but along the way he has created a luxury brand and cleverly set about his entry into the market. “We needed to become a niche brand in a very overcrowded arena,” he says. “Limited editions also helped me to test the water. And it’s much safer to do that with a limited run than with making an enormous quantity.”
The one – admittedly pleasing – snag, however, is that The Schofield Watch Company has been a victim of its own scarcity. Almost all 400 of Giles’ first two watches, he says, have now sold out.