60 cookie cutters, 1 counterfeiter…and 1 unclear business strategy…
I don’t know why I’ve been sitting on this article for a couple months now…but since I am on the topic of TAG Heuer this week let’s take a look at an important topic – e-commerce. I first wrote about TAG Heuer’s e-commerce initiatives about 2 years ago (see: Tag Heuer opens to online sales – a controversial move by a leading watch brand? December 20, 2008), followed by a more extensive article noting expansion of the initiative (see: TAG Heuer Quietly Expands Authorized E-Commerce Initiative Aug 18, 2009). Lo and behold, since 2008 TAG Heuer has aggressively but quietly ramped up its the e-commerce platform from the initial 2 e-tailers to a current count of 60, (yes 60!) Authorized E-tailers.
Now at least TAG Heuer is trying to figure out how to make the Internet work with what is actually a very big and industry-wide problem — that is, an entrenched and geographically defined network of Authorized Retailers that is seemingly incompatible with a territory which has no walls and knows no boundaries…aka the Internet. But…like its doomed-from-the-start Meridiist mobile phone and its insanely over-priced “luxury” flash drives, I think that TAG Heuer’s “Authorized e-tail” strategy reflects a poor understanding of the e-commerce channel. So I decided to give the situation some greater scrutiny…
While on the one hand I give credit to TAG Heuer for being one of the more forward-thinking brands when it comes to the Internet – particularly for a brand of its size and stature – on the other hand I have to say “What the hell is TAG Heuer thinking with its e-commerce strategy?”
First, a quick look at what is known about TAG Heuer’s e-commerce strategy. Basically, TAG Heuer allows some of its Authorized Retailers to set up storefronts on a Tag Heuer-hosted domain (tagheuershop.com). Each “Authorized E-tailer” website is identical except for the swap out of the the name. Note also these storefronts are separate and distinct from (ie not seamless with) the dealer’s normal website, although in some cases Tag Heuer is *generous* enough to place a small dealer logo in the lower-right-hand corner of the page which links back to the dealer’s primary website. You can click on any one of the 60 Authorized E-Tailers here on TAG Heuer’s website and see for yourself what I am talking about.
Is a generic “one-size-fits-all” approach the answer for a luxury sales channel?
TAG Heuer’s unwillingness to relinquish any sort of marketing control to its dealers (by forcing them all to adopt a Tag Heuer hosted website) is a bit control-freakish but not uncommon in the luxury watch industry. Most watch brands simply are not comfortable relinquishing control of the sales experience, online or off. But this cookie-cutter approach is just awful. Why does Tag Heuer need a new subdomain for each dealer? They are, after all, nothing but a bunch of identical storefronts housed under the same domain and offering the same products at the same price (control your excitement, please). Why not just own up to reality and just have 1 tagheuershop.com and allow all dealers to re-direct to it and receive the lead-gen fee and/or share the commission? Particularly if TAG Heuer is handling order processing and fulfillment (which I don’t know for sure).
Overall, I get the impression that Tag Heuer is treating its Authorized Dealers like 3rd graders with this whole “authorized e-tailer” cookie-cutter approach. As a consumer, I am 100% indifferent as to which of the 60 e-tailers I would choose to purchase from — there is absolutely no differentiation across these sites, so what is the point?
Not to mention that gray marketers are now unabashedly ripping-off TAG Heuer’s own storefront designs. Which is ironic because the gray market is one set of dealers that Tag Heuer probably wanted to help diminish by implementing such an e-commerce strategy. The one clone site (that I know of) has 100% ripped off TAG Heuer — the site looks virtually identical to the TAG Heuer e-shop, including rotating “Authorized TAG Heuer E-Commerce” logo, but on the FAQs page the company clearly states that it is not an authorized Tag Heuer dealer. The other difference is that it is offering prices that are lower to any of those found on the official Tag Heuer e-shops. Interestingly, the site may have been taken down since I first drafted this article a couple months ago – I tried accessing it this morning but it would not load (I’m not going to give them unwarranted publicity by listing the URL). But I did take a screen shot (see below)!! Even if this particular site was taken down, knock-offs can pop up like weeds, which forces TAG Heuer to run around the Internet playing whack-a-mole.
Grey market dealer has ripped off the design of tagheuershop.com – including the “Authorized E-Commerce” logo. Note too, the gray-market DISCOUNTS being offered:
In summary, I just don’t see the logic behind Tag Heuer’s strategy here. It comes off as a weak, half-a** effort that a deep-pocketed sales and marketing powerhouse like TAG Heuer should be ashamed of. Of course I am willing to hear an explanation if TAG Heuer is willing to offer one, but if history is a guide they will stay hiding under their desks.
Maybe they should take some notes from brand such as Bell & Ross, Cartier and others. While the e-commerce platforms of these brands are not perfect, they are leaps and bounds ahead of what TAG Heuer is doing.
Well, that’s all I have to say for now. Please leave a comment and let me know what you think. If you are an authorized dealer (Tag Heuer or otherwise) — I’d also love to hear your perspective on the topic. Comment below, anonymously if you prefer.
Also, I recommend some more good reading on the topic over at my watch friend Ariel Adam’s blog, here.