How One Small Family Business Is Tapping Into The Luxury Watch Market
In an age of discount online sites and consumers riding the bargain bandwagon, it may seem a tough gig to sell a $1.5 million Swiss watch.
But Steve Rom, who co-founded his small family business The AVSTEV Group with his son Marc, says being a successful player in the luxury business isn’t as hard as you might think.
“It’s a competitive industry, but luxury is not a tough sell in Australia,” he told The Huffington Post Australia. “There are the three giants and then there’s us. We don’t want to compete with them -- we are happy to be a small player.”
AVSTEV is a distribution company for high-end Swiss watch brands Ball Watch, Frederique Constant, Girard-Perregaux, Raymond Weil and T F Est. 1968. Rom says concentrating on buyers’ desires, rather than their needs, has allowed them to build the business and help their retailers move stock.
“A Swiss watch is an investment, not an impulse buy,” he said. “People don’t walk into a store and spend $1000 on a watch on a whim.
“But we market the businesses cleverly: we do events, we do a lot of PR, we do airports and we do billboards. We only work with Swiss brands. Swiss watches are expensive watches because of the craftsmanship. I learned a long time ago that it’s not about the quantity, it’s the quality.”
Rom, who started the business 16 years ago after moving to Australia from his native South Africa, knew very little about watches when he tendered for the Raymond Weil distribution deal. But, after running a top-end liquor business in South Africa, he knew a lot about people who aren’t afraid to put their hand in their pocket.
“I was dealing with quality liquor in South Africa -- I wasn’t selling slabs of beer or bottles of wine for $9,” he said. “So I was comfortable moving into watches. I didn’t really know much about watches, but I knew a lot about high-end marketing.
“It doesn’t really matter what you sell, it’s all about how you market it.”
As a distribution company, the AVSTEV team don’t deal directly with clients -- they leave that to their retailers, or as Rom calls them, their partners.
“We have watches that are priced up to $1.5 million -- it’s the diamonds and the gold involved in the production. I have one being shown to a customer for the third time in Melbourne -- it’s coming from Switzerland under very high security. But every transaction goes through our partners -- we don’t deal directly with customer.”
But just who are these people buying six-figure timepieces?
“Our main customers would be Chinese and travellers -- these are the customers who buy the more high-end watches,” Rom says.
“Australian customers would spend between $3000 and $5000 on a watch. There is no real peak season to luxury watches although Chinese New Year is a very important time for us.”
Early on, Rom and his son Marc worked tirelessly to bring partners on board for their first range of watches, and Rom says it was a tough but rewarding time.
“It was a challenge in the beginning,” he said. “Marc and I started the company and it was hard work going from door to door but we worked hard and within three months we made a small profit and we were extremely proud of that.
“Raymond Weil was a nothing brand when we took it over and I am very proud that Marc and I built Australia to be a top three country in the world for sales, and we are still in the top five.”
These days Steve Rom handles more of the business development side of the business while Marc as General Manager is responsible for the day-to-day operations.
Marc Rom said working with his father in the family business has been a big learning curve.
“We started Avstev together and dad was very smart about it,” he said. “I was 22 so I worked my way up in the business. I spent time in the stockroom, working with the accounts team, and with the marketing team so by the time I became General Manager I knew everything about the business. I have grown up with AVSTEV -- it’s all I know.”
And Marc admits over the years the pair have ironed out the kinks that ultimately come with working so closely in a small business with a family member.
“In every family business you have moments where you don’t agree but we complement each other,” he said. “Dad is a very good people person and I am very good at the day-to-day management of the company.”
This article originally appeared on The Huffington Post Australia website on 22nd January 2016.