Deloitte’s Spotlight On The Pre-Owned Market: Bigger Than We Thought

Pre-owned has been a highly speculated space within the watch market and what represents an important part of the overall sales of watches. This segment has grown to be an asset class that is leading in value terms and actually growing at a rate faster than the primary market. Signaled by the major shifts in engagement and interaction of brands, retailers and consumers with pre-owned timepieces, the secondary watch market poses as a significant catalyst driving commitments and adjustments in the firsthand space. In its third and last instalment of the Swiss watch industry insights for 2024, Deloitte’s broad opinion survey provides an overview of the pre-owned market for the Swiss watch industry. This comprehensive performance analysis cites impressive gains for watches in the pre-owned segment through a period of volatility and establishes its persistence at levels well above those from 2020. This can be observed by ChronoPulse – Watch Index, a price indicator for the global secondary watch market developed by Chrono24.

In this article, we’ll deconstruct the key components of the study, examine its numbers, probe its findings and establish the forecasts, all so as to understand the secondary watch market performance better.

About The Study

For a decade, the Deloitte Swiss Watch Industry study has been an annual tradition providing valuable insights into various aspects of the watch market. Its latest instalment, the “Deloitte Swiss Watch Industry Insights 2024: Spotlight on the Pre-Owned Market” is the third spotlight for the year released in December 2024. Tracking the trends and data collected through online surveys conducted for over five years from August 2020 to September 2024, the report serves a detailed overview of the pre-owned market for the Swiss watch industry.

In its study, Deloitte surveyed more than 6,000 consumers per year in the domestic Swiss market as well as the top export markets for Swiss watches in Europe, Asia and the Middle-East. The latest investigation examines consumer behavior and market dynamics within the rapidly-burgeoning segment of the watch industry, the pre-owned market. Spanning 40 pages, this study is constructed from six key chapters, complemented by details of its contributors and key references.

Pre-Owned Watches: A Transitioning Market

Agreed, the pre-owned watch space has traditionally been a niche segment with very limited perception of investment value. This has drastically shifted in a decade as pre-owned watches continue to grow in significance as alternative asset classes for those seeking a solid hedge against inflation. What has been most impressive is that this asset has cemented itself as a solid long-term category, even though guaranteed growth is still cryptic. After achieving an impressive growth that peaked in March 2022, the explosive boom sort of leveled out gradually after and despite the price corrections, it still persists well-above pre-pandemic levels. Depicted below is the data from the ChronoPulse – Watch Index over the last 5 years which shows an overall growth of +26.38%.

According to WatchCharts Index, the pre-owned market performance in terms of overall price gains in percentages observed for the following Swiss brands have shown impressive growth over the past five years.

These numbers are consistent with the overall pre-owned auction sales for 2023, which if compared to the 2023 numbers, show impressive gains as observed in the EveryWatch Auction Season Report.

Impossible To Ignore Pre-Owned

The shift towards appreciating pre-owned exists owing to a number of inherent flaws within the primary market landscape. This particular space (primary market) which is valued at about $54 billion is restricted by production volumes and limited supply while facing a very high-demand, eventually leading to long waiting lists. To avoid the same, pre-owned watches fill the space, thus allowing buyers to take advantage of a wide inventory availability in minimal-wear condition and with attractive savings prospects.

As compared to 44% of buyers in 2021 who preferred pre-owned for cost savings, the 2024 data shows a growth of 5% in the same with 49% of consumers seeking pre-owned watches due to their affordability over new watches. According to Brian Duffy, Chief Executive Officer for The Watches of Switzerland Group, “We see that interest in the pre-owned market is driven by immediate availability, before ability to purchase vintage and usual timepieces. From a sustainability perspective, consumers are more valuing recycled steel and responsible packaging of new watches, amongst others.”

Moreover, the notion of pre-owned isn’t no longer negatively perceived and is equally regarded among collector communities and also by industry executives. The pre-owned segment of the market cannot be overlooked any more by brands, of which 71% of all industry executives consider pre-owned to having a positive influence on brand perception and value. As per data collected by the Deloitte Swiss Watch Industry Study 2023, depicted below is a detailed outlook into how industry executives view the secondary market/pre-owned market. The numbers indicate an almost undisputable importance of the pre-owned market for the overall luxury watch market.

Rapid Growth of The Pre-Owned Watch Market

The Deloitte study estimates the secondary or pre-owned market to be less than half the size of the primary market. If we reel in the data from our previous article on secondary watch market performance, according to stats from the survey conducted by the Boston Consulting Group, the pre-owned watch market is projected to be the fastest-growing segment of the industry, reaching $29 to $32 billion in sales by 2025. This report by BCG estimates the pre-owned market to be currently around $24 billion in sales value. Deloitte’s study too projects secondary market growth to be faster than the primary market and predicts that it will grow to be as large as the market for new watches in the next 10 years. This growth is significantly aided by the rise of e-commerce and online channels for purchasing pre-owned and coupled by the introduction of brand-approved Certified Pre-Owned or CPO programs, the market for second-hand luxury watches is only going to be larger in the coming decade.

Certified Pre-Owned (CPO) For Better Value and Trust

With a very impressive total transactional value of the secondary luxury watch market, the number of market players exploring the segment is also growing rapidly. Now brands themselves are tapping into the pre-owned space and alleviating a traditional flaw within the used-watch sale and purchase system, i.e. lack of brand-issued warranty and authenticity. If earlier buyers hesitated in exploring pre-owned owing to lack of brand authenticated and guaranteed inventory, the rise of Certified Pre-Owned (CPO) is going to eradicate this impediment now.

A non-CPO pre-owned timepiece isn’t necessarily an inferior product, but a CPO example definitely serves greater peace of mind and security in purchasing for it undergoes rigorous inspections, servicing and authentication process by the manufacturer or brand-approved channels. As per the data collected by the study from Bezel, a US-based platform for watch authentication, one in four watches fail to pass the authentication process. Numbers as such really enhance the customer’s trust in CPO and thus generate greater attraction for exploring CPO watches even though they usually sell for a small premium over non-CPO watches. Here's how brands plan to engage with the CPO market.

An interesting survey would be the comparison of pre-owned buyers who prefer CPO over non-CPO. Also, whether a non-existent CPO program by a brand can dent its perception among buyers as being unconfident in the quality of its products. This particular factor could drive more and more brands in the future towards development of in-house CPO programs. Overall, as per the survey conducted as part of the study, the likelihood that buyers would prefer a pre-owned watch in the following year has doubled between 2020 and 2024, while the number of buyers who are “not interested” has almost halved over the same period.

Neo-Vintage Watches: The Hyped Category Within Pre-Owned Space

The pre-owned market categorizes its products into three-main segments based on production eras, vintage watches (produced before 1900s), neo-vintage watches (produced between 1990 to 2004) and modern watches (produced after 2005). While each segment offers unique propositions to buyers, it is the neo-vintage category that is of chief interest to current buyers. This segment includes watches with a vintage touch but with modern utilitarian features making them perfect everyday wearables. Additionally, the segment offers timepieces with the new de-facto for desirable proportions with the best-selling models occurring between 35 and 40 mm in diameter. It is the neo-vintage segment which actually offers greater value propositions as the watches are curated in ‘like new’ condition and with aesthetics somewhat similar to contemporary portfolio examples, at least for the desirable pieces, buyers are even considering these over their retail counterparts. With savings to be made and waitlists to be avoided, the neo-vintage pre-owned watches are of particular interest in the overall market for luxury watches. According to Giovanni Prigigallo, Co-Founder and Head of Business Development for EveryWatch, “People look for value in neo-vintage. It still has the looks of a vintage watch but becomes waterproof and usable every day.” As observed from the 2024 Geneva auction season, the neo-vintage market has experienced a major surge in growth. As depicted by the chart below, the total sales value increased by around 150% since 2023, considerably overtaking the modern market.

Along with neo-vintage, independent brands have grown in popularity among buyers who value true factors of differentiation and superlative craftsmanship from their pieces. The study states the notable rise in desirability of timepieces from independent watchmaker brands such as F.P. Journe, Rexhep Rexhepi and De Bethune along with watches from Andersen Genève, Jürgensen, Philippe Dufour, Roger W. Smith, MB&F and Greubel Forsey. Neo-vintage offerings from independent brands often outperform their larger-brand counterparts in terms of value retention.

Here's an analysis of Chrono24’s estimation of neo-vintage revenue share by brand. Neo-vintage timepieces now account for 37% of Cartier’s secondary market revenue which has more than tripled within the neo-vintage space since 2018.

Consumers In Focus and Rise of Online Purchasing

Contributing to the rise in popularity, desirability and growth of pre-owned watches is a demographic increasingly gaining access to higher income avenues by tapping into novel resources driven by the rise of Silicon Valley inceptions. It is the millennials and Gen Z who are most likely inclined to buy pre-owned with interest percentages growing by +19% and +13% respectively in 2024 as compared to data from 2020.

According to Chase Pion, Co-Founder and CFO/COO of Bezel, “Younger buyers are reshaping the market; millennials and Gen Z are not just purchasing but actively trading, driven by changing tastes and liquidity. A watch loved six months ago could be replaced today and bought back tomorrow.” Among the Gen Z buyers, most are attracted to the affordable price points associated with pre-owned watches, with design and brand image closely following behind as chief factors influencing buying decisions. Another key factor aiding in the immense growth of pre-owned is the availability of accessible points of sale with 55% Gen Z buyers showing a strong inclination towards online purchasing.

It has also been noted that with the rise in popularity and reliability of digital platforms for buying pre-owned, such as Chrono24, The 1916 Company (formerly Watchbox) and Wristcheck, there is greater consumer comfort and confidence in purchasing online. This has also been cemented by trust established through the many celebrity partnerships that these platforms have achieved. Portuguese footballer, Cristiano Ronaldo and Formula 1 driver from Monaco, Charles Leclerc have both invested in Chrono24 in 2023 and 2024 respectively. Basketball stars Michael Jordan and Giannis Antetokounmpo invested in 2021 in the US-based platform, The 1916 Company (formerly WatchBox). Moreover, John Legend, J Balvin, Kyle Kuzma, Kevin Hart and Steve Aoki have made notable investments in Bezel, a platform for authenticated luxury watches in the US. Similarly, Tom Brady and John Mayer invested in Hodinkee, a US-based marketplace and watch editorial forum in 2020. Very recently, Wristcheck welcomed Kylian Mbappé as an investor in its digital marketplace.

Takeaways And Conclusion

Pre-owned is a market segment that’s impossible to ignore and is currently undergoing a remarkable transformation. This segment is now garnering exceptional attention and consideration directly by brands, most of whom have remained hesitant towards it in the past. It is the immense total transactional value of the secondary watch market that’s driving its favorable change and growth towards being as large as the primary market within the next decade.

As brands understand the importance of the pre-owned market, no longer can they afford to have it be managed and moved by third-party entities, thus resulting in the rise of brand-appointed CPO platforms. For the buyers, the ability to tap into a space that offers discontinued watches and exceptional timepieces in ‘like-new’ condition with significant profits is nothing but good news, and what this study projects is that in the near future, this is going to get even better. This rise in popularity of pre-owned is also indicating to the brands the current market preferences, thus helping them shape the portfolios of the future. Overall, the secondary market is moving really fast and towards being a space as big as the primary market.

You can read the full report here.