In today’s Wall Street Journal, the lead front page article entitled “Invisible Hand - How Top Watchmakers Intervene in Auctions” confirms the importance of the relationship between the prices fetched at auction for high-end second hand watches and the impact those prices have on the brands in the primary (new) market. Specifically, The WSJ article discloses that prominent watchmakers, including Omega and Patek Philippe, have for years bid on their own watches in aftermarket auctions to boost the perception (and create the reality) that their watches are investments that will increase in value over time. The net results for companies engaging in these activities include stronger brands and higher prices at the retail counter for their new watches. This phenomenon was first disclosed in Futureshop and highlighted as a key strategy in my book. It is not surprising that we are beginning to see the widespread adoption it in the luxury goods sector - not just to boost prices but to envigorate the underlying brand. Indeed, Omega - a one time prominent brand that saw a rapid decline in its brand value admits to recently using this strategy to revive the luster of its brand.

The WSJ article also briefly touches on the ethical nature of this activity - an important topic which I will leave for discussion in the future.

On the way to my book launch party last week, a friend mentioned that her friend decided not to monogram her new Goyard bag, as is the normal practice for this particular designer handbag. Why? Because it would be more difficult to sell it on eBay down the line. It makes sense. Depending on the style, Goyard bags can retail for over $3,000. Which means that even in the secondary marketplace, my friend’s friend should be able to easily get back four figures when she decides it is time to upgrade to a new style. A monogrammed handbag will sell for as much as 30% less than an unmarked one in the secondary market. Unless, of course, you are lucky enough to find a buyer for your Goyard with the same initials as yours.

The personalization of our possessions seems to be slowly becoming a thing of the past. Sentimentality is drifting away as consumers choose value over the novelty of an inscription. The retailers have realized this too and are using the knowledge in creative ways. I recently asked a contact at Tourneau for a watch that was in great demand. His response – “sure I can get it for you. I only sell that watch to good customers. But I won’t sell that watch to anyone unless they have it engraved.” Why? The watch was so hot that it could be flipped on eBay for 30% over the retail price. Will top brands use personalization as a way to diminish the flow of their goods into the secondary market?

At my book launch party this week, I personalized almost every book I signed. Why? Because I hope people keep their books after reading them – the personal note helps insure that. It also dilutes the value of a signed copy which should discourage people from hawking it for a quick profit on eBay.

Will monogrammed shirts and inscribed watches exist in the near future? Perhaps, if the demand for sentiment and the value placed on it is high - or if a shrewd brand gatekeeper uses personalization as a strategic weapon.