ByteDance’s Black Box, Target’s Inventory Turnaround, and the Resale Watch Market | Prof G Markets

Market Corrections

The luxury watch market has experienced a significant correction, with prices for pre-owned Rolex and Patek Philippe watches dropping by 28% and 47% respectively since their peak in 2020. Scott Galloway argues that this isn't a bubble burst but rather a healthy market correction, influenced by broader economic trends and the rise of competitors like Apple. He notes that the luxury market, much like the diamond industry, has created an illusion of value retention, but the reality is shifting.

The luxury market is taking a bit of a hit. It's not a bubble popping, it's more like a healthy correction.

--- Scott Galloway

This correction reflects changes in consumer behavior and economic conditions, with the Apple Watch now outselling the entire Swiss watchmaking industry 1 2.

   

Investment or Consumption

Luxury watches are often perceived as investments, but Scott challenges this notion, suggesting they are primarily consumption items. He explains that while these items may hold sentimental value, they rarely appreciate in monetary terms. The watch industry, like the diamond and handbag industries, promotes the myth of watches as stores of value, but Scott emphasizes that most people never sell them.

You buy them for consumption. They are not stores of value or investments.

--- Scott Galloway

He advises against viewing watches as investments, noting that if one ends up selling a watch, it likely indicates financial distress 3 1.