Thomas Baillod has openly expressed what many have thought, but chose not to say out loud. In Geneva, this is a crime. And yet, unexpectedly, Baillod became BA111OD, and the concept became a brand. Have you no remorse, Thomas Baillod? Following our previous trials in which Frank Huyghe of Ralf Tech, Yvan Arpa from ArtyA, and Mario Peserico from Eberhard & Co. took the stand, it’s now the turn of Thomas Baillod to respond to WorldTempus’s accusations.
With BA111OD, you’re accused of undermining the profit margins of the watchmaking industry – an industry you rely on for your livelihood.
Not guilty. The production cost of a watch accounts for only a small fraction of the final price. The majority goes to distribution and marketing. Traditionally, a multiplier of 7 is applied, a significant proportion of which is absorbed by intermediaries and marketing.
E-commerce, on the other hand, operates on a multiplier of 4. It relies heavily on marketing since it no longer maintains direct contact with the customer. I look for where the margins are highest – in distribution and marketing – and give that money back to our customers. This means I can achieve a base multiplier of 2, which has never been seen before in the industry. I’m more Robin Hood than Sheriff of Nottingham.
Thomas Baillod, you’re accused of restructuring the distribution model solely for your own benefit, throwing retailers to the wolves.
Not guilty. Retailers were already in trouble before I arrived on the scene. The first issue is pricing. It’s clear that, for any brand you care to mention, pricing is chaotic, with different prices on different websites, in different stores and on different continents.
The second issue is selective distribution. Brands struggle to maintain long-term partnerships, and to a large extent they don’t really understand distribution. My business model solves this problem.
The final issue is what I call “showrooming”, which refers to the tremendous efforts invested in creating a customer experience. Customers visit the store, enjoy the experience, decide which watch they want to buy, then go away and buy it online, for cheaper.
I’m not against retailers; on the contrary, I return value to the point of sale, not for the sale itself but for the experience it offers. I set up experience points, and they are compensated for that. This solves all three issues.
Thomas Baillod, it’s impossible to produce high-quality timepieces, especially with a tourbillon, at your price point. Guilty or not guilty?
Not guilty. It comes back to the perpetual question: “Is it too good to be true?” If you look at our watches, you’ll notice that we’ve named our tourbillon TVD, The Veblen Dilemma, in reference to the Veblen effect.
Named after economist and sociologist Thorstein Veblen (1857-1929), it describes the snobbery that assumes a luxury product’s high price makes it more desirable. Conversely, an affordable price generates suspicion. Our tourbillon presents a genuine exception to this rule; its base price of CHF 5,000 could lead people to believe the quality would be inferior, which is obviously not the case. We work with the industry’s finest subcontractors! We achieve this price through our business model, not by cutting corners on product quality.
Thomas Baillod, you attempted to sell your model to 25 brands, all of which rejected it. Why? The floor is yours.
Guilty. Perhaps I was a bit too early, attempting to present a slightly too disruptive model to a somewhat conservative audience! I was probably the first person in Switzerland to use the term “phygital,” and no one understood. They were also too invested in their existing business model to pivot quickly. When you’ve been riding a big wave for an extended period, you can’t just jump off and get ready for the next one. In fact, you may not even see it coming...
With BA111OD, you’re accused of capitalising on digital technology at the expense of traditional craftsmanship, particularly with bracelets that are equipped with electronics.
Not guilty. We make 100% mechanical watches. The technology we incorporate is non-invasive and even invisible, as demonstrated by the chip we integrated directly into the sapphire glass – possibly a world first. The technology complements the mechanical beauty, but if we hadn’t mentioned it, no one would have noticed. It’s like the genie in the lamp: it only appears if you rub it. If you do nothing, nothing happens.
Thomas Baillod, you’re accused of wanting to disrupt the watchmaking industry while producing traditional designs yourself, such as three-hand, skeleton and tourbillon models. How do you plead?
Guilty and not guilty. Yes, I do create elegant watches for people who appreciate fine watchmaking. I’m not going to swap a tourbillon for pixels – that’s not what I’m about.
At BA111OD, we’re constantly exploring ways to enhance the customer experience. I believe we already have a slight edge. That’s why we positioned our crown at 4 o’clock. The entire industry traditionally places theirs at 3 o’clock, but at Baillod, it’s at 4 o’clock. We’re an hour ahead of the rest of the market...
