Have you ever wished that you had a rich and generous aunt or uncle with exquisite taste and an extensive timepiece collection, so that you could avoid the staggeringly high prices of luxury watches by borrowing what you need for the big events in your life?
Your wish has been granted! Eleven James has introduced sharing into the refined world of luxury watches. It’s the Netflix and Airbnb of the elite watch category, and it is potentially a template for how to successfully build a modern luxury business.
At Dandelion Chandelier we’ve written before about how even the wealthiest among us are starting to soften to the idea of sharing – not owning – the most expensive luxury goods. Whether its luxury cars, private jets, super-yachts or vacation villas, more and more of the elite are openly willing to forgo ownership to gain the benefits of variety, sampling, and flexibility.
We first learned about Eleven James when we were investigating the opportunity to rent luxury fine jewelry for the holiday party season. Founded in 2013, it’s a members-only service. Applicants apply online for membership at various price tiers, and if accepted, gain access to an impressive list of luxury watch brands. New members receive a phone call from the Concierge Team to complete their member profile, choose an “access level” and confirm which watch they’ll receive first (they must provide a security deposit equal to one month’s membership fee).
–Enthusiasts get access to brands like Bell & Ross, Cartier and Tudor for $149/month.
–Aficionados can rent brands like Breitling, IWC and Rolex for $299/month.
–Connoisseurs have the choice of brands like Audemars Piguet, Breguet, Hublot, Jaeger-LeCoultre, and Vacheron Constantin for $499/month.
–Virtuosos can access all of the above, plus brands like A. Lange & Sohne, Parmigiani Fleurier, and Patek Philippe for $999/month.
Eleven James offered only men’s watches when it launched, but late last year began offering women’s timepieces as well. The first women’s products ship this month, and in addition the company recently announced a new debt and equity fundraising round of $30 million. Total membership is reportedly in the “low thousands” to date.
Recently, I had the opportunity to talk with the Founder of Eleven James, CEO Randy Brandoff, about how the company came into being, and what the new year holds.
Brandoff is highly experienced in the luxury space – he was employee #1 at Marquis Jet and later CMO of NetJets. Over time, he developed a keen understanding of both the mores of the wealthy and the potential for luxury collaboration models that foster access, experiences, community and personalization. As a luxury watch aficionado, Brandoff found himself unable to afford as many timepieces as he would have liked – that insight led him to launch Eleven James, with initial funding from friends and family (the company remains the only national player in this space, although there are regional services operating in a few major metro areas in the US).
Eleven James describes its offering as an opportunity for members to “discover, experience and share.” It provides access to watches with a retail price of $5,000 – $50,000 for a fraction of the cost, and also allows those who have the means to purchase a luxury watch the chance to test-drive various pieces before buying. In the “Membership to Ownership” program, membership fees are applied to the watch’s purchase price, as is a membership discount. In addition, members are invited to exclusive events, and receive discounts from partner companies and assistance with their personal watch collections.
Among the many things that intrigued us about the company is its name. Brandoff tells us that “the name Eleven James is derived from a story I heard of James Bond having a selection of 11 different watches and gadgets to choose from for each new Bond film. Bond seemed the archetype for a member and the variety of watches obviously aligned with our concept. We wanted a name that was unique, aspirational and that felt familiar.” Which James Bond the name refers to is totally up to you and your imagination (we vote for Daniel Craig!)
The learning curve as Eleven James refined its initial offerings provides some interesting insights. For example, at the beginning, every “rotation” was 2 months. That turned out to be too long for some members, and too short for others. Now members have a wider range of options (rotations of 2-4 months, and half- and full-year memberships). Most have settled on 3-month rotations – meaning that they can experience four watches a year, and change them with the seasons.
Another insight was that most Eleven James members didn’t want to be surprised by what they received when they rented. The Birchbox model of sending items selected by the company, and not the member, didn’t work well in this context – so now most members specify the exact brands and the styles that are going to work for them (although the option to be surprised still remains).
We wondered if the established luxury watch brands had pushed back on Eleven James in any way in the beginning. Horology is an elite profession, and its practitioners are generally wary of newcomers and change. Brandoff diplomatically says that it’s a conservative category, slow to embrace many elements of the digital economy. However, the leading heritage brands have warmed to the business over time because it is delivering new consumers at a time when luxury watch brands are under global growth pressure – the slow-down in Asian markets and the continued proliferation of smart watches makes this a bright spot in an otherwise challenging market environment.
Brandoff reports that one-third of Eleven James members are new to luxury watches. Their average age is 35, their income is in the low six figures, they’re college educated, and they reside in major cities in the United States (about 10% of the site’s traffic comes from outside the US). Many have grown up using their smartphones to track the time, so while they may be curious about luxury timepieces, they have no history of watch-wearing. They respect quality, craftsmanship and design, and they understand the role a watch can play in their overall style. But they’re also looking for ways to share, post and feel connected to others. They want a service that is bespoke and personalized. And they prefer to avoid long-term and large commitments, in part because they have vivid memories of the 2008 financial crisis and are skittish about getting financially over-extended. There are no worries over maintenance, insurance and resale in a sharing model, making it a great match for the psychographics of the millennials and their younger siblings.
Those insights are highly valuable for the luxury watch category and beyond. Brandoff believes that the intelligence Eleven James gains about its members far surpasses what any individual watch brand can learn about its customers, even if it has its own retail stores (many luxury watch brands have a handful of flagship locations, but most of the volume is done in third-party retail stores).
Over time, Eleven James has built an inventory of luxury watches that is unrivaled by its regional online competitors – the company says it’s one of the largest in the world, and believes this is a distinct competitive advantage. The site currently carries almost 50 brands, and stocks a mix of new, classic and vintage models. Because members ultimately determine what the company buys, inventory management is easier than at a typical retail operation. As it scales, the Eleven James database will be an excellent barometer (and over time, a predictor) of consumer demand and preferences in the category.
In recent weeks the company announced a new service line, called “Watch and Earn.” It extends the concept into Airbnb’s business model: members can loan a watch that they already own for one year and earn rental income on it. Lots of people own luxury watches that they don’t wear, and this is a simple way to monetize those assets. Smart.
So what’s next? Geographic expansion? Additional product lines, like women’s fine jewelry? “Yes, and yes,” says Brandoff with a laugh. Due to customs issues and tax laws that in many jurisdictions would treat a 3-month watch rental as a purchase, global expansion will require establishing regional operations on the ground in target markets. In the meantime, this year will be focused on enhancing the product and service experience (including a web-based member portal), building the newly-launched women’s business and reaching out to corporate clients. For large companies in a client service business – consultants, banks, law and accounting firms – one can imagine Eleven James as a popular employee benefit from which employers would also gain. Big meeting with a client? Sporting the right watch is a great way to telegraph gravitas and competence, and enhance the professional stature of the firm’s employees.
So if you’re getting married, or interviewing for a big job, or trying to woo a new client, and you need to radiate success and savior fare but your budget is radiating “trying hard” and “not-yet-there,” fret no more. If you have one treasured watch, but you’re bored and wishing for more variety in your watch wardrobe – or thinking of buying a second, third or fourth watch but would like to “try before you buy,” your day has come. Or if someone in your life fits this description, you now have the perfect gift idea.
Valentine’s Day, spring break, graduations, weddings, and many other family events will be here before you know it. Might be time to go all James Bond and show up with some serious wrist bling at your next big event.