Wristful Thinking, Episode 4: Coronavirus's latest victim--Baselworld

Coronavirus's latest victim--Baselworld

Listen to Episode 4 of our podcast, Wristful Thinking, now:

Chaz: Welcome to Wristful Thinking, LIV Watches' podcast all about things LIV Watches--fans, collectors, and watch freaks. My name is Chaz. I'm the co-founder of LIV Watches and a bona fide watch freak. For those of you that are new to this podcast, LIV is a direct-to-consumer microbrand with a focus on handcrafted Swiss watches, which we ship to fans all over the world. Feel free to visit us at LIVwatches.com for more information on the brand, the culture and the beautiful products we make.

In today's episode, we will be talking with the LIV Team Roundtable, and the subject is Coronavirus and how it's affecting the Swiss watch industry. So join us while we discuss this serious topic and I think it will be interesting. So looking forward.

Esti: Hi, everybody. We're sitting here at the Wristful Thinking podcast, Team LIV. We have Louie.

Louie: Hi, everybody. My name is Louie. I'm the design and social media coordinator here at LIV, amongst other things, amongst many other things.

Esti: You have a lot of hats.

Louie: Like everybody in this roundtable. Yeah. Yeah.

Chaz: My name is Chaz. I'm the co-founder. And happy to be here.

Michael: Hey, guys. Michael here. You don't know me much. I'm the guy behind the scenes who does all the marketing. Happy to be on the team. Been with them for years now.

Esti: And I'm Esti, co-founder with Chaz. Chaz's in charge of the product development. He didn't mention that as the co-founder. A very important role. And I just call myself the chief implementation officer. All right. Let's get started.

Michael: Fancy labels.

Esti: Yes, very fancy. OK. So we want to talk about Baselworld. It was canceled. What's going on? Chaz?

Chaz: Well, I think I want to talk about everything that's going on happening. So obviously, you guys know what's going on with this Coronavirus thing.

Esti: Terrible

Chaz: Yeah, it's absolutely horrible. And the crazy thing about is that nobody seems to know like a solution. I think the solution is--no one knows, like--

Esti: The uncertainty.

Chaz: Yeah, I think it's the uncertainty that's really getting people really, really weirded out and scared. And I think it's it's having, it's having an effect on a lot of people. I think in our industry alone, like we just know that Baselworld just got canceled. I've been a big proponent of closing Baselworld. But I was never--I never thought---that.

Esti: It's terrible for all those brands.

Chaz: Yeah, not under these circumstances.

Esti: I think especially the smaller guys that invest a lot of money.

Chaz: Oh, there's people that are gonna lose a lot of money off this.

Michael: This is a big deal.

Esti: Yeah.

Chaz: So not just a fair, but I think I'm not worried about the Rolexes and the Pateks of the world. But I am concerned about the smaller brands that are in our range that, you know, Swiss Swiss brands that are, let's say, in our price range or style. I don't know. Boutique small brands.

Esti: We don't have any competition.

Chaz: Well, there is a lot of nice cool brands out there. And I think it's really important for the industry, for us to exist. And so it's important that we make sure that these brands are healthy. It's important that the watch lovers out there in the world know that there's alternatives.

Esti: Yeah.

Chaz: Then and I don't think we're the only alternative out there. I think it's important that there's lots, lots of alternatives. And, you know, it creates a whole separate ecosystem within the watch industry where people are looking for smaller, more boutique brands that provide not just something unique, not just a unique watch, but they offer a, you know, a unique experience. And I think that's what the new watch lovers want. They want an experience.

Esti: They want a destination. It's like there's a set. There's now a whole marketplace.

Chaz: Yeah.

Esti: Brands. Which is better for everybody.

Chaz: Yeah, absolutely. I think it's important for if one person existing and in one in one niche I think it's a problem. I think I think what makes it what makes the niche interesting is if there's choices.

Michael: And variety.

Chaz: Yeah.

Esti: Yeah, I remember there was a restaurant down in South Beach.

Chaz: South Beach, Miami.

Esti: And it was in an area they weren't really any other restaurants. And so there were only two restaurants in that area.

Chaz: Nobody went.

Esti: [laughs] Wait. Wait. There were only two restaurants in that area. So one of the two restaurants closed. So I said to the owner of the restaurant that was still open. And I said, oh, that's great for you. Now you're going to get all this business. He said, no, it's not good for me because we were a destination. People knew, "Oh, let me go to that area. I could go to either restaurant." And now no one's going to come. There's only one restaurant.

Chaz: Right.

Esti: So it's the same type of thing.

That's what the new watch lovers want. They want an experience.

Chaz: Which leads me to another thing that I just read, actually, is that this Coronavirus is causing a problem. Let's say within the restaurant business, because people don't feel like they want to go out and be in public and they want to go to restaurants. So it's having an effect across the board. Interestingly enough, I actually read another article, an economist that brought up--

Esti: You're so well-read. [laughs]

Michael: Where do you have the time? [laughs]

Esti: He reads the headlines.

Chaz: I get as far as the subtitles.

Esti: He reads all the callouts.

Chaz: Yeah, I look for the bold text.

Esti: And then he sends it to me and is like, can you read the whole article for me?

Michael: He's like, "Tell me what you guys think."

Chaz: Could you just lay it out for me, like in a three-word sentence [laughs]. Yeah. So what's happening now, according to some of the economists out there, they're saying that people don't they don't want to go out to restaurants and they're not. They're canceling their trips. There's a lot of stuff's been canceled, like a lot of big things.

Esti: Yeah, we have to cancel our upcoming trip.

Chaz: Yes, there's a lot of trips that are being canceled and then people are sitting at home right now. And for those, you know, those people that still have, you know, different--I would say--affinities to certain things? They still want those things. So they can't do travel. You know, the watch guy's going to want to watch. So maybe he's going to be looking online or watches. They'll spend more time at home looking for watches and maybe find a brand like us, LIV.

Esti: It's interesting you mentioned travel because I know on a lot of cruise ships, they do sell watches as well. So there's there some sort of, I don't know what it is with cruise ships and watches, there's some sort of connection between those.

Chaz: I think travel. I think travel in general. I think someone who travels I think there's a strong affinity between the travel industry and watches. There's some cross like people that like our watches. Maybe they like motorcycles. They like classic cars or they like pens.

Esti: Or there's something specifically about the cruise ships, which is interesting.

Chaz: And I think I think retail and cruise ships in general is very strong.

Michael: Duty free.

Chaz: Yeah, because it is because it's duty free. And then you get locked up for like five days in a boat. What are you going to do?

Esti: You go psycho.

Michael: Because if you just want to commemorate the trip.

Esti: It's like, I bought this watch on that trip. But there's no LIV watches on a cruise ship.

Chaz: No, we haven't done cruise ships. But that brings an interesting point, is those people who are cruise ships buying right now are at home buying. They still need to do something.

Esti: So I was listening today to Today Explained and they had a they were interviewing one of these coronavirus cases from that, what was that, Japanese ship.

Chaz: Princess something.

Esti: Yeah. That he was one of the people on that cruise ship. And he was brought to a U.S. Army base in the middle of Nebraska. I'm not sure. Somewhere random in the U.S. And he was he was talking about his experience. They were, for days, on this cruise ship. Awful.

Chaz: Yeah. So bottom line is, I don't think people are traveling or doing anything. They're just staying home. Yeah, I think that's what there is. But, you know, in the office itself, like we've set some guidelines to make sure that everybody is safe.

Esti: No one is allowed to cough on me.

Chaz: No coughing. We put Purell hand sanitizers in the office. Everybody's got to wash their hands when they come in. You know, we're in a town with three million people. And there's I think there's been like five or six cases. I'm not sure.

Esti: Not in this town. In the whole of Florida. I mean, we could Google it.

Chaz: There might be some more like now we went. Yeah. Maybe somewhere.

Esti: But the case is in Tampa.

Chaz: But, you know, it's interesting because they all talk about how the Coronavirus is going to. Is going to. Is going to go away in the warm weather when people get out of their houses.

Esti: Oh really, is that what they're saying?

Chaz: Yeah. I say that, you know, if you don't, the why is the flu only? Is it because the cold weather or it's because people just bundle up in their house and they don't actually get any fresh air?

Esti: I'm not sure about that. The flu hit south Florida terribly. And everyone down here is out and about.

Chaz: I know, but it does get a little colder here and it's people. People travel places and they come back and they bring it. I don't know. I'm not a scientist. I'm not a Coronavirus specialist. But I will tell you that that here in Florida, we've been very lucky and we've had very, very few cases. I don't think anybody has died here. I think most of it's been like in Washington state.

Esti: Well, there people are really always cooped up. Doesn't it always rain up there?

Chaz: Yeah, I think also some cruise ships that come in there.

Esti: By the way, when you actually live there, like I have a friend who lives there. I was talking to her yesterday. She lives in Seattle. When you're there and you're like 10 cases in the whole state? It's not as scary as when you hear about it. Living in Miami, you know what I'm saying?

Chaz: Yeah, I think again, I think bringing back the point that I feel that it's really the unknown that's really scaring people.

Esti: Spooky.

Chaz: Yeah. And nobody wants to be responsible for causing something. That's why Basel canceled because, you know, they don't want to be the ones responsible. If something does happen or someone travels on a plane and something happens while they're traveling on the plane, you know, they could theoretically be the cause, you know, not directly, but indirectly, the cause of spreading something that we obviously need to get rid of super-fast.

Esti: Hopefully they'll have a vaccine soon.

Chaz: So. So that's really it.

Esti: Yeah, there was this article from January, just talking about how Coronavirus was impacting the Chinese economy back then, but it was saying how SARS, which was 17 years ago, I think, that it had a really bad effect on the economy because direct-to-consumer was not so big back then. So the direct-to-consumer is actually going to be a saving grace in an economic low.

Chaz: Oh, I see what you're saying.

Esti: For this virus.

Michael: That's because the economy is different now than it was. Yeah. Yeah. There's a way to get things even if you're stuck at home.

Esti: Exactly.

Chaz: I mean, our numbers have been phenomenal. So, I mean, I mean, I'm not saying it's because of coronavirus.

Esti: No, it should go away as soon as possible.

Chaz: I know. Definitely. But I'm saying like I don't know because we're direct-to-consumer and I think a lot of brands, you know, brands that have lots of retail shops, they're probably hurting. Anybody has a retail shop because retail is definitely gonna hurt like--I'm talking like brick and mortar retail, even if you're an online brand and you have brick and mortar. I think shops are not, nothing's happening in the shops.

Esti: So showrooms like Casper,.

Chaz: Whatever, they're probably relying on their online business.

Esti: That's how they're structured, they're structured as showrooms, not as point-of-sales so much

Chaz: The great thing about the online, the direct-to-consumer, the online is that when someone buys something online, you don't think of the coronavirus like you don't think of it in those terms. You you're just buying something online.

Esti: Especially if you're not buying a Chinese product. You know?

Chaz: Right.

Esti: You start thinking about it twice if you're ordering from there. There are a lot of websites you can go on.

Chaz: You're saying like Alibaba, people buying crap on Alibaba?

Esti: Even though I don't know if the virus can be transmitted in that way...

Chaz: Louie, you were just mentioning that.

Louie: They said it can stay alive on surfaces from like nine to 14 days depending.

Esti: Oh, really? It is? Well, there you go. People are afraid to order from China. Like especially there's a lot of clothing. You know, there's a lot of these.

Chaz: I guess it's good we're a Swiss brand.

Esti: Yeah. Yeah. We don't have to worry about--how many days?

Louie: 9 to 14.

Esti: So even if you know, even if people are using Chinese components or whatever, nine to 14 days, a turnaround wouldn't make a difference in the largest city.

Chaz: I think I think the people if someone is buying something directly from China?

Esti: They're being very careful.

Chaz: I think they're worried that you don't really know what's going on there yet. And I think it's again, it's the same.

Esti: And we can't trust the numbers.

Chaz: There's something like six billion people in the world. I mean, there's a hundred thousand people that have the coronavirus, I think. And I like like, you know, ninety thousand. I don't know about the numbers. I don't know the numbers exactly. But I know that like ninety-five percent of the people have coronavirus aren't China. They're not anywhere else in the world.

Esti: Yes. China is claiming--

Chaz: That's the thing, they're claiming--we don't really know.

Esti: You know that my brother in law is a doctor and he had trained in China. I forgot whether it was in Shanghai or Beijing. He's talking to his, like, the person who trained him. His training doctor. He's like, oh, there's no virus in this city. He said that to him.

Chaz: What's going on there? Yeah.

Esti: He's like, yeah, right, whatever. Like, it's like that. Also, maybe their phones are being bugged.

Chaz: Right.

Esti: They could end up in jail.

Louie: There are people disappearing.

Chaz: I was listening to a podcast and they were just talking about like just general news, like what's going on in the world. And they brought up the coronavirus because everybody's talking about it. And we're here talking about it, too, because it's really impacting everybody. And he mentioned something really interesting, said now is like the time to take care of yourself. So, for example, you know, go out, get some fresh air, go for a walk, eat healthy, sleep well, get enough sleep, build up your immune system like you should. There's people that wash your hands, wash your hands. Don't shake hands. Don't put your hands on your face. Those are great. But, you know, I think now is the time now. He's like, I don't know if scientifically if it's gonna help, but I don't see how it can hurt if you take a 30 minute walk every morning and get fresh air.

Esti: I should tell this to myself

Chaz: I think everybody needs this. But, you know, no gym, because obviously the gym is full of germs.

Esti: Just run. Go running.

Chaz: Yeah. Just do outdoor stuff like walk. Make sure again you get good sleep. Take your vitamins. Keep yourself clean. Just building up, general health. Not like doing activities that would lower your immune system, to keep a high immune.

Louie: Self-care.

Esti: Basic. All right. That's a good takeaway. Thank you for that. Chaz.

Chaz: I'm just repeating something.

Esti: Any other takeaways?

Louie: We got thinking of the idea of being cooped up. If you were quarantined.

Chaz: I don't mean myself like I mean, I know I'm visiting a lot of watch blog posts. I'm doing a lot of I'm doing a lot of like stuff I never have time to, like look at other brands or look at like what's going on in the industry.

Esti: You're saying you're avoiding the crowds here in Miami?

Chaz: Yeah, definitely, I mean, we're staying home. We're not going out that much.

Louie: I used to take the train and I'm taking the car every day just to make sure I'm by myself.

Chaz: Smart.

Michael: I don't blame him.

Esti: The train passes Fort Lauderdale.

Louie: Well, the Miami airport, people are getting on and off.

Esti: Yeah. I don't trust that.

Chaz: This is not like panic mode.

Michael: It's safety.

Esti: Awareness.

Chaz: And probably half of it? Not half of it, but a lot of it has to do with like making yourself feel better, feel better, like doing the small things that make yourself feel better. I don't know if it's actually making--.

Esti: And causing you to panic.

Chaz: Yeah, yeah, exactly. Like you do this one thing, like you use Purell or you wash your hands and you do something like you don't shake hands. It's like, okay, I'm safe now.

Esti: But I think a lot of neurotic people are really enjoying this because it feeds into--I was somewhere on Sunday and I saw some people who could be defined as neurotic, and suddenly I started panicking. I'm like, why am I letting that anyways? You know, if you're generally healthy, you should be okay.

Louie: Yeah. Stay healthy, keep yourself clean. Yeah.

Esti: Anyway.

Chaz: There's no need to panic.

Esti: We pray that, you know, it goes away, you know, that there's a cure or an immunization or a vaccine. And people should heal if they're sick. And so, you know, and thinking of all the people, there have been a lot of people who lost their lives, which is terrible.

Chaz: Yeah, absolutely.

Esti: Within when you're looking at in a cold fashion, in the larger scheme of things, more people have lost their lives from the flu season than then from the coronavirus.

Louie: Cigarettes.

Esti: And cigarettes.

Michael: Exactly.

Chaz: Or e-cigarettes. I don't know what's going on with that.

Michael: That's self-inflicted.

Esti: But I say everyone out there, stay safe. We're thinking of you.

Chaz: Absolutely. Michael, was going to ask you, do you feel like from the marketing perspective, do you feel like there's things that are changing right now within what's going on with Corona? Do you feel like there's--is it cheaper now to advertise?

Michael: Well, we're adding more devices.

Chaz: You say that maybe advertising costs went up because now we have to reach more people that are sitting home with their devices.

Esti: No, if there's more people then advertising costs go up.

Chaz: No, I'm saying is all I'm saying is that if everything's moving online--

Esti: I don't know, I'm not an economist.

Chaz: My point is that if you have everything's like we're discussing here and we just read, you know, articles written about the fact that people are home shopping versus like going out to restaurants or signing up for gyms or going on vacations or going on cruises, etc. If they're there now home and they're scrolling, they're on Facebook and Instagram or wherever, they're on any social platform that could drive the cost up. Because now you have all these advertisers like us who are now trying to reach those people.

Esti: And has it made a difference, Mike?

Michael: Not really. The only thing I've really noticed is that, you know, we're not immune to the economies of the world. So because of the Coronavirus, the US economy did dip in terms of the market. So because of that, I have been seeing more international volume.

Esti: Really?

Michael: As opposed to.

Esti: After the US, what's the next country?

Michael: I think UK.

Esti: The UK's contained it.

Chaz: But I think also has to do with those like currency exchange also. So for example, the Australian market, which is a very big market for us, their currency is really, really bad right now. So they say that's because they're relying on China for most of their economy and because they rely on China.

Esti: Yeah, my sister's in Australia. They said that the shelves, they send me photos. It literally looks like pre-hurricane.

Chaz: But we're still selling to Australia. And I think the GST level, I think is up to a thousand Australian dollars, like the tax-free. So that's really good so that people can buy. We have free shipping to Australia. So, yeah, you have to look at those numbers, it definitely has impact.

Esti: Yeah. For sure. It's impacted things. And I did notice a lot of UK sales coming in, by the way.

Chaz: I did see a lot of Hong Kong sales. Shipping.

Esti: Yes. I did see that also.

Chaz: So it's interesting because I noticed that those orders--.

Esti: They're still under heavy--things are closed there.

Chaz: First of all, Hong Kong in general has a strong affinity like Singapore has a strong as a population. They love watches. They absolutely love watches. I think if they did like a per capita analysis?

Esti: Of ownership of watches, yeah.

Chaz: Yeah, like, you know, I think I think it's probably I don't know why Singapore and Hong Kong such small places, but they have really, really strong affinity to watches. And I guess they're probably, they can't go to restaurants, they're sitting there.

Esti: They're probably very educated.

Michael: They have strong economies.

Esti: They're still small. They're small in numbers. And people are generally, on average, educated...

Louie: More wealthy as well.

Esti: More wealthy, more disposable income

Chaz: That's an interesting point that Michael brings up, that now, you know, the US is always going to be our number one market. But again, like I think a lot of things are going to affect, you know, whether their currencies are in line or whether, you know, a place like Hong Kong where they're sitting home right now and again, got nothing to do.

Louie: People are gonna have to start sitting home if things keep changing. And the fact that it is canceled Ultrafest, I mean, who knows what else is going to come up?

Esti: I mean, if you think about it, we're very lucky, because so many people are, you know, part of the gig economy--there's a lot of complaints about it. But at the same time, it's a saving grace. A hundred percent.

Chaz: Imagine I imagine we wouldn't have these direct to consumer brands, all these directed to rents. And how would people get what they need? I mean, this is literally like the worst thing that could happen.

Esti: The distribution channels are all in place for, God forbid, something like this.

Chaz: Exactly.

Louie: You can't leave.

Chaz: You can order things online. I mean, everything.

Esti: Medication. We're able to get medication delivered. I think if it's not liquid, the local CVS will deliver non-liquid medication.

Chaz: I mean, I wouldn't want to be caught dead in a CVS.

Michael: I've never heard of that.

Esti: Yeah, I get it.

Chaz: Who wants to go to CVS? Not me.

Michael: I dread it.

Chaz: CVS is a pharmacy, for anyone who doesn't know.

Michael: It feels like sickness in there

Chaz: That's the last place you want to be is like a pharmacy.

Esti: I tell my kids, don't look anywhere Just walk straight. If we have to ever go there with kids. Another takeaway for anyone with kids. I need to start implementing this. But I really want to just throw those kids in the shower as soon as they get home from school.

Chaz: Right.

Esti: They should be, like, Cloroxed down.

Chaz: Esti's in a HASMAT outfit as they come, like, hey guys, in the shower. Don't touch the walls. Just get into the shower.

Esti: “I love you. Just get in. Tell me about your day in like five minutes.”

Chaz: I know we're talking about Corona, but there's a lot of other things that are going on here at LIV and a couple of things that I want to mention.

Esti: That was a very smooth segway.

Chaz: I know, I know, I know [laughs]. But anyway, I just don't want this to be only about Corona. Wanna talk a little bit about what's going on?

Esti: We want to be positive. Yeah.

Chaz: So here at LIV, we're obviously quite busy. Things are going quite well. The brand is getting stronger every day. A lot of it is thanks to you guys, the fans, that not just put your hard-earned money towards buying one of our products, but also like engaging. You're giving us real estate on your wrist. And for that, we're forever grateful and we hope you guys are safe and some things that are going on right now. Like, for example, we have the T.J. that just launched. I think that's almost sold out. Definitely the Divers is running really low, really low, really low. So that's been a big hit. So, you know, if you haven't grabbed one of those...

Esti: The TJ Divers.