Founder's Update No. 9: Year End Review + Outlook for 2024

Founder's Update No. 9: Year End Review + Outlook for 2024

Today, we’re excited to be sharing our ninth founder’s update where we provide a detailed overview of our recent progress in working to grow and improve Vaer.

As we settle into the new year and reflect on the past three months since our last founders update (which was published in October, and detailed the opening of our warehouse in Kansas City) there has been a long list of both major accomplishments and ongoing challenges as we closed out 2023, and transitioned into our 7th full year of business operations.

From a mile-high perspective, the overall outlook for Vaer going into 2024 is one of considerable optimism. We closed out 2023 with another year of record sales, strong growth, and major progress around our US assembly and fulfillment operations. As a reference on our progress over the years, we did more sales during the last week of November 2023, than we did in our entire first 2 years of business (2017 & 2018). While the larger sales numbers are always great to see, the main insight at this stage of the business is our efficiency and capability in winning new customers.

What used to take us years is now taking months.

While an increased marketing spend is playing a part, we have been particularly excited to see a noticeable increase in the number of customers who are finding out about our brand based on a recommendation from friends and family. According to our post-purchase survey data, organic referrals increased by 46% compared to Q4 2022. This is HUGE.

Acquiring new customers within the highly competitive $70 billion global watch industry is difficult and expensive (especially during the holiday season). Not only are we competing against the big conglomerates (Rolex, Swatch, Seiko, Citizen, Movado, Fossil, Richemont, Timex) we’re also going head to head with an ever-increasing community of upstart micro-brands.

While we do our best to communicate the inherent value and appeal of our core offering: affordable, ocean-ready, USA-assembled tool watches, no matter what we say about ourselves, that message is always going to resonate more when it comes from a trusted friend or family member.

In 2022, approximately 11% of our purchases came from referrals, in 2023 that number jumped up to 17%. Our goal for the year ahead is to get that number up past 20%. While we have a wide range of ideas on how to achieve that goal (including the possibility of a formal referral program) the core strategy mostly revolves around delivering a consistently exceptional ownership experience and delivering the type of products that lead strangers to comment: “Wow, that’s a cool looking watch.”

1. How many watches have we assembled in the USA since our last update?

One of the great things about owning a Vaer is that when people stop to ask about your watch, there’s quite a lot to talk about. While a great option for conversation is the adventures you’ve had while wearing it, another very unique aspect of many of our watches is talking about where they're put together.

If you’re new to Vaer, and this is one of your first-ever founders updates, you should know that one of our core missions as a business is to make US watch assembly work AT SCALE.

We’re proud to be the largest independent wristwatch assembler in the USA, and we’re very excited by the progress our entire team has made over the past year in continuing to scale up our American assembly operations.

In the fourth quarter of 2023, we assembled 5,837 watches in America. The breakdown by state is as follows:

California: 2,736

Arizona: 2,559

Rhode Island: 542

Additionally, we also produced over 600 handmade leather straps in the last 3 months of 2023, all of which were made in Florida. Collectively, this works out to an added investment of thousands of hours into skilled US craftsmanship and manufacturing since our last founders update in October.

2. How were we able to deliver all of these watches?

Vaer’s watch and strap production in the USA is a unique aspect of our business. However, supporting this manufacturing effort is also a very interesting logistics and supply chain system. As we detailed in our 8th founder's update, in late 2023 we made the consequential decision to bring our entire warehouse operation “in-house”, operating out of a 3,000 sq ft facility in Kansas City, Missouri.

There’s an old saying that the strongest steel is forged in the hottest fires.

That sentiment pretty much encapsulates the experience of our “best-in-the-business” warehouse manager Denise, in delivering thousands of customers over the holiday rush, only a few short weeks after moving into the new warehouse space.

That said, it would be physically impossible for one woman (even Denise) to single-handedly deliver all of our orders in November in December, and we were saved by the generous help of her extended network of friends and family (including Denise’s dad, husband, daughters, and son-in-law) who chipped in to get our watches packed and shipped to our customers in time for Christmas.

Coming out of our first holiday rush in the new warehouse, we’re especially thankful for the assistance of Denise’s friend Julie (a retired school teacher in Kansas City), who will continue helping Denise with our logistics operation on a part-time basis through 2024.

We also need to shout out to the real unsung heroes: our customer support team. Justin (Texas) and Evan-Austin (California) tackled a mountain of customer outreach over the holidays and had a huge impact on delivering an overall positive experience with our brand over the past few months.

3. What’s the latest on the Vaer product lineup?

Marketing, assembly, logistics, and support are all essential aspects of our growth, but at the end of the day, the real success of our business is going to hinge on the quality of our products.

As founders, we made a concerted decision to skip a major product release in the fall of 2023, opting instead to focus on getting all of our bestselling core models in stock. This was the right decision given the challenges around assembly resources and our warehouse transition in October, but it has left us with a busier-than-normal release calendar for the first half of 2024.

The following designs are currently slated for release in the following 2 months:

  1. D5 Pacific II Diver (sapphire bezel, bright colors)
  2. R1 Dive Case Chronograph
  3. R1 Field Case Chronograph
  4. C3/C5 Ameriquartz Dirty Dozen

    All four of these designs have been in development since the summer of last year, and most have already entered into our US assembly schedule. We’ve had the opportunity to test and wear production samples of these new designs for a while now, and we’re incredibly excited to bring them to our community, as they represent a big step forward in our design execution.

    These 4 upcoming releases cover the bases in terms of where we see opportunities for product expansion.

    The new D5 and R1 designs are aimed squarely at the enthusiast community (folks who own 2+ watches) as they implement bold and eye-catching color and material execution, and are made to stand out from the crowd (even at a meetup of watch collectors).

    The C3/C5 Dirty Dozen release is more emblematic of the core Vaer offering, which is delivering a perfect “one-watch solution” for the type of buyer that values durability specs, historically inspired design and heavy American sourcing. The Swiss Made A12 Dirty Dozen automatic has been a bestseller since its launch way back in 2019, but it’s also $900. We believe that there are many customers out there who love the iconic design and would love a version with a USA-built quartz movement for less than $300.

    4. Product Release Roadmap for 2024

    Beyond the watches listed above (which were all designed and developed last year), we also have a long list of ideas and inspirations for 2024. Conversations have already started internally at Vaer, and of course, we will continue to loop in our community to the next phase of product designs, via our annual community design survey, which we plan to launch in March of this year.

    Building on our two exclusive collaborations with Huckberry last year, and our internal custom project for Watches@ in 2022, we’re also exploring the possibility of a larger brand collaboration in 2024 (with a company that shares our commitment to innovative product design and USA manufacturing).

    5. What are we most excited about for the year ahead?

    There’s an incredible sense of satisfaction in building a great wristwatch, something that looks great but will also stand up to everyday wear. Our next step is to further communicate that value proposition and the sense that our watches, while affordable, represent an investment for life.

    We launched our Vaer pre-owned store in April 2023, and it did nearly 1,000 watch sales last year. This means that on its own, interest in Vaer Pre-Owned has outpaced what many microbrands can accomplish selling brand-new watches. It's a huge endorsement of our product's durability and perceived resale value and supports our broader mission of reducing product waste and planned obsolescence. 

    As with most of our assembly, all of our service and pre-owned repair is done in the United States, and we believe this is a major competitive advantage and selling point. Unlike big brands like Timex, MVMT, or Fossil, which mass produce their watches overseas and have no cost-effective method of repairing damaged or defective models (since shipping the watch back to China and fixing it is much more expensive than just making a new one), at Vaer we have a “survivalist” mentality when it comes to our components and do our best to repair, and upcycle every component we ever produce.

    Integrating a “buy-back/trade-in” program is on the company roadmap, as is implementing more detailed serialization on each wristwatch, allowing us to track not only state assembly origin (so Rhode Island customers could buy watches assembled in their home state) but also allowing us to track a product's ownership history over longer periods of time.

    Additionally, we want to invest in greater levels of personalization and communication both on-site (ex. live chat) and at our warehouse in Kansas City (ex. personalized notes), which is essentially just leaning into the incredible personality and talent of our team members.

    What watches are we wearing?

    Reagan: Since we released the R1 Chrono in 2022, the 38mm cream colorway has been a heavy part of my watch rotation. It’s a design that immediately turns heads and sparks interest, and just wearing it around, I’ve certainly influenced a few purchases amongst friends and family. The new reverse Panda version of the R1 is a serious threat to taking its place is my go-to Chrono. After finishing with the final product photography last week, I was able to throw it on a Khaki single pass strap and take it surfing over the weekend here in Venice. It’s a beautiful watch, but I think it’s at its best when it’s taking a beating. Paddling out in overhead swell in mid-January was a great place to start.

    Ryan: For the last year or so, our D4 Meridian Black was cemented to my wrist, but our 36mm A12 Dirty Dozen has found its way back into the rotation, and I’m absolutely loving it. The 36mm is low profile enough to easily fit under a wetsuit, and the upgraded BGW9 lume glows well into the early morning hours. Ultimately, it is a watch design that I’m really proud of, and I get excited every time I look down to check the time. 

    Last Words

    Thanks for taking the time to read this update! As usual, feel free to respond with any thoughts or feedback, to we’ll try our best to respond in a timely manner.

    All the best,

    Reagan Cook & Ryan Torres

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