Not content with becoming one of the watch world’s biggest YouTube influencers, Teddy Baldassare first attempted to diversify into retail by acquiring the ecommerce technology of Troverie.com (renamed Teddybaldassarre.com) and launching his own multibrand e-store under the name of Teddy. Earlier this year he opened his first brick and mortar store in his home city of Cleveland. WatchPro’s Rob Corder caught up with the dynamic entrepreneur to find out why and what’s next.
WATCHPRO: Let’s get right into it: why did you feel the need or desire to open a physical showroom in Cleveland?
TEDDY BALDASSARRE: A variety of reasons. What was becoming very clear to me is that, while digital is a significant part of what we do, many people want to buy watches in different ways.
Retail is an industry that is centuries old and very much about tradition. People who buy watches are also interested in that history and tradition. We are in the watch industry, retail is not going away, so we thought we have to figure this out.
As for Cleveland, it is where I am from and a place that I know. If I am going to take the plunge in a whole new vertical for us, then this is the place I want to go. There is a familiarity for the brands when you go this route, so they are more comfortable working with us. That was a significant consideration.
In addition, we are evolving our omnichannel approach. I want a place where I can make my digital interactions personal. I was in the store on Saturday and it was buzzing. It was really exciting for me to shake the hands of everybody there. The store helps us to grow and to elevate what we do.
Our business model does not fundamentally change. We have been an authorised dealer since 2020. It is just that, now we have this physical store, it has shifted perceptions within the industry and with our audience.
WATCHPRO: You can become an authorised dealer with some brands as a pure online player, but many demand you have a physical store, or they will not work with you. I am not talking about the likes of Rolex and Patek Philippe, which do not allow any online sales, but brands such as Omega and Cartier want to work with traditional brick and mortar retailers because they want customers to get a rounded experience. Do you feel you needed to go this route to get the right brands?
TEDDY BALDASSARRE: I would not say our hand was forced, but it is a consideration. Brands like to feel comfortable as they both look to the future and preserve the past. But there was a part of the decision that was just about opening in a shopping centre that I grew up around.
Our secret sauce could be succeeding in some market that brands do not want to touch. You see many brands opening monobrand boutiques, and they would not open that sort of store in a mid-western city like Cleveland. But we can.
Teddy Baldassarre
WATCHPRO: How often do you expect to be in the store? Do you get a lot of fans turning up there expecting to see Teddy?
TEDDY BALDASSARRE: I will probably only go once or twice per month. I want to make it regularly so that people know when they can find me there. I don’t have a schedule that allows me to be there everyday, but I do recognise it is important. On Saturday, when I was there, we had 175 walk-ins, and that is without me promoting it in any way beyond an announcement video.
People came from out of state. I spoke to six people who had driven 250 miles to be there. It is very cool. I can’t be there all the time, but it is clearly becoming a destination that people want to make an event of when they come.
WATCHPRO: One of the things about retail is that, aside from a handful of brands that will always draw a crowd, you need something that creates a sense of occasion and excitement. Even if you only make it into the store twice per month, that represents successful events every two weeks for new customers. Most retailers would give their right hand for that.
TEDDY BALDASSARRE: You also need to keep it special. If you make yourself too available, it loses some of its impact. Whether I am doing video or retail, my aim is to make everybody feel special.
WATCHPRO: You said that opening a store has not really changed your business model. I suspect it is going to over time because ecommerce is a small and slow-growing part of the luxury watch market, but getting the right brands in a physical store in the right location means you are swimming in the fast-flowing water. Looking at data, ecommerce took off during the early months of the pandemic, but almost immediately fell back to 2019 levels and, if anything, is still struggling. Does that description fit with your experience?
TEDDY BALDASSARRE: No. We went live in June 2020, which was pretty scary, but turned out to be the best time for ecommerce. In our first year we had growth percentages in the many hundreds. As time has gone on, that growth is more in the 50 to 100% range.
We haven’t seen a dip. That might be because we are still gaining traction so there is headroom to grow. Also, if you look at where the hype has been in the market, it has been for brands we do not work with, so we do not take the same hit when the hype subsides.
Our model is to build a community of people who are really into their watches. They do not care about investment and appreciation of prices as much, which is something we saw post-pandemic, so that may have built a bit of a moat around us as well.
WATCHPRO: How did you settle on the portfolio of brands you have in your Cleveland store?
TEDDY BALDASSARRE: I wanted a line-up that is representative of myself, and brands that I can get behind. I like them all and collect them all. Secondly, we took a view on where the interest of the public lies from what we have seen through our media business. Thirdly, we had to look at which brands already had strong distribution in our area.
Even with a brand like Omega, you will only find that in a few stores in the entire state. I have Cleveland, Pittsburgh, Detroit, all within a few hours. Put it all together and we have around 30 million people within a driveable distance.
Grand Seiko is another example. There is only one other door in Ohio, and that is a long way away. I also like that we have Swiss brands, plus a Japanese brand in Grand Seiko and a German brand with Glashütte Original.
WATCHPRO: Are you doing any pre-owned watches?
TEDDY BALDASSARRE: No. Pre-owned is a whole different animal. The person running our store joined us from WatchBox, and so we have spoken about pre-owned many times, but it is a very different business model that I don’t see as great for us, at least in the short term.
WATCHPRO: Looking at your YouTube videos, you come across as one of the most respectable faces in a space where shouting the loudest and being the most controversial is the usual route to growing an audience. Feel free to correct me, but positioning yourself in a way that is trusted by both your audience and the watch brands seems like a pretty good place to be.
TEDDY BALDASSARRE: I am not sure if I positioned myself there or found myself there. If you look at my earliest videos I have no idea what I am doing and how to present myself.
I was a deer in the headlights just sharing my thoughts about my passion for watches. However, I have always wanted to present myself in a polished way. I have always liked video production. This is who I am.
I like to have fun, and there is an entertainment element, but my angle has always been to use YouTube to learn and absorb as much information as possible. I turn this around and try to answer the sort of questions that other watch lovers will have.
WATCHPRO: Aside from those very early attempts, once you got a little bit of success on YouTube, did you think you could sustain it and still be doing it many years later?
TEDDY BALDASSARRE: I had no masterplan. I have always loved content and used to come home from school in the mid-2000s and jump straight into watching YouTube videos. I love watches and I love content.
I jumped on this ride and have stayed on it. There is no magic ingredient. I work hard and got a bit lucky with my timing getting into creating videos in 2017 when there was a lot less competition compared to the saturated market we see today.
WATCHPRO: It is rare to find people and businesses that are great at two things simultaneously. You are provably great at creating engaging videos on YouTube that have found an audience of watch enthusiasts. Being great at retail on top of that is going to be a very different challenge. It will be interesting to see whether you end up having to specialise again and make a choice between retail and media?
TEDDY BALDASSARRE: We make money through selling watches. It represents around 98% of our turnover. The reason we make such a small percentage of our revenue from media is that we do not do advertorials as part of our videos. We are not paid by the brands in that way. We really only make money if we sell watches from the 30 brands we represent as an authorised dealer.
The way I see it is that we lose a ton of money producing content. I would assume I spend more money on free watch-related content than anybody else on the planet. Who in their right mind would create three videos per week, costing well into seven figures per year without advertising?
The way I look at it is, rather than doing what the brands want, I do what the audience wants. If we do that, you get a better outcome. If you only do what the brands want to see, the viewers see through that.
WATCHPRO: Have you had much heat over the years from viewers who may understand that you have to be paid in some way, but do not like to think they are being sold to when they are looking for impartial advice or entertainment?
TEDDY BALDASSARRE: It happens, but we are clear and transparent about where our interests lie, and that is the best we can do. There are always compromises in the relationships between media and brands. They want to persuade guys like us to say nice things about them by advertising, by sending gifts, by paying for trips.
WATCHPRO: What can you share with me about the size of your company now? How big is your team? How many are on the media side and how many in retail?
TEDDY BALDASSARRE: We split about 50/50 between the content and retail teams, which adds up to around 25 people full time.
WATCHPRO: I know it is early days, but has anything surprised you since you opened the store? What have you learned?
TEDDY BALDASSARRE: One thing that I did not expect was the level of foot traffic. I try to be high touch in every area of the business. We have live chats on our website and a client advisory team that reaches out to customers to give them personal service. We want to be a brand where you are connecting with people rather than an online entity.
One of the challenges was something I saw when I went into the store on Saturday and, at one point, we had 40 customers and only three sales staff. There were so many people coming in that our staff were struggling to give all of them the level of service that I would like. We have to figure out how to give people the experience they came for and nobody feels they are being forgotten.
WATCHPRO: Do you hope to have more than one store in time?
TEDDY BALDASSARRE: It is possible, for sure. Retail is not going away. The great thing about what we do is that we can meet people all across the world. Coming from a city like Cleveland, which is not a Tier One location, but even from around here, and I can see this from the analytics of the YouTube channel, we have engaged with 160,000 people from Ohio in just the past year.
That is huge when you compare it to a new retailer that has to worry about getting anybody to know about them through expensive advertising, PR, etc. If we were to look at going into a new market, we would not be going in as a complete stranger. That makes it possible for us to open in more locations.
Our secret sauce could be succeeding in some market that brands do not want to touch. You see many brands opening monobrand boutiques, and they would not open that sort of store in a mid-western city like Cleveland. But we can.
I have no interest in New York. It is not a city I know very well. It is saturated, all the brands are represented and it is far more expensive than here. I would rather learn my trade here and then look to apply those lessons elsewhere.
WATCHPRO: Most retailers are trimming their brand portfolios, which makes it difficult for mid-tier brands to get any physical presence in most cities. You could provide a home to these brands and make them viable in smaller cities because of your YouTube audience.
TEDDY BALDASSARRE: Sure, and that is something we have thought about with the Cleveland store. In addition to the four brands we represent in that store, we have an area where we can introduce some smaller watchmakers that you see online with us and we speak about in our videos. For example, we might bring in a Muhle Glashütte and people will think it is cool.
WATCHPRO: Have you grown this business using your own money and reinvesting profits or have you done any fund raising down the years?
TEDDY BALDASSARRE: We have no outside investors and have been a profitable business from the first month we went into ecommerce. We began with baby steps and invested whatever profits we made in the next step and the next step. I do have a business partner who has been a long term friend and comes from a video production background.
WATCHPRO: I have a great deal of respect for that. I have seen too many businesses who become experts at losing other people’s money and spend their entire lives in fundraising mode rather than building their companies to be self-sufficient.
TEDDY BALDASSARRE: I hate that as well. I just put my head down and work hard, and that has brought us to this place. I prefer autonomy and being in control.
