When the Swatch was born, the Swiss watch industry was struggling to compete with cheap models from Asia. Swatch sales soared to 20 million a year by the early 1990s as consumers snapped up colorful designs that married Swiss precision with an affordable fun factor. That boost provided financial cover for the slow-motion comeback of struggling high-end manufacturers, helping to build the Swatch Group into a powerhouse that today includes 17 brands and annual sales of around $7.5 billion.
The Apple Watch is now the top-selling timepiece of any sort, as well as the Swatch brand itself, which has fallen out of favor with the younger generation. The Swatch brand's unit sales were expected to fall to about 3 million by the year 2021. Nick Hayek is the CEO of Swatch Group AG.
The Omega-Swatch MoonSwatch is the budget version of the Swatch stable's high-end offerings. Hayek and his team came up with a plan to create a model based on the Swatch Group. Swatch would leverage its expertise in manufacturing and design for a price that remained true to the brand ethos.
The heritage and look of the Omega Speedmaster Moonwatch was used in the creation of the MoonSwatch. The steel, hand-wound, mechanical Moonwatch retails for about $7,000, but the MoonSwatch, housed in multicolored ceramic and bioplastic cases, costs only $260
In March, when the MoonSwatch was only available at Swatch boutiques, buyers from all over the world came to buy it. Stores sold out within minutes of receiving the supplies. Hayek claims he could sell 10 million watches. Swatch was put back into the spotlight. "Everyone is interested."
The Swiss watch business was affected by the Covid-19 epidemic. Cash-flush consumers, who were stuck at home during lockdowns, browsed new posts of Omega Speedmasters on social media. The prices for some steel sportswatch models have more than doubled on the secondary market, and it is almost impossible to buy a watch at the official retail price.
The Omega collaboration has made the Swatch brand part of the luxury conversation again, even with prices that are a fraction of high-end watches. He says that customers who stop by looking for the elusive MoonSwatch often check out other models. The company says that Swatch brand sales in Switzerland have increased by 41% since the release.
Some MoonSwatch owners are selling them for double the retail price on the internet. Hayek advises against buying from flippers as the MoonSwatch isn't limited and production is being increased to meet demand.
Omega, a brand Swatch helped prop up in the 1980s, is the power behind Swatch's revival. James Bond chose Omega as his timepiece of choice due to a lucrative marketing deal. Omega now accounts for more than a third of Swatch Group sales and more than half of its profits according to estimates by Morgan Stanley. It was possible to make a timepiece in Switzerland that had a trendy design and disruptive marketing while selling it at an extremely competitive price. The history is repeating itself 40 years later.
Hayek considered many models for the Swatch collaboration. He commissioned Swatch bioceramic versions of the Seamaster as well as the Blancpain Fifty Fathoms, which retails for about $13,000. Hayek won't reveal a mock-up of a Swatch collaboration with a "very high-end" outside brand. Is it a famous jewelry brand? Is it an Audemars piguet? Is that a timepiece? He won't say anything. He suggests that a Swatch collaboration could be the perfect way to introduce a new generation to one of Switzerland's most sought-after but expensive and hard to get brands. He says that the message can't be the brand's exclusiveness. That's not what I'm saying.
Have we reached peak watch?
All Rights Reserved © 2024
