Why Would Anyone Want A Second Watch?
The iconic watch company, Swatch, which single-handedly rebuilt the Swiss watch industry around a solid platform of stylish and affordable plastic (mostly) watches, is just about to buy one of the most prestigious jewellery brands in the US, Harry Winston, a brand synonymous with Hollywood chic and famously mentioned by Marilyn Munro in the song “Diamonds Are A Girl’s Best Friend” – oh, and it makes high-end watches too.
You might not know that Swatch, the world’s largest watch company, has accelerated the acquisition of Swiss luxury watch brands in recent years and now also owns: Breguet, Blancpain, Jaguet Droz, Glashütte Original, Léon Hatot, Omega, Tiffany Watch Co., Rado, Longines, Union Glashütte, Tissot, ck watch & jewellery, Cerina, Mido, Pierre Balmain, Hamilton, Flik Flak and Endura. Wow! Impressive, eh?
That Swatch should now have such a presence, in what might be considered to be the traditional luxury watch market, is pretty ironic as it came into existence as a direct response to the attack on the Swiss watch industry, by cheaper Asian imports in the 1980’s, that saw sales halved. Swatch was the reaction: Swiss-made watches at a fraction of the price of the luxury brands; so cheap in fact that they could be considered to be “second watches”.
Rather than what I had previously thought, that it came about as a contraction of “Swiss watch”, the word Swatch is in fact derived from the term “second watch”, a fun, casual and relatively disposal accessory, rather than a cherished heirloom to pass onto the next generation. (I should declare though the fondest admiration for the competition and the strap line “You never actually own a Patek Philippe. You merely look after it for the next generation.” This is, to my mind at least, quite simply, a work of branding and positioning genius.)
Not only did Swatch come up with the notion that more than one watch might be a good idea for the masses, not just the well-to-do, but some bright spark decided that crafting them from plastic, and at a lower price point than a traditional Swiss watch, still wasn’t enough, they also needed to be really different and so they became highly visible symbols of personal identity as well. I remember vividly wearing a bright yellow one to work in the 1980s and being told off by my boss for trying too hard to be different!
So, Swatch built its brand around an idea of affordable Swiss quality, personal identity and style which, as we all know, was a huge success; if you liked Swatch you were unlikely to stop at a just a second watch, you might buy half a dozen, or more.
What I like about the Swatch story is how it captures so many aspects of what I consider to be best practice in reacting to the inevitable competitive pressures in an established industry: first and foremast, it reacted, it didn’t ignore what was going on; it saw change as an opportunity and it made the most of it; it decided to be meaningfully and bravely, for the time, different, rather than just trying to compete head on with the new competition; although it was leveraging its strong watch making skills and expertise it was selling personal identity, something that its price point competitors weren’t doing nearly as well, although some tried. Fundamentally, it took a distinctive position in the market, that made the most of its core strengths, and it then it aligned both the manufacturing, and most of all its marketing, behind this strategy.
What Swatch has done is both remarkable and an inspiration to us all; it has earned its place as a leading global brand now with fingers in many market segments. There is much to learn from the Swatch story but, in particular, remember how it decided to be really different, when times get tough and you are looking for a little inspiration for your own business.
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