Hello.
I came across a very interesting interview with the head of the Swatch Group, Nick Hayek, in which he describes the successful sales of the new Swatch model – MoonSwatch. For the Swatch line, this is an expensive model, its retail price is $ 250 in America and approximately comparable amounts in other countries. Let me remind you that most of the sales are for models costing regarding $50, although the average price has been steadily growing in recent years.
The Swatch Group includes several watch brands, including Omega, watches of this brand cost significantly more than those of Swatch, the difference is at least an order of magnitude, or even two. One of the iconic models is the Speedmaster Moonwatch Professional, the first watch to walk on the moon. The cost of such watches is regarding 7,000 dollars. And they are well, confidently sold for several decades, interest in them either rises or falls, but average sales remain unchanged.
There are a lot of changes within the Swatch Group, and one of them is the Swatch collaboration with Omega, when inexpensive watches received design elements from a luxury model. And note that the name of a stronger brand, Omega x Swatch, comes first. A collection of watches associated with different planets was created, this is not only the Moon. See what they look like.
On the back of the watch you can see the motto of a particular space mission, look at one of the examples.
I love that in such relatively inexpensive watches, we see the use of design elements from an expensive collection, which creates a huge demand. MoonSwatch buyers still buy not so much Swatch as Omega in such an inexpensive version. For little money, people get an expensive brand that they want to see on their hand.
In an interview, Nick Hayek says that the experience is very successful and MoonSwatch sales pushed Omega sales up, they grew by a double-digit percentage, but no specifics are given. Luexconsult’s independent MoonSwatch sales estimate claims that more than 150,000 of these watches have been sold since March 2022. And this is an excellent indicator, without any discounts, success for the collection. But here the question arises: is it true that it is MoonSwatch sales that increase Omega sales? I think that the relationship here is far from direct, but it can still be traced.
Different price categories, different consumers, target groups practically do not intersect – buying a watch for $7,000 and $250 differs greatly in people’s motivation. Yes, and around we see an almost total transition to smart watches, which are winning a place under the sun. The actions of the Swatch Group are precisely aimed at protecting their watches and preventing smart watches from eating their share even more. Hence the collaborations.
MoonSwatch models cannot have a direct impact on Omega sales, there is no doubt regarding that. But due to budgets, the fact that Omega watches are illuminated, there is a demand for this model as well. I think that this is an indirect influence, not a direct one.
Trademarks and their perception remain the main asset of the watch industry. Smartwatches have millions of dials for every taste, many are confusingly similar to the same Omega, but there is no company name there. Moreover, the Swatch Group is actively monitoring the emergence of such digital watch faces and demanding their removal.
Watches today are an accessory, and there is nothing in them except for the perception of the brand, hence the depreciation of an expensive brand, its support by mass models, the market has changed and requires new solutions. I won’t be surprised that Omega and others will start creating smart watches, since there were quartz models in the history of this brand, and not just mechanics. That is, in the past there were already various hybrids that attracted attention and resisted the onset of Japanese companies. Now, new threats that at first glance can be dealt with very well, the charm of smartwatches is declining, and people are choosing different solutions. But rationality is at the forefront, that is, the purchase should not be very expensive, and this also applies to smart watches, and ordinary mechanics or quartz models. It is possible that such collaborations as Omega x Swatch can significantly revive the market for ordinary watches, because the distribution of the same Apple Watch became possible due to the company’s brand, as well as a rather low price compared to Swiss manufacturers.
I like the Swatch Group approach, as the company partially devalues an expensive brand, but does not drop it, but pours values into a mass brand. And at the same time, it is increasing its presence in the market and sales, which is shown by the results of 2021 for the entire group of companies. A great example of how in difficult circumstances you can find ways to grow.
PS I wrote the text, and my hands itched to try a watch from Swatch, but for now I’ll look at my Omegas, I’ll walk them into the city in the evening, I just need to choose which model.
