The
story of Swatch, that is to say Swiss-Watch, is an incredible story. At the
beginning of the year 1982-1983, the Swiss horology is in trouble. Because of
the Japanese concurrency, lots of jobs are cut, just one man is optimistic,
Nicolas Hayek.
A brand born into a crisis
In
1982, the Swiss watchmaking is in a deep crisis. The main problem can be sum up
as a lack of rationalization of the production’s system. The industry is
bipolarized with in one hand, the watches with high prices whose production
is not efficient and the production of watches low segment, named also as
watches Roskopf, but not competitive compared with Japanese or American (Timex)
watches.
The
two majors companies, the ASUAG (Allgemeine Schweizerische
Uhreindustrie AG) and the SSIH (Société Suisse pour l’industrie horlogère) mainly suffer from this competition with Japanese brands, which produce good
watches at a better price.
The
decision is taken to merge the 2 companies to try to save them. At this period,
Nicolas Hayek is working for the new structure as a consultant.
In this difficult context, the
engineers of the Groupe ASUAG-SSIH are working on a cheap watch but of good quality, to compete with the Japanese on the low price segment. In 1982, the Swatch is
created.
In
the meantime, Hayek becomes owner of the company.
A simple idea but very efficient
The
Swatch is the result of a competition between Swiss and Japanese watchmakers about the
production of the watch the most flattest in the world. In 1982, a watch called “Delirium Tremens” was created, 1,98 milometers of
thickness. Few months after, this technology was adapted to create a plastic
quartz watch. It was the beginning of the Swatch.
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An example of Swatch watches, collection 2009.
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To launch a product, not an easy thing
At
the beginning, nobody wanted to sell the Swatch. Why?
Because it was a new
unknown brand, and the margin for the retailers was very short.
But
Nicolas Hayek understood the importance of branding and advertising very quickly.
So he decided for example to hang a giant Swatch of 140 meters on a building
in Frankfort. As said Nicolas Hayek “3 weeks later, each German baby knew what a
Swatch was.”
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An impressive marketing event : a giant watch on the Commerzbank, Frankfort, 1984.
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Finally an enormous success
The
brand Swatch is composed of 3 pillars, decided by Nicolas Hayek: an excellent
quality, an attractive price, and something provocative.
Since 1983, the success of the Swatch is still important. Today it represent
296 millions of Swiss francs of exportations from Switzerland to the world per year.
In
spite of his financial impact on the Swatch Group, which permitted to
re-position the others brands of the company to luxury. The
main impact of the Swatch was a marketing one, because, for the first time in the
watchmaking industry a brand was developed as a global brand, that is to say, the same products were sold everywhere, which was not the case before (watches
were adapted to the market, USA, Japan, Europe…)
Furthermore,
a real storytelling was made and big events put in place, as the rent of Zermatt for a week-end, a
village without cars to celebrate the 100 millionth Swatch sold.
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Zermatt, Switzerland.
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Obviously
since 1983, a large range of Swatch was designed. Some metallic Swatch were created in a range called Irony (1994). But the most important thing was the
decision to open flagship stores, directly inspired from the fashion industry.
The
aim was not to compete with the retailers but on the contrary it was proved
that areas where flagship stores were opened next to retailers increased the
sells of the last one.
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Flagship store Swatch, Osaka, Japan.
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Swatch, a standard bearer for the Swatch
Group
In 2013, the brand Swatch is the standard bearer of the Swatch Group. Although the brand targets the
low segment market of the watchmaking industry, the marketing significance of the
brand is still important for the entire company.
JVS.
References
- Pierre-Yves Donzé, Histoire du Swatch Group, Presses Universitaires Suisses, 2012
- Friedemann Bartu, Au-delàs de la Saga Swatch, Albin Michel, 2006
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