Swatch

LONDON - The Swiss watchmaker has been hit by a sharp decline in sales for its luxury brands.

Formed in 1983, watchmaker Swatch was the product of a previous economic downturn. It is painfully ironic, then, that the current recession is causing it such woes.

To most consumers, the name is associated with cheap, gaudy plastic watches that were the height of fashion in the 80s. However, the company is one of the biggest watch manufacturers in the world, also owning high-end brands such as Omega and Breguet.

Although Swatch appeared only in the 80s, its foundations extend further than the era of synthpop and Fame.

In the 70s, the Swiss watch industry was facing heavy competition from cheaply made Asian quartz watches. This forced SSIH and ASUAG - two long-established watchmakers - to go into administration at the beginning of the 80s. They agreed a merger and, from these ashes, Swatch, with its bold design and cheaper engineering, was born. These mass-market timepieces proved to be a lifesaver for the industry.

While high-end brands have generally weathered the recession better than most, the bottom seems to have fallen out of the market for luxury watches since last autumn, with Swatch reporting that sales have dropped between 10% and 14% in the past two months.

So, aside from hoping for an 80s revival that allows its cheaper watches to prop up its more expensive brands, what can Swatch do to regain its success? We asked Shaun Moran, creative director of LIDA, which works for Signet and Ernest Jones, and Richard Exon, chief executive of RKCR/Y&R, which handles the Seiko account.

SHAUN MORAN, Creative Director, LIDA

Swatch's uber-luxe brands have fallen into the tempting trap of positioning as 'accessible luxury' in the face of the recession. The minute a high-end luxury brand does this, its target market - the super-rich - looks elsewhere.

They don't want the watches they buy to be seen as 'affordable'. They may not be buying as many expensive items, but they still want to remind the world they are loaded - they just want to be a bit more discreet about it (even P Diddy has cut back on his bling in a bid to be sensitive to the sans-culottes).

That's why simply badging a watch with a celebrity isn't working. Omega has done this for years with Cindy Crawford - a campaign that is as 80s as pink legwarmers and shoulder pads.

The other problem is that 'Swiss made' is synonymous with quality and dependability, but also with being boring. What Swatch did so brilliantly with its plastic watches was to tap into the zeitgeist and create bold designs which took off. It needs to be bold again but across all its ranges.

REMEDY

- Keep the 'prestige' brands luxurious, not affordable or accessible. This way, Swatch will be much better placed to thrive as we emerge from recession.

- Talk to super-rich customers via personalised communications. Focus on heritage, innovation and knowledge, such as Breguet's replica of Marie Antoinette's watch.

- Use celebrity endorsements only for the middle ranges. The super-rich don't want to be seen chasing stars.

- Continue to be bold with the Swatch brand: perhaps it could launch personalised watches online, or watches that court controversy? Think pink 'Team Tweedy' and blue 'Team Cole'.

RICHARD EXON, Chief Executive of RKCR/Y&R

Swatch feels like an artefact from recent history. A plastic prop from a time when only designers used Apple computers, only academics had heard of the internet and most households had one TV with three channels.

We marvelled at the delicious contradiction that something brightly coloured and mass produced could be perceived as high value and desirable.

Swatch created a whole category, finding a gap in the market between cheap and nasty on the one hand, and expensive luxury on the other.

Boy, did it own that market for years.

I can think of five Swatches that I owned over a 15-year period in school, college and early work. For anybody short of enough ready cash for a 'proper' watch, there simply didn't seem to be any alternative.

Then, as ever, the world changed. Competitors responded, the original Swatch generation graduated to mortgages, marriages, kids and Tag Heuer - and mobile phones arrived complete with built-in clocks, of all things. Try asking somebody under 25 for the time, and watch the iPhone/Nokia/LG come out.

REMEDY

- The Swatch brand needs a wholesale refresh, with particular attention paid to regaining a sense of leadership and, its original pioneering personality. Too much of its current activity feels like a grown-up brand desperately trying to engage a youth audience via borrowed interest. Instead focus on what makes Swatch unique and worth paying for.

- Free up the digital strategy. There seems to be lots of strong Swatch content online, but not enough reach and engagement. It needs to break out of simply occupying its owned space.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer