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Swatch, constantly breaking the mould

DON’T FORGET THE MIDDLE CLASS

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June 2017


Swatch, constantly breaking the mould

Nearly 35 years on from its launch, the little plastic watch is still proving an unprecedented hit. The reasons behind this success story lie in the very foundations of its creation, where technology, production methods, marketing and design came together to form a perfect quartet.

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“his project was supposed to last 5 years and produce 5 million watches, but we had absolutely no idea of what was about to happen!”. At the other end of the line, Elmar Mock bursts out laughing. For nearly 35 years, Swatch’s co-inventor has had a front-row seat as this little plastic watch has become a global phenomenon. It got off to a flying start, with 4 million watches sold in the year following its launch, but it is the brand’s longevity that is really striking today. Far from running out of steam, Swatch made a turnover of more than 700 million francs in 2015 according to the annual report on the watchmaking industry by the Swiss bank Vontobel, a leading authority in this field. The brand’s success is explained not only by its unwavering dynamism, but also, and above all, by the very foundations of what at the time was a completely disruptive innovation.

To demonstrate the continuing extraordinary obsession with Swatch, we need only recall the prices fetched at auction by several collections in recent years. In Hong Kong in 2011, a collection of 4,363 models built up by a Swiss couple sold for 6.6 million dollars. Four years later, again in Hong Kong, a Swatch lover paid nearly 6 million francs – four times the pre-sale estimate – for the 5,800 watches lovingly collected by a seller from Luxembourg over a 25-year period. That same year, in Geneva, the 4,000-odd items accumulated by the two designers behind Swatch, Bernard Muller and Marlyse Schmid, went for 1.3 million dollars.

But it’s not just de vintage market that’s booming. Swatch is sold in some 700 retail outlets worldwilde and is currently providing a big hit in France, Italy, Switzerland and of course China. The Swatch Lab in Zurich continues to create new with the help of renowned designers, graphic designers and artists from around the world. Its resolutely young and cosmopolitan style is a hallmark of the more than 240,000 members of the Swatch Club, which was set up by the brand. “As well as connecting with them directly via social media, we also regularly meet them in person at our local events,” explains Creative Director Carlo Giordanetti. “We organise unique biannual events for the Gold & Pioneers group, which brings together our most passionate and loyal fans, and explore the world with them!”

Swatch, constantly breaking the mould

A painful birth

This success story is unique in the history of the fashion industry and has its roots in the circumstances and developments that led to the birth of this truly disruptive innovation. It starts with the economic climate at that time: in the early 1980s, the Swiss watchmaking industry had, for over five years, been facing the most serious crisis in its history. The 1973 oil crisis, followed by the increase in the value of the Swiss franc and, of course, an influx of low-cost quartz watches (largely from Japan) onto the global markets, plunged the industry into a catastrophic situation. Between 1974 and 1983, the number of movements produced fell from 84 to 30.2 million.

Bankruptcies and redundancies were rife. Some brands were sold, while other companies, particularly movement manufacturers, merged. 1978 saw the start of a series of mergers involving the movement manufacturer ETA, which continued until 1982. A year later, and under the leadership of a certain Nicolas G. Hayek, the Société Générale de l’Horlogerie Suisse or ASUAG (which owned ETA) and Société Suisse pour l’Industrie Horlogère (SSIH), both of which had taken a financial battering, merged to form the Société de Microélectronique et d’Horlogerie (SMH), which was renamed “Swatch Group” in 1998.

A technological revolution

This tough climate paradoxically proved fertile ground for the emergence of new visions and it was against this backdrop that the conditions for success gradually fell into place. In 1979, ETA’s Micro Crystal division became the first European company to mass-produce quartz movements. A young watch engineer named Elmar Mock was tasked with developing plastic insulators using an injection moulding machine. History was being made. Mock became hooked, even going so far as to study plastics technology. What he learned would prove decisive in coming up with a brandnew concept.

The key challenges at that time were clear to everyone: only a watch made cheaply in Switzerland would be able to recapture market share in the low-end segment. Without being asked, Elmar Mock and his colleague Jacques Müller set about designing a brightly coloured plastic case. They were soon called upon to sell their idea to the CEO of ETA, Ernst Thomke, after being hauled up to explain themselves for ordering an injection moulding machine costing half a million francs. Unbeknown to them, the two men had hit the jackpot. In his book, La fabrique de l’innovation, Elmar Mock recounts how Ernst Thomke exclaimed “I’ve been waiting for this for over a year!”

Between 1980 and 1983, Elmar Mock went on to adapt plastic machining techniques, particularly those used in the automotive sector, to watchmaking. For example, his idea of using ultrasound to weld a transparent polymer (the crystal) to a coloured one (the case) was inspired by the way in which vehicle indicators are manufactured. This solution made the watch irreparable as the case was made from a single piece of plastic.

A stroke of marketing genius

Although the use of plastic and ultrasound welding may not seem like much, they paved the way for a whole new era in Swiss watchmaking: automation. Up until that point, no watch had ever been mass-produced. In addition to this, the production lines that were subsequently set up required practically no operatives, meaning that production costs were very low.

Although this was a revolutionary idea at the time, in terms of the use of a new material, the watch’s structure (the movement was fixed onto the back of the case and the plate removed) and the cost price, it alone does not explain Swatch’s success. After all, the market was flooded with cheap watches. It was Franz Sprecher who would completely transform how it was perceived. At a time when marketing was not yet the selling machine it is today, Ernst Thomke tasked this independent designer with turning the little plastic watch into a fashion accessory. “Its classic, simple shape means that you can put whatever you want on it,” explains Xavier Perrenoud, the founder of the Atelier XJC design studio and professor of design at the Ecole d’Art de Lausanne (ECAL). “It’s not a watch; it’s a concept – one that can be constantly refreshed and renewed. It’s timeless.”

Twelve Swatch (a contraction of “Swiss Watch”) watches were launched on the Swiss market on 1st March 1983. In the initial weeks, they were seen as a sacrilege by the industry and the brand struggled to find retailers. Professionals in the field were particularly horrified by the idea of a “disposable” watch. However, consumers soon took an interest and Swatches started flying off the shelves. “The concept was also underpinned by the idea of the ‘Second Watch’,” Carlo Giordanetti continues. “This notion revolutionised the watchmaking industry and created a market that didn’t exist before.”

Up until the end of the 1970s, a watch was an expensive and often one-off purchase in a person’s life. Swatch did away with this approach. With its focus on ever-evolving design, the idea of owning a second – and even a third or fourth – timepiece propelled the little plastic watch to global stardom. Although there are no official statistics, it is estimated that some 600 million Swatches have been sold since the brand’s launch.

“It’s a Prolex,” explains Elmar Mock, who has gone on to become an international expert in the field of innovation. “A Swatch is a Rolex for the people: it’s beautiful, easily recognisable, sturdy and works well. You don’t have to worry about taking it on holiday, losing it or having it stolen. It doesn’t convey a downmarket image; it’s a watch made for everyone and no one is committing a style faux pas by wearing one. It has an understated strength...”

It remains to be seen whether the 21st century will mark the end of this success story. “The 20th century was the era of coordination,” Mock reflects. “Organisation was based on time, a schedule and specific locations. These days, with smart devices, people can see each other where they want, when they want! It’s a paradigm shift and I’m not sure that our lives will continue to march to the beat of our watches in the way they used to. Time is still there, but the pace is picking up, moving from classical music to jazz. Swatch has to follow.”

Swatch, constantly breaking the mould

FLIK FLAK: THE EDUCATIONAL WATCH

Swatch’s worldwide success soon gave Swatch Group another idea. 1987 saw the launch of Flik Flak, a children’s brand based on the model of its older sister. It was designed with three objectives in mind. Firstly, it was made to boost sales, with products that were specially designed for children aged between 4 and 10, particularly in terms of safety. It was also intended to be educational and offer a fun way of learning how to tell the time. Finally, it served a strategic purpose, as kids brought up wearing Flik Flak watches would grow up to become customers.

Flik Flak was the very first brand targeted exclusively at children when it was launched on the markets. As well as being waterproof and shock-resistant, these plastic watches were also subjected to a whole host of quality tests, focused in particular on the robustness of the materials and whether the chemicals from which they were made were harmful. But Flik Flak went further. With the help of experts, the brand developed an educational concept for learning how to tell the time based on two characters – Flik and his little sister Flak – and a colour code that made the watches easier to read. All of this came packaged in themes dear to children, from princesses to pirates and explorers.

The educational principle therefore relates not only to understanding how to read a watch, but also to becoming accustomed to wearing one. As they grow up, buoyed by their good experience with Swatch Group, children may be tempted to buy a Swatch, then a Tissot, a Longines, etc...