Death of the MoonSwatch...

... being sold online.

https://www.watchpro.com/swatch-group-ceo-dashes-hopes-that-moonswatch-will-be-sold-online/

We all had sort of surmised & accepted this, but there it is. 

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If they put them in all of the Swatch stores I'm cool with it. It keeps them a bit "special", while making them far more available than they are now. I walk past a Swatch store every day I go into my office, but it wasn't one of the three in Canada pegged as a MoonSwatch seller, so I have no chance to get one right now.

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KristianG

If they put them in all of the Swatch stores I'm cool with it. It keeps them a bit "special", while making them far more available than they are now. I walk past a Swatch store every day I go into my office, but it wasn't one of the three in Canada pegged as a MoonSwatch seller, so I have no chance to get one right now.

I'd have to drive 5 hours to even have a chance to queue for one

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UnholiestJedi

I'd have to drive 5 hours to even have a chance to queue for one

Oh, I'd prefer if they went online, but based on the comments in the article online sales seem unlikely. 

If they are available at all Swatch stores, the chances that you know someone who can pick one up for you and mail it out is much higher than with the current situation. 

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Grey Market, they already are online....lol.  Fortunately, I have little interest in seeking one out.

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UnholiestJedi

I'd have to drive 5 hours to even have a chance to queue for one

That 4 hours and 45 minutes more than I'd be willing to drive for one. I swear that people would line up for cat turds with the proper marketing spin.

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So now we know the real endgame here.

My guess is the strategy was that Swatch wanted to expand the Swatch boutiques around the world. But what would be the compelling case for all of that expansion? There was no "hit" product that would drive customers to the boutiques.

"Lightbulb" - let's create a product that will have massive demand. We will deliberately limit production and cause mass market hysteria. Then we will string customers along to see if we really have a hit that we can use to leverage opening up more boutiques across the world. If not, then we'll sell it online. If it is a "hit", then boom we use it to open boutiques and drive consumers into those boutiques as the only place to purchase a MoonSwatch. Then production will be limited and keep customers coming back in the hopes of being to complete the set over time.

QED

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tempus

That 4 hours and 45 minutes more than I'd be willing to drive for one. I swear that people would line up for cat turds with the proper marketing spin.

Yeah, I'm not making that drive just for the watch. I'd have to include it in a trip for another purpose. 

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They missed the boat on this, I think.  The hype train has already quieted down significantly since launch as people have interacted with and become disappointed by the end product.

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I’m not interested in products companies don’t want to sell me. I won’t jump through hoops for the opportunity to buy a Rolex, let alone a Swatch. 

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They utterly failed to "seize the moment" with these. What could have been a project that could have reflected so well on Swatch and the watch industry, bringing new people into not just the hobby, but as actual things to wear every day other than an Apple Watch, was a blown opportunity. Even had they not foreseen just how huge the initial response was, they easily in the weeks that followed, could have made thousands more of them to keep the "flame alive" so to speak. Now it'll just be a laughable footnote. 

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ChronoGuy

So now we know the real endgame here.

My guess is the strategy was that Swatch wanted to expand the Swatch boutiques around the world. But what would be the compelling case for all of that expansion? There was no "hit" product that would drive customers to the boutiques.

"Lightbulb" - let's create a product that will have massive demand. We will deliberately limit production and cause mass market hysteria. Then we will string customers along to see if we really have a hit that we can use to leverage opening up more boutiques across the world. If not, then we'll sell it online. If it is a "hit", then boom we use it to open boutiques and drive consumers into those boutiques as the only place to purchase a MoonSwatch. Then production will be limited and keep customers coming back in the hopes of being to complete the set over time.

QED

The only issue is that the vast majority of boutiques are not company-owned.  They are, effectively, simply company-branded, but owned and operated by others.  So, for example, the Breitling Boutique here in San Diego is actually owned and operated by Westime.  The Rolex Boutique is owned and operated by Fourtane.  I don't know who owns and operates the Omega Boutique here - I should ask them - but it's certainly not Omega themselves.

In the case of Swatch, the Boutiques are nearly all, if not completely all, franchisees:

https://www.franchiseeurope.com/top-500/swatch/454/

As a result, boutiques are ultimately just glorified single-brand ADs.  Thus...

  • If you utilize the Boutique sales channel, when a boutique sells your product to an end customer, you the manufacturer only capture ~50% of that end customer, retail revenue
  • Meanwhile, if you utilize your own website to sell directly to the customer, you capture 100% of that end customer, retail revenue
  • I may not be smarter than the average bear, but I do know that companies want to capture 100% of something, rather than 50% of something

The reality is that we can't see behind the curtain.  We have no idea why Swatch isn't selling online, and only selling through Boutiques.

But, here's the best hypothesis I've heard to-date:  Swatch simply can't get production up high enough to fulfill demand and to stock both their own web site as well as whatever they're contractually obligated to supply to their Boutiques.  If they have contractual obligations to their Boutiques, then they gotta send every unit that way, which constrains their ability to sell online

In every business I've ever been asked to come into...

  • One of the very first things we look at is how to f*ck our "value-added resellers" - the watch equivalent is "our ADs and our Boutiques"  
  • You ALWAYS want to sell, first and foremost, through your own direct sales channel - why in the world would you EVER give someone else a cut of your money, if you didn't absolutely have to?
  • Value-added resellers (ADs and Boutiques) are nothing more than necessary evils, when you're operating from a position of weakness, and must rely on others to reach end customers
  • The moment you have any relative bargaining power whatsoever, you immediately find ways to f*ck your value-added resellers, and go direct

Why?  Because 100% of $X is always better than 50% of $X.

Given the choice between selling online at Swatch.com versus selling through a Boutique would be like choosing between Quasimodo and George Clooney.  Nobody chooses the former over the latter willingly.

So, best guess is that somehow the franchisees have Swatch over a barrel and are using their relative bargaining power to prevent Swatch from selling online.

Edit:  I do want to also point out that even were every single Swatch Boutique 100% company-owned, the economics of the online sales channel versus retail outlet sales channel always and invariably fall in favor of online.  Online sales margins are PHAT.  Retail sales margins suck a$$.  Yet, a number of companies I've been called into have favored retail over online in too many occasions to count.  Why???  In my experience, it's always boiled down to, "VP of Retail Operations (older, more seasoned, more savvy) won the political battle against the VP of Online (young, smart, and hard-working, thinks that what counts is value creation and delivering shareholder value - which means that he/she always loses to the much better political infighter, the VP of Retail).

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ChronoGuy

So now we know the real endgame here.

My guess is the strategy was that Swatch wanted to expand the Swatch boutiques around the world. But what would be the compelling case for all of that expansion? There was no "hit" product that would drive customers to the boutiques.

"Lightbulb" - let's create a product that will have massive demand. We will deliberately limit production and cause mass market hysteria. Then we will string customers along to see if we really have a hit that we can use to leverage opening up more boutiques across the world. If not, then we'll sell it online. If it is a "hit", then boom we use it to open boutiques and drive consumers into those boutiques as the only place to purchase a MoonSwatch. Then production will be limited and keep customers coming back in the hopes of being to complete the set over time.

QED

That is quite possibly the absolute truth of it...which we can applaud them for, or not. But in my opinion they simply bungled the whole thing and it is going to fade into a very short lived fad soon...if it hasn't already. 

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Mr.Dee.Bater

The only issue is that the vast majority of boutiques are not company-owned.  They are, effectively, simply company-branded, but owned and operated by others.  So, for example, the Breitling Boutique here in San Diego is actually owned and operated by Westime.  The Rolex Boutique is owned and operated by Fourtane.  I don't know who owns and operates the Omega Boutique here - I should ask them - but it's certainly not Omega themselves.

In the case of Swatch, the Boutiques are nearly all, if not completely all, franchisees:

https://www.franchiseeurope.com/top-500/swatch/454/

As a result, boutiques are ultimately just glorified single-brand ADs.  Thus...

  • If you utilize the Boutique sales channel, when a boutique sells your product to an end customer, you the manufacturer only capture ~50% of that end customer, retail revenue
  • Meanwhile, if you utilize your own website to sell directly to the customer, you capture 100% of that end customer, retail revenue
  • I may not be smarter than the average bear, but I do know that companies want to capture 100% of something, rather than 50% of something

The reality is that we can't see behind the curtain.  We have no idea why Swatch isn't selling online, and only selling through Boutiques.

But, here's the best hypothesis I've heard to-date:  Swatch simply can't get production up high enough to fulfill demand and to stock both their own web site as well as whatever they're contractually obligated to supply to their Boutiques.  If they have contractual obligations to their Boutiques, then they gotta send every unit that way, which constrains their ability to sell online

In every business I've ever been asked to come into...

  • One of the very first things we look at is how to f*ck our "value-added resellers" - the watch equivalent is "our ADs and our Boutiques"  
  • You ALWAYS want to sell, first and foremost, through your own direct sales channel - why in the world would you EVER give someone else a cut of your money, if you didn't absolutely have to?
  • Value-added resellers (ADs and Boutiques) are nothing more than necessary evils, when you're operating from a position of weakness, and must rely on others to reach end customers
  • The moment you have any relative bargaining power whatsoever, you immediately find ways to f*ck your value-added resellers, and go direct

Why?  Because 100% of $X is always better than 50% of $X.

Given the choice between selling online at Swatch.com versus selling through a Boutique would be like choosing between Quasimodo and George Clooney.  Nobody chooses the former over the latter willingly.

So, best guess is that somehow the franchisees have Swatch over a barrel and are using their relative bargaining power to prevent Swatch from selling online.

Edit:  I do want to also point out that even were every single Swatch Boutique 100% company-owned, the economics of the online sales channel versus retail outlet sales channel always and invariably fall in favor of online.  Online sales margins are PHAT.  Retail sales margins suck a$$.  Yet, a number of companies I've been called into have favored retail over online in too many occasions to count.  Why???  In my experience, it's always boiled down to, "VP of Retail Operations (older, more seasoned, more savvy) won the political battle against the VP of Online (young, smart, and hard-working, thinks that what counts is value creation and delivering shareholder value - which means that he/she always loses to the much better political infighter, the VP of Retail).

Hey this is yet another good answer. This thread is becoming far more interesting than the MoonSwatches themselves. 

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And Swatch changes its story to snatch defeat from the jaws of victory…

Why?

¯\_ (ツ)_/¯

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Mr.Dee.Bater

The only issue is that the vast majority of boutiques are not company-owned.  They are, effectively, simply company-branded, but owned and operated by others.  So, for example, the Breitling Boutique here in San Diego is actually owned and operated by Westime.  The Rolex Boutique is owned and operated by Fourtane.  I don't know who owns and operates the Omega Boutique here - I should ask them - but it's certainly not Omega themselves.

In the case of Swatch, the Boutiques are nearly all, if not completely all, franchisees:

https://www.franchiseeurope.com/top-500/swatch/454/

As a result, boutiques are ultimately just glorified single-brand ADs.  Thus...

  • If you utilize the Boutique sales channel, when a boutique sells your product to an end customer, you the manufacturer only capture ~50% of that end customer, retail revenue
  • Meanwhile, if you utilize your own website to sell directly to the customer, you capture 100% of that end customer, retail revenue
  • I may not be smarter than the average bear, but I do know that companies want to capture 100% of something, rather than 50% of something

The reality is that we can't see behind the curtain.  We have no idea why Swatch isn't selling online, and only selling through Boutiques.

But, here's the best hypothesis I've heard to-date:  Swatch simply can't get production up high enough to fulfill demand and to stock both their own web site as well as whatever they're contractually obligated to supply to their Boutiques.  If they have contractual obligations to their Boutiques, then they gotta send every unit that way, which constrains their ability to sell online

In every business I've ever been asked to come into...

  • One of the very first things we look at is how to f*ck our "value-added resellers" - the watch equivalent is "our ADs and our Boutiques"  
  • You ALWAYS want to sell, first and foremost, through your own direct sales channel - why in the world would you EVER give someone else a cut of your money, if you didn't absolutely have to?
  • Value-added resellers (ADs and Boutiques) are nothing more than necessary evils, when you're operating from a position of weakness, and must rely on others to reach end customers
  • The moment you have any relative bargaining power whatsoever, you immediately find ways to f*ck your value-added resellers, and go direct

Why?  Because 100% of $X is always better than 50% of $X.

Given the choice between selling online at Swatch.com versus selling through a Boutique would be like choosing between Quasimodo and George Clooney.  Nobody chooses the former over the latter willingly.

So, best guess is that somehow the franchisees have Swatch over a barrel and are using their relative bargaining power to prevent Swatch from selling online.

Edit:  I do want to also point out that even were every single Swatch Boutique 100% company-owned, the economics of the online sales channel versus retail outlet sales channel always and invariably fall in favor of online.  Online sales margins are PHAT.  Retail sales margins suck a$$.  Yet, a number of companies I've been called into have favored retail over online in too many occasions to count.  Why???  In my experience, it's always boiled down to, "VP of Retail Operations (older, more seasoned, more savvy) won the political battle against the VP of Online (young, smart, and hard-working, thinks that what counts is value creation and delivering shareholder value - which means that he/she always loses to the much better political infighter, the VP of Retail).

Point of Order- Quasimodo has Spring Drive....

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jose67

There are a lot of brands that copy designs, not only Chinese ones, there are also the Steinhard watches that look very much like Rolex watches and a ton of other brands that let themselves being "inspired" by some luxury house.

I would never buy a fake watch because I think that is wrong and hurtful to the industry, but as long as a watch clearly has another name on it, I don't see anything wrong with it. If I really want to have the original, I will save the money to one day get one, but my urge with the speedy was not there, so I settled for a watch with a similar vibe. (I got a real Omega Seamaster Aqua Terra because I longed for it and even though it burned a big hole through my savings, btw.)

I don't think the cooperation, i.e. Omega lending (only) its name for the watch, makes the latter any better and people that are blinded by a name and ignore build quality may see the company in a bad light when the watch falls apart in no time. So I think this may reduce the value of the name"Omega" for some people (not for me). Both Swatch and Omega have done themselves a disservice here, they could have surpassed the imitators instead.

If you were in charge of the project (build only, no marketing or distribution), what would you have done differently?

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DariusII

Me too -- Vegas is 440 miles away. Whatever -- it looks super cheap for its price.

If you planned a trip to Vegas for another reason (bachelor party, football game, etc.) Would you try to get one while there?

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RJLupin

I ran out of any enthusiasm relatively quickly on the MoonSwatch when I saw the ridiculous lines at the Swatch boutiques. I decided to just suck up the higher price and buy a Bulova Lunar Pilot. MUCH higher quality piece, daily wear rugged and REAL NASA cred.

That is certainly an option for me as well. 

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jose67

There are a lot of brands that copy designs, not only Chinese ones, there are also the Steinhard watches that look very much like Rolex watches and a ton of other brands that let themselves being "inspired" by some luxury house.

I would never buy a fake watch because I think that is wrong and hurtful to the industry, but as long as a watch clearly has another name on it, I don't see anything wrong with it. If I really want to have the original, I will save the money to one day get one, but my urge with the speedy was not there, so I settled for a watch with a similar vibe. (I got a real Omega Seamaster Aqua Terra because I longed for it and even though it burned a big hole through my savings, btw.)

I don't think the cooperation, i.e. Omega lending (only) its name for the watch, makes the latter any better and people that are blinded by a name and ignore build quality may see the company in a bad light when the watch falls apart in no time. So I think this may reduce the value of the name"Omega" for some people (not for me). Both Swatch and Omega have done themselves a disservice here, they could have surpassed the imitators instead.

I agree with copies/homages, I have no issues with them. 

I completely disagree about the Swatch/Omega collaboration, and the impact the MoonSwatch will have on the brands though. The MoonSwatch was released in March, people are still lining up outside stores to try to get them. People are still talking about them, and getting upset that they can't buy one from the comfort of their home. The MoonSwatch seems like a massive hit, and if anything will likely give people with realistic expectations a taste for the real deal. 

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Yeah, impact on the brand depends on the consumer segment, IMO. 

Enthusiasts as a whole there has been some shine lost, but there is still a ton of respect for Omega's actual watches. Swatch isn't really an enthusiast brand anyway, in my view. It's a gateway to the other stuff. The gorgeous movements of a tourbillon or a JLC, the finishing of a Grand Seiko. 

For the average non-enthusiast consumer? Big win for Swatch and Omega.

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UnholiestJedi

If you planned a trip to Vegas for another reason (bachelor party, football game, etc.) Would you try to get one while there?

Maybe. SUU is my Alma Mater and my friends and I went to Vegas so much the dancers knew our names. So unless I was going to personally meet someone like Thom Yorke from Radiohead, I am Vegas'd-out.

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Mr.Dee.Bater

Ha!  That's the funny thing...  ALL PR statements are bald-faced lies.  I mean, if you wanted to tell the truth, why in the world would you have PR to begin with?  Your actions always speak louder than words, and your actions would always convey the truth.

Today, my team will write PR statements for executives to send out...  and it's all 100% lies.  It's a really weird world that we live in...

  • Those of us writing the statements know that what we're putting on paper is all lies
  • Those who send out the statements in their own names know that everything they're sending out is all lies
  • Those who read the statements know that everything they're reading is all lies

And yet we all go about our days merrily in this sea of lies.  Weird.

Watching The World Burn GIFs | Tenor

Having worked in marketing for 20 years after a journalism career, I hear you.

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When you think about it, it has created a new segment in the grey market ecosystem. . Sure you can no doubt make a profit, but because of the actual cost of the Moonswatch, it has opened the doors for the next generation of flippers who can't afford to flip Rolexes but can pretty much do the same with Moonswatches.  You line up today, you line up tomorrow and days after.  Will the staff recognize you or care? 

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UnholiestJedi

From what I've seen, selling online was a leap of faithful logic on the part of consumers and not something Swatch actually said. 

I may be wrong and will be rightfully angry enough to pen a strongly worded message if it turns out that we were actually lied to about this. 

Swatch did indicate that these would be online. Here's a post I made a month ago, where they indicated they would be via their official twitter. Hence my strongly worded comments. 

https://www.watchcrunch.com/11SWM11/posts/omega-x-swatch-purchase-update-5945

Image

Me to Swatch:

Image
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Faz2.0

When you think about it, it has created a new segment in the grey market ecosystem. . Sure you can no doubt make a profit, but because of the actual cost of the Moonswatch, it has opened the doors for the next generation of flippers who can't afford to flip Rolexes but can pretty much do the same with Moonswatches.  You line up today, you line up tomorrow and days after.  Will the staff recognize you or care? 

Genuinely, I love flippers.  They are doing god's work.  I mean, for people with lots of time, but little money, it helps them to generate money.  For people with lots of money, but little time, it helps them to get what they want when they want it.  

Flippers are actually doing something that typically you can only do if you travel at 0.9c - they're creating time dilation!  Time is compressing in a sense!  Normally, I'd have to wait months to get a Moonswatch... but with the help of flippers, that time gets compressed down to...  nearly instantaneously if I go on eBay!  

Who needs warp drive or a flux capacitor, so long as you got flippers doing god's work?

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11SWM11

Swatch did indicate that these would be online. Here's a post I made a month ago, where they indicated they would be via their official twitter. Hence my strongly worded comments. 

https://www.watchcrunch.com/11SWM11/posts/omega-x-swatch-purchase-update-5945

Image

Me to Swatch:

Image

Well in that case... Hey Swatch!

Image
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I wouldn’t mind to have one myself, I'm kind of digging that Pluto watch, but this puts the nail in the coffin for me.  The nearest store is several hundred miles away, and I refuse to pay the overinflated prices I’m seeing online for them…..so I guess no moonswatch for me!

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And you can get convincing copies with papers, etc. direct from China -> https://youtu.be/pVG0N9OUOKs

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TempusFugit

And you can get convincing copies with papers, etc. direct from China -> https://youtu.be/pVG0N9OUOKs

For a lot less money and much better build quality the Pagani Design 

https://www.youtube.com/watch?v=LVZbAVR8P2c

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Lol the Chinese making a killing selling these fakes.