To mark the 40th anniversary of the release of the first Swatch watch line-up, we revisit Richard Benson's long-read on the rise of The Swatch Group from the Big Watch Book 2017.
As he points out, the answer formulated by the Swiss and expressed in the form of kooky-looking plastic would exert a profound influence not only on wristwatches, but on the way businesses think about brands, technology and customers. And this year it has been enjoying renewed interest from a new generation of watch-watchers.
The buccaneering spirit inherent in the independent Swatch OS rather recalled the early years of the brand, with its new watchmaking paradigm and pioneering experiments with electronics . It kind of helped that the company had been in the news a couple of years earlier, when, in spring 2015, Sotheby’s sold the largest collection of Swatches ever auctioned, a 5,800-piece lot amassed by European collector Paul Dunkel, for $6m , five times the estimated price .
The watches in question were mechanical, powered by hand-winding; or automatic, powered by the movement of the wearer’s wrist, with the energy converted by a rotor. Starting in the Fifties, there was interest among watchmakers in making timepieces that might use a battery as a source of power, as this would make the watch more accurate, and cheaper.
In 1979 , the banks that were effectively keeping the Swiss watchmakers afloat brought in Nicolas G Hayek as chief advisor, the founder and CEO of Hayek Engineering, a management consulting firm based in Zurich. “You have to understand, they were in deep shit,” says Giordanetti, who joined the company in 1987. “It needed to turn around fast. Yes, they could have made watches in stainless steel and sold more, but they needed to sell huge numbers, so many that they would create enough cash to transform the whole system of making and selling Swiss watches. So, how do you make and sell a volume product in large numbers? You lower the price.
“The case is the real innovation Swatch was built on,” says Giordanetti. “It changed the whole paradigm of watchmaking, because with conventional watches, you begin by assembling the movement. With this, you began with the case. It was the opposite of what anyone had ever done before. That and the plastic meant it could have a low price and the low price helped drive the sales.”
“The price was very important,” says Giordanetti, being “psychological, not rational. They have always offered more value per Franc than many luxury watches whose brands don’t actually make the movements.” Crucially, with a production cost of only CHF10, there was a margin that could, potentially, generate the Matterhorn of cash Hayek needed to sort out the whole group.
In design terms, Swatch really hit its stride in 1984, when the colours and faces and packaging became more adventurous and $1,200 respectively) and sales worldwide hit 2.4m. If there was a challenge now, it was to establish a seriousness that would prevent the brand being seen as a fashion fad and in 1985 it pretty much achieved that with launch of the Swatch & Art category.
In the Nineties, the brand opened a New York design studio that brought in a reinvigorating edginess and awareness of online culture. There have been phones, sunglasses, the Mercedes car project, giant Swatches, steel Swatches and, in 2014, the Sistem 51 — a previously unthinkable Swatch mechanical watch with entirely automated assembly.