Omega x Swatch: decryption of a collaboration

EVOLUTION AND KEY FIGURES IN WATCHMAKING

Before getting to the heart of the matter, as in any case study, it is essential to know the context in which this operation occurs. Watchmaking statistics still indicate a very great polarization of the sector .

The figures from the Swiss Watch Federation are clear: by comparing the year 2021 compared to 2019 although exports of wristwatches increased by 3.5% in value, volumes fell by 23.8%.

How is it possible ? In fact, it is the high-end which alone is driving the growth of the sector with +9.7% compared to 2019, the mid-range limits the damage with -3.5% and the entry-level loses ground considerably with -25.1% ! Even more than in the past, the watch sector is showing a sham performance with a small number of brands, mainly in the high-end and luxury sector, reaping the benefits of the return to growth.

Entry level Swiss wristwatches are in fact very strongly competed by connected watches. Two figures to illustrate this fact: in 2021, nearly 80 million connected watches were sold worldwide while, all categories combined, Swiss watches were sold to the tune of 15.7 million watches.

This reminder of the evolution of current markets allows us to partly understand the challenges for the brands occupying the different ranges in the watch sector, but let us now refine the study by looking more closely at the two brands involved in the collaboration. These two brands are in truth very different although belonging to the same group.

OMEGA OR THE EPIC OF A HISTORIC WATCH BRAND

Omega is, in my opinion, one of the most beautiful brands in the watch sector. It occupies a special place in many respects because it is one of those brands that participated fully in the great times of watchmaking.

You know it through two of its current pillars in terms of communication: the space adventure with the famous Speedmaster Moonwatch but also through its constant appearance in films about the least secret agent on the planet: James Bond and this since Golden Eye with Pierce Brosnan until No Time to Die with Daniel Craig.

But reducing Omega to just these two aspects would be extremely simplistic. The brand's history is one of the richest in the entire sector.

The company was born in 1848 but its current name appeared in 1894. The name Omega actually comes from one of the calibers developed by the company. This seems anecdotal, but in fact we have here an essential point about the real identity of the brand, its name does not come from an idea advertising or the name of a founder but with one movement and there we touch on the central point which is now found on the scale of the group which owns Omega: we are dealing with an industrial model concentrated on two pillars: the control of vertical integration in production and research into technical innovation.

Omega has been and still is one of the greatest watchmaking houses in the world , whether in the 1960s or today. Thus, Omega occupies 2nd position with 7.5% of the global market share in value in stores for wristwatches according to a study by Morgan Stanley.

Omega is in fact clearly one of the brands that most significantly boosts the results of the entire Swatch Group to which it belongs. Its positioning has evolved over time.

If in the past, a majority of brands actually occupied more or less the same price positioning , the brand was positioned a few decades later in the high-end and luxury segment and thus finds itself in head-to-head competition with Rolex which occupies 1st position with 28.8% of the global market share in retail values ​​for wristwatches.

The brand uses new generation mechanical calibers + while continuing to use for some of its reference models calibers inherited from previous periods such as the manual winding chronograph caliber equipping the traditional Speedmaster Moonwatch Professional.

SWATCH OR THE MARKETING CONCEPT BECOME A RALLYING POINT FOR SWISS WATCHMAKING

If Omega is a very traditional century-old brand, the Swatch brand was born much more recently: in 1982. The date is important because at that time we were still in the middle of the quartz crisis.

Traditional watchmaking houses are generally (very) poorly developed, many have gone out of business, competing with the massive arrival of inexpensive Asian watches using quartz. At that time, practically all Swiss brands had to largely abandon beautiful mechanical calibers and also make quartz, whether Omega, Zenith or Rolex .

Even by using quartz, these brands were not out of the woods, it was in this context that an idea germinated in the heads of a few Swiss engineers and managers: Ernst Thomke, Elmar Mock and Jacques Müller to which will be added subsequently the intervention of a marketing consultant: Franz Sprecher. These people will develop an idea which will go well beyond the marketing stunt to become a strategic breakthrough for Swiss watchmaking: the idea of ​​the Swatch.

You know Swatch, they were very present in the past and often constituted a first experience in the field of watches. To face the Japanese tidal wave of the time, the idea was to develop a new watch on two pillars:

• On an industrial level, design a watch that is very easy to mass produce - but of high quality - with very low production costs.
• In terms of marketing, creating a fun, colorful, plastic watch, offered at an extremely affordable price (50 Swiss francs at the time) supported by dynamic communication

The experiment was a global success which made it possible to restore the resources and also the time necessary to the rest of the industrial fabric. This breath of fresh air made it possible to reform, rebuild and subsequently return over time to mechanical watches.

Swatch, from the start, allows itself much more freedom compared to historic brands which will tend to manage their heritage “more wisely”.

The idea of ​​bringing fun into the relatively traditionalist world of watchmaking translates into more daring designs, the use of more colorful colors or the use of materials – such as plastic or variants such as bioceramic – that the oldest brands would not necessarily have used.

The Swatch brand has also already made collaborations with other brands such as the Japanese A Bathing Ape or with the art world with for example the Center Pompidou or the Louvre.

So, very accustomed to collaborations, the Swatch brand is this time aiming for something quite new in watchmaking: a collaboration between an entry-level watch brand and a high-end watch brand.

OMEGA AND SWATCH: WHAT IF OPPOSITES ATTRACT?

Once these important reminders have been made, you can now understand everything that separates the two brands that belong to the same group and also keep in mind the challenges and developments in the sector. Swatch seems 1,000 miles from Omega in terms of its origins and positioning.

In the end almost everyone differentiates between the two brands. We could say that nothing seems to unite them as the “DNA” of the two brands seem opposed. But the real link between the two is not only financial via their membership of the Swatch Group: it is also industrial.

The Swatch Group is characterized by a highly integrated structure on an industrial level. Basically, brands like Omega or Longines or Hamilton had their own historical calibers, many of which were from the houses themselves .

Today, following the grouping of these brands under the umbrella of the Swatch Group, the calibers are produced through a common structure: ETA.

Although both designed and manufactured by ETA, the Master Co-Axial is dedicated to Omega models while the Sistem51 is dedicated to Swatch brand models: these movements are not at all equivalent, one being high of the range when the other is in fact a top-notch mechanical movement. The industrial integration of the Swatch Group has two positive effects:

• Rationalization and therefore optimization of production: this is the great strength of the Swatch Group which overcame the quartz crisis by optimizing its industrial production as much as possible.
• Mastery at the industrial and technical level with the corollary of very supervised quality of production: which is easier to control via a single structure rather than through several separate subsidiaries

But even if Omega and Swatch are part of the same very industrially integrated group, a collaboration between the two brands does not necessarily lead to a successful collaboration. To do this, there are principles to respect.

THE GENERAL PRINCIPLES OF A SUCCESSFUL COLLABORATION

BonneGueule's readership is used to collaborations because they regularly encounter this type of operation which allows two brands to join forces to carry out joint action.

In the clothing industry, they have become more and more frequent : to take a famous concrete case, a giant like Uniqlo regularly partners with Jil Sander but we could also have mentioned the example provided by H&M and Balmain. These two cases are emblematic of some of the collaborations because they associate a large fast fashion group with a luxury house.

In a way, it combines the mass market with the exclusive character of the label of an artistic creator or a very high-end house. However, not all collaborations are limited to marrying two brands that seem to occupy diametrically opposed positions. Thus, there are other types of collaborations which can bring together brands of comparable size or companies which each have a particular skill set or a different audience.

BonneGueule has carried out its collaborations but with a selection of very cutting-edge brands specialized in their fields. Benoît, in this article , details the underside of the collaborations carried out by BG. To summarize, when BG approached a brand to develop a collaboration, it was mainly about:

• Search for skills in a particular field to develop a product using a specific material or a technique mastered by one of the parties
• Seek complementarity with the brand’s “brand” and/or a particular “vibe” which is different from that of BonneGueule but which is “strong” and deserves to be highlighted through a collaboration

The key words in a collaboration for BonneGueule are: complementarity – know-how – originality . And there we already see a difference compared to a large number of collaborations present in the sector. There are two types of collaborations: those that focus on the product and those that relate to marketing collaboration between two brands.

Of course, one should not have a purely binary reading, of course that the two aspects are mixed but there is an essential difference in the final objective of the collaboration: on one side all the energy of the project will be focused on the realization of a final product while on the other side all the energy of the project will come from the desire to carry out a “marketing coup” synonymous with a “one shot” with potentially ephemeral success.

A collaboration requires a lot of effort, it is about combining the skills and codes of the two brands but this also has the corollary of crossing the image of two brands .

It is important for each of the two brands to not only know well their own universe + and know the world of the other brand well.

Finally, the chemistry between the two teams is essential because it would be difficult to carry out any project if one of the parties does not share the same objective and the same energy as the other.

The principles having been established, what do we think of the collaboration between Omega and Swatch?

OMEGA X SWATCH OR SWATCH X OMEGA?

Although both brands do part of the same group the two brands are very different in almost every way.

1. ARE THE SWATCH AND OMEGA BRANDS COMPLEMENTARY?

The two brands can be complementary: they certainly do not share the same positioning, the two audiences are mostly different .

Omega has, among other gems, in its luggage the Speedmaster Moonwatch which is perhaps one of the most beautiful traditional mechanical chronographs and certainly the most emblematic in the sector. And Swatch, by its origin and its positioning, can afford to dare much more compared to the traditional house that is Omega, the latter having focused on a resolutely high-end positioning.

2. CAN OMEGA AND SWATCH REPUBLISH THEIR SUCCESS?

The watch having been released and as I write these lines out of stock in the stores, the answer to this question is yes: it is already a success which seems to fulfill its objectives in commercial terms but also in terms of buzz due to relays in the traditional press or in social networks.

3. IS THIS THE BEGINNING OF MORE LASTING SUCCESS FOR BOTH BRANDS FOLLOWING THIS COLLABORATION?

I'm not so sure. Is it so revolutionary to see a quartz and bioceramic Speedmaster arrive? I ask myself the question and my opinion is divided. No, I don't think the iconic Speedmaster is distorted by a version that works with a battery and is sold for 250 euros.

Has the Rolex Submariner been distorted by the appearance of the Ice Watch which is – from a design point of view – very visually inspired? No. The success of the Submariner model or the Rolex brand has never been disrupted by the Watch in any way.

On the other hand, the big difference between the two is that Rolex has never had the slightest agreement with Ice Watch, the name Rolex obviously does not appear on the dial of an Ice Watch This is in no way a collaboration between two brands but rather a design inspiration from one brand compared to another brand.

For Swatch, I think the operation is positive. The brand faces very fierce competition in its price range, especially since its price range has been invaded by the tidal wave of connected watches. It is in the very nature of Swatch to carry out marketing stunts to create buzz and on this side, it has been a complete success for Swatch.

For Omega... I'm not so sure though. What does Omega have to gain from this collaboration? More notoriety in relation to the clientele it targets? This clientele is already largely influenced by the brand's targeted communication operations. Refocus or revitalize the image of the Speedmaster? This Omega model already occupies a central place, it is even a “cash cow” for the brand and the Swatch Group.

If as I write these lines we can talk about the success of this collaboration because the product of this collab is sold out, there are still some fears to have about this type of collaboration and one has come true:

Symptomatic of the most vulgar of speculations, the phenomenon of same-day purchase and resale is, in my eyes, one of the most pathetic features of this operation.

This phenomenon obviously exists in sectors other than watchmaking such as clothing with the example of collaborations between fast fashion brands and luxury designers with these queues which form in front of the boutiques to jump on these products like s t was a basic necessity product during a shortage... obviously, part of the public thought it was a "good move" to do by immediately reselling these products with their labels on online platforms.

In the watch sector, this also exists for some luxury brands, but it is more discreet. The brands concerned play on the phenomenon of scarcity – very artificial indeed – to maintain the feeling of exclusivity and desirability of their products but, in doing so, they maintain the same phenomenon of immediate purchases and resales by part of the customers for purely speculative purposes.

There are no small profits, you will certainly tell me, but for my part I find absolutely nothing healthy because this not only distorts the market and above all it gives a completely truncated idea of ​​the entire sector. If I am interested in watches, it is certainly not by seeing them as objects of speculation.

In a certain way, I am trying to reconnect with the view of our predecessors who considered watches above all as beautiful objects that were a pleasure to have on your wrist and which also had a use: that of telling the time. Quite simply.

And not to finish five minutes after going to the store on an online platform with a price multiplied by five or six…

THE “GOOD MOVE” MARKETING THAT OCCULTS THE PRODUCT ITSELF

Ultimately, what I remember from this collaboration is the affixing of the Omega name to a Swatch: in my opinion, this is the real source of the buzz. So, the marketing stunt seems to me to overshadow the product resulting from this collaboration. It would have been interesting to have created buzz about a revolutionary or at least very innovative product. There is a bit of that in this MoonSwatch with the use of bioceramics.

The use of bioceramics is not without interest but it is counterbalanced by the use of a quartz movement powered by a battery which is not very organic.

The choice of quartz was obviously made to be able to offer the watch at an affordable price. To allow a whole section of the public to develop curiosity about the original Speedmaster Moonwatch in steel and with a mechanical movement? Sometimes you have to know how to open a window on watchmaking to allow its rediscovery, especially in a world which has partly lost the reflex of checking the time analogically, on your wrist.

As you can see, I am ultimately divided on this collaboration. Not for reasons of conservatism in relation to watchmaking but rather because I am doubtful about the basis of this collaboration which seems to me to be more about marketing rather than the development of a strong and innovative product. And I don't see anything innovative in taking the design of an emblematic Omega watch and transposing it to Swatch and selling it for 250 euros with a quartz movement and a non-metallic case.

In this way, if we escape the short termism of the moment focused on relaying the buzz of the moment, it is rather a half-success in my eyes in the medium and long term.

Moreover, a telling sign, I have heard more talk in the sector or among the public that this collaboration is a “good marketing move”… The circle has come full circle: a good marketing move that has been perceived by a large part of the public as a good move to make on resale. But I want to say: is that really a compliment?

Having created the buzz at the start of 2022, the time of a fleeting collaboration between two brands, were all these efforts really worth it in the end for Omega and more generally for the Swatch Group? This question will be up to you to decide.