Gen Z! Millenials! Everybody wants to sell to them! They’re the future of investment, commerce, travel, and hospitality. Every dive bar needs to sell Aperol Spritzes now! Every hotel has to have a hot yoga session for influencers! Every watch – even brands that survived world wars and the Quartz Crisis – needs a cheap Swatch copy!
With the launch of the Blancpain x Swatch collab, it’s clear that the Swatch Group marketers know very little about watches and their market. As evidenced by the rise and fall of the Moonswatch – you can’t, with a straight face, tell me that anyone cares about the Moonswatch at this point – Swatch Group loves the burst of attention it’s getting from the fashion-forward, Otaku-esque youths aka hypebeasts. They are garnering this attention for a very simple, negative reason: this generation knows that there’s a sucker born every minute.
Their secret? Buying junk and selling it for a lot of money.
This was especially evident during COVID. During those weird years, teens and young men – 15 to 25 or so – entered the “investment” markets. The NFTs, shoes, clothes, trading cards, and even video game cartridges (one Super Mario Brothers cart sold for $660,000) that they bought “as an investment” suddenly became valuable thanks to an influx of similarly-aged (often older) crypto millionaires. During the last few crypto run-ups, people whose dumb luck got them into Bitcoin and Ethereum early created wealth in a segment of the population whose entire financial education came from YouTube and TikTok.
My son, who was 15 during COVID and in High School, took $1,000 he saved from writing for us, invested it into meme stocks that he learned about on Discord, ran it up to $9,000, and then lost $8,000 trading options. His sense of his own financial prowess thus shaken, he hasn’t invested much since, but if the market hadn’t tanked and he hadn’t messed with options, he would have begun seeing easy money everywhere. What he didn’t realize is that a lot of this run-up happened in unregulated markets full of wash trading and fake demand generation. But how could he know? The people he trusted to educate him on the vagaries of the market, were in on the scam.
So the [Insert unknown brand] x Swatch collabs are, for that generation, cash grabs. They know they can resell those watches at a few hundred dollars above retail. In this specific case, with a relatively unknown luxury brand, the kids are getting about $400 for a few hours of standing in line simply because they know there is a ready market of suckers out there who can’t wait to own a plastic watch.
The Swatch Group isn’t building a dedicated customer base. They aren’t convincing those same hypebeasts to come in and peruse their Basquiat collection. They’re training a generation of hungry little lads to stand in line, give the stores a rush of new blood, and then abandon them as soon as the latest Breguet x Swatch collab is sold out. A few months later the entire line is kaput, idling along in stores already full of junk, as interesting to the average hypebeast buyer as an Instagram post from three minutes ago.
Watches are tools. Watches are luxury items. Watches are not, in most cases investments. These same buyers are going to buy a real Blancpain and realize that it loses a quarter of its value as soon as they wear it off the lot. And they’re going to be pissed. Watchmakers can do all sorts of stupid things to drive up demand – create a hostile authorized dealer network, lie to consumers about scarcity, create meaningless collabs – but all it will do is drive away actual interest.
If this rant seems like a “old man yells at cloud,” it is. But the cloud in question is real. It darkens the market, makes it easy to think that you can make easy money flipping watches, and turns the industry into a circus. It’s clear to me that the entire luxury watch industry will go belly up in the next decade. I just hate having to watch it self-immolate so quickly.