The Time is Right for a New Direct-to-Consumer Watch Brand
Watch Swatch, but Swatch Should Also Watch Out
I am certainly not privy to any insider watch industry knowledge, but as a burgeoning horological enthusiast who also happens to work with startups, I do see patterns.
Direct-to-consumer brands have proliferated at a ridiculous pace. Their growth is often partially fueled by deftly removing the inefficiencies in a given supply chain. With the typical flow from manufacturer > distributor > retailer > consumer, the cost of an item is padded at each step. has been upended by new brands have upended this system by cutting out the intermediary participants in the path from the factory to the buyer. We’ve seen this with glasses (Warby Parker), mattresses (Casper), shoes (Allbirds), toothbrushes (Quip), and the list of verticals where incumbents are facing new D2C brands goes on and on and on…
“Will Swatch disrupt the industry from within or will a new upstart beat them to it? While I may bet on the former I’d like to hope for the latter.”
In some of these cases, we’re now seeing entrenched players trying the tactics pioneered by upstarts. Volvo has a subscription program where you can change your car as often as your iPhone, Gap launched “Hill City” as a new athleisure brand, and other companies such as Kroger and Unilever are deciding to buy instead of build.
However, the watch industry is noticeably absent from this trend. I’m not ignoring MVMT (nor their exit) or the many excellent microbrands that have popped up courtesy of Kickstarter.
There is one leviathan that could go the route of behemoths in other industries by borrowing the battle-tested strategies of startups while leveraging their existing assets to connect with consumers in a new way: Swatch Group. The Swatch brand itself already knows the value of experiential marketing and connecting directly with shoppers through its own storefront history.
It seems that the next logical step for the company would be to launch a new brand that foregoes brick and mortar retailers altogether. Will Swatch disrupt the industry from within or will a new upstart beat them to it? While I may bet on the former I’d like to hope for the latter.
Given the collapse of mid-market retail, gray-market concerns, and other disruptions to the industry, it seems like there is an opportunity. Yet there haven’t even been faint rumblings from Switzerland. With a revolutionary movement like the SISTEM51, they have the pieces in place to build something compelling at an accessible price point.
Aside from a handful of independent outliers (NOMOS and Weiss spring to mind), I don’t see real rivals that have the expertise across production and parts while also offering an in-house movement.
One possible exception is Christopher Ward. The British watchmaker began operating in 2004 and became the first luxury watchmaker to sidestep the traditional industry middlemen. In 2014 the company merged with Synergies Horlogères and this gave rise to the company’s house-made movement: the Calibre SH21. While the Swiss-made movement may be proprietary, it still is a Swiss movement from an originally-Swiss company going into a British watch. This is why I see it as a “possible” exception and not a “definitive” one. I know this may seem to be a pretentious and perhaps meaningless distinction in a globalized economy where the watchmaker may only be a Slack call away.
Additionally, I believe that a new brand would be better served by skipping the production of quartz watches while simultaneously focusing on an in-house movement strategy and instead focus on creating only one model with the company’s debut movement. The watch world is somewhat like starting a distillery (stay with me here). Reaching the point where you can introduce your first product takes years and investors, capital, possible customers, and the market may not wait. This doesn’t mean it is impossible, but it highlights the nuanced challenges of setting out as a timekeeper.
The number of Miyota-driven microbrands offer varying degrees of craftsmanship and aesthetics (Baltic, Martenero, and Oak and Oscar stand out to me as leaders in this pack), and it seems like it is only a matter of time before an entrenched player starts taking an interest. Perhaps it will be through an acquisition of a Farer, Autodromo, etc. but I haven’t read much about how the microbrand landscape might evolve either via building or buying a brand following MVMT-Movado deal.
I know I’ve been dismissive of MVMT’s impact in the watch world and direct-to-consumer space, but I have a reason. MVMT feels more like Dollar Shave Club: getting the essential with a dash of style at a price that has not become bloated by intentional price padding along each step of the supply chain. What we have yet to see which watches is the equivalent of Harry’s: a great shaving product that focused on quality to the point where the startup bought a factory in Germany to gain their domain expertise, craftsmanship, and history while connecting consumers with quality directly.
“Given market factors and forces, there is now an opportunity for a high(er) end direct-to-consumer vertically-integrated watch brand to emerge.”
While we are in a time where the ability to own a beautifully designed and thoughtfully crafted timepiece has been democratized, we do not see competitive innovation when it comes to the movement housed inside the case. This most likely stems from problems around research and development, the economies of scale, and the sheer cost associated with manufacturing. Despite this, there still seems to be an opportunity for something different.
A collector could fill their dresser with watches all driven by the same movement where each one comes from a different emerging crowdfunded microbrand. Size and functionality are limited by the movement type sourced, which adds a constraint to these artisans trying to differentiate in a crowded field.
This isn’t to say that providing great design at more accessible prices isn’t a valuable new segment in the industry. But, we deserve the same degree of variety and excitement in how time is told and not just in how time looks on our wrist.
Given market factors and forces, there is now an opportunity for a high(er) end direct-to-consumer vertically-integrated watch brand to emerge. This new entrant would rely on efficiency, expertise, and ownership of the entire lifecycle of how a watch winds up on a wrist. Consumers deserve something disruptive that offers novel mechanical movements wrapped in beautiful watches at affordable prices.
Maybe this is impossible, but that hasn’t stopped the entrepreneurial spirit in the past. Perhaps we will see this come out of the Swatch Group or maybe this will be something new. Regardless of who creates this venture, I’m confident that it is coming. There is no doubt that it is a great time to be a lover of watches.
