Plastic Mickey Mouse watches are re-selling for over 1000 dollars on eBay
Powerful business lessons from a humble plastic Swatch
90 years ago, on the 18th November 1928, Mickey Mouse was born. Created by Walt Disney and Ub Iwerks, Mickey changed our world forever.
Happy Birthday, dear Mickey Mouse!
To celebrate Mickey’s birthday, Swatch partnered up with the renowned English artist Damien Hirst to create not one, but two special edition watches. Both watches are based on a canvas painting titled “Mickey”, which was painted in 2012. It was a result of an invitation from Disney to Hirst to create an artwork inspired by Mickey Mouse.
One watch is called “Mirror Spot Mickey” and is limited to 19,999 pieces worldwide.
The rarer one, named “Spot Mickey”, is limited to 1999 pieces. It was sold on Mickey’s birthday, the 18th of November. The list price was $185.
The watches caught my attention as soon as I saw them popping up on a bunch of websites that usually do not talk about plastic watches. They were on Forbes, the business magazine and Hodinkee, a go-to publication for wristwatch geeks that frequently feature high-end mechanical watches.
I wanted the Spot Mickey, as a fun and silly watch for the weekend. I was thinking that life is serious enough, why not just rock a Mickey Mouse watch?
I went online to the Swatch website as soon as they took orders for the Spot Mickey. I added the watch to my shopping cart. When proceeding to the checkout screen, the screen showed me an error message that the website was down.
I gave it another try. The same annoying message was shown on the screen.
The servers were overloaded! Thousands of other people were in a clicking frenzy to get their hands on that limited edition release.
After a series of frantic nail-biting attempts, I managed to get to the payment screen. The site crashed yet again. I had an email confirmation but I had no idea if I managed to get the watch. Within minutes, the item was marked as sold out and I couldn’t try again.
I knew it would be popular, but I had no idea it to what extent.
The next day, I read on a discussion thread that the Mickey Spot was listed for 2000 USD on eBay. I let out a belly laugh. Funny joke, I thought.
Curious, I checked eBay. I stopped laughing.
The Mickey Spot watches were exchanging hands for prices north of 600 bucks. Some sellers were asking for more than 2000 bucks. It was insane that plastic Mickey Mouse watches that sold less than 200 bucks a few hours earlier were now going for 3 to 10 times the price.
Prices are determined by supply and demand. The eBay prices were as high as they were because of the elevated demand and limited supply.
I started to think about the whole situation from a business perspective. There are so many business lessons we can learn from this perfect storm of product design and marketing.
Play to emotions, not logic
The watch industry is an emotion-based industry. There is no logical reason to pay for a $185 plastic quartz watch and it is certainly less logical to fork out over 1000 bucks for the same watch on eBay.
A Portuguese-American scientist, Antonio Damasio, studied a patient “Elliot” in the 1908s. Elliot had brain damage due to a tumor and subsequent surgery. Due to frontal lobe damage, he was no longer able to feel any emotions. Elliot was able to think rationally and still tested for high IQ but had no ability to make any decisions. Damasio found out that Elliots’s lack of ability to feel emotions impeded him from making decisions.
It was scientific proof that emotions drive our decisions. Multiple other research studies continue to support this correlation.
The Spot Mickey watches appeal to the customers’ emotions for a couple of reasons, mainly:
- its Mickey Mouse, not some random unknown rat
- it commemorates a special occasion, Mickey’s birthday
- collaboration with top artist Damien Hirst
- a limited number of units available, just 1999 units
The limited production number triggers the scarcity mentality in the fans. If it is rare, it must be special. Many other people want it, so do I!
When making product design and marketing decisions, we have to keep in mind that customers are emotional beings. Even if customers make seemingly irrational decisions, they will find ways to rationalize them. Products that are logically superior on paper but do not appeal to the emotional side won’t make it far.
The Mickey Mouse watches target a niche category of consumers. There are definitely a lot of people who do not care for the watch. But as long as there are enough people who want them, they will sell.
Swatch belongs to the Swatch Group, which owns many watch-making brands that are purposefully placed in a hierarchy of luxury. The Swatch Group is a master of niching down. There are definitely overlaps in customer target groups. But generally, each of those Swatch Group brands targets a very specific market bracket.
Brequet is one of Swatch Group’s brands. An ultra-luxury Brequet mechanical watch can easily cost 6 figures. Swatch’s, on the other hand, targets the crowd that loves the playful aesthetics and prices of a fun watch.
The Mickey watches do not try to impress customers gunning for diamond-encrusted rose gold mechanical watches or tech-savvy consumers who are after the latest smartwatches. It also does not even try to please the whole spectrum of Swatch fans. Some Swatch fans who prefer more subdued and less funky watches are not the target group of these watches.
In business, it is like in personal life, if we aim to please everyone, we will please no one. When placing our product in the market, it makes sense to send a clear and loud message who we are selling to.
Milk your reputation
Swatch could get Damien Hirst to collaborate with them because they are Swatch. Hirst probably wouldn't have said yes if he was asked by some obscure watch startup company doing their first Kickstarter campaign.
Disney sought out Damien Hirst to draw Mickey because he is arguably one of the most famous living British artists of our time. Disney did not contract the Mickey artwork to some unknown starving artist who works as a hipster barista by day.
Fans were in a frenzy because the watches are branded with Swatch, Mickey Mouse and Damien Hirst. One influential brand name does wonders, but when you stack multiple brands, you hit a jackpot.
Branding works because it is a shortcut our brains can take. We associate certain images, emotions, and qualities to a brand. When we buy a product from a known brand, we know what we are getting, or at least we think so.
Swatch built the brand using consistent product portfolio and marketing. Swatch watches are very different, yet they are similar in their design DNA. Their advertisement campaigns might have evolved because of the advancements in electronic media, but the core message stays the same. The harder part to emulate is to be big enough to attract other famous names for collaboration to a achieve the brand-stacking effect.
The product does not have to be the “next big thing”
Many wannabe entrepreneurs aka. wantrapreneurs are chasing after the next big life-changing idea. They want to be the next Elon Musk or Steve Jobs.
It is a noble undertaking to aim for an idea that will revolutionize the world and be billionaires as a result of it. Yet, plenty of money can be made from ideas that appear mundane at first sight.
In the 1980s the Swiss watch industry faced an existential crisis because of the market was flooded by quartz watches from Japan. The quartz watches were cheaper to produce, more accurate and required no maintenance compared to their mechanical Swiss counterparts.
A management consultant, Nicolas Hayek, had the simple idea of producing more affordable and playful plastic quartz watches in Switzerland. At that time, mechanical watches typically had over 100 parts, Swatch simplified the watch to 51 components. With this strategy, the Swiss watch industry managed to regain part of the market share of lower-cost watches that they lost to Japanese companies.
Hayek played a major role in various mergers and acquisitions that made Swatch Group the giant it is today. Hayek consequently became the CEO of Swatch Group.
Swatch watches today, including the Spot Mickey, is based on the same archetype as the first Swatch watches. Technologically, they are nothing to shout about today. Yet, they still maintain a certain level of desirability amongst fans and continue to be profitable to Swatch.
The lesson here is that we can be very successful in business even if we focus on simplification. Ingenuity can be applied to the seemingly simplest of things, even plastic watches.
Just like any other discipline, there are diverse ways to learn about business. We can read. We can try things out and learn from our mistakes. Or we can emulate what we observe.
By the way, I just received my Mickey Dot watch in the mail a few days ago. Should I wear this rare piece? Or flip it for a few hundred bucks profit?