Saturday 26 March 2022 will, without a doubt, be a day to remember in the world of watch collecting. Seeing the queues forming outside Swatch stores all over the world makes you wish Sacha Baron Cohen or Michael Moore (@tamer_lens lol!) would produce a comedy about it someday. Anyway, this post is a discussion around the psychology behind the MoonSwatch release madness.
How crazy was it on the day?
At this point there have been hundreds of videos shared on Instagram – here’s one in London shared by Mohamed Muraj.
Swatch had initially set the limit to 2 per customer, and at midnight on the release day, they adjusted the number down to 1 per customer, having seen the queues forming overnight outside all their stores. On the day of the leaked images (3 days prior), I said they ought to be preparing security and crowd control, but it appears they didn’t bother.
Several stores around the world opted to shut their doors shortly after opening, stating “safety concerns”, and other stores ran out of stock within an hour or two.
In short, it was bonkers. If you’re reading this you already knew that, but the problem with these posts is they kinda need to make sense when reading them afterwards too, so forgive me for sounding like captain obvious.
Some brief context
The first thing to point out about this launch, is that we can draw parallels with Furlan Marri releases which I have written about here , here and here. Worth checking those posts out first, then come back 🙂
I’m no economist, nor am I a psychologist… so take all this with a pinch of salt. To try and analyse this, allow me to go on a tangent…
Qiaochu is a graduate student in pure mathematics, so this seems like a bizarre thing for an obviously smart person to write. Now it is obvious that Qiaochu had solved problems up to that point in his life, even if it was simple problems like “my tea is hot” with solutions like “maybe I should wait a while before drinking it”. That said, it makes sense that he was, until that point, lacking some basic level of introspection or systematic approach to how he solved more complex problems.
We all inherently know that many people lack the ability to systematically think about and solve problems in their life, and these people typically tend to benefit from talking to others who can help them solve these problems… that person could be a therapist, a partner or friend etc.
We also know, that many people seek external reassurance. While this is a blog that is usually about watches, we know of many examples outside the hobby too. Think about the impact of Kate Middleton wearing some piece of (cheap) clothing – once spotted, these things immediately sell out, because of the ‘validation’ that comes with a person like her ‘approving of it’. Same goes for hypochondriacs, who go to the doctor to be told that their latest ailment isn’t worth worrying about. They’re just happy to hear the words from the doctor… and in the same way that you can’t tickle yourself, some people can’t reassure themselves!
The bottom line here is that there is always going to be a wide variation in the inner workings of people’s minds and thought processes – often outcomes that transcend basic intelligence.
Back to the MoonSwatch, why such demand?
“I think the people from Geneva, they start the Watches and Wonders,” he adds. “But for once they have watches and we have the wonders.”Quote by Nicholas Hayek via GQ
Hayek wasn’t kidding, was he!? As far as ‘iconic watches’ go, the Omega Speedmaster is up there with the Rolex Daytona, as one of the most iconic watches of our time. Mileage varies when discussing what exactly they stand for or signify about the wearer, but there’s no doubt they are iconic. At the time of writing, the old Omega moon watch is out of stock at a retail price of £4170, and the newer one is £5420. The new MoonSwatch, however, is merely £207… that is, to be clear, 96% cheaper.
With that in mind, I propose there are three key sources of demand for the MoonSwatch
- Aspirational owners
- Watch collectors (Thanks Dan @tony.crouton for your input on this one!)
This MoonSwatch is a close copy of a £5k watch, but unlike the Furlan Marri which simply was a gratuitous design rip-off, this release has been created with the blessing of the brand’s owner, and even co-branded to reflect this… heck, it says “Omega” above “Swatch” on the dial, and has an Omega logo in the very same place you would find it on an Omega watch… except it’s 200 bucks and it’s a Swatch. It isn’t pretending to be something it’s not – the colours make sure of that.
So imagine you’re someone who always wanted a ‘nice watch’ – by ‘nice’, I mean expensive, and out of reach… suddenly you have an opportunity to own something which is nearly the same as a nice watch, branded as a nice watch, and costs only 4% of the price of a nice watch.
As my friend Thomas so eloquently put it:
“For a lot of people, this might be like a democratised AkriviA would be to high end collectors, and I would camp out a week for that.”@watchadmiral
Luxury watch enthusiasts tend to live in a bizarre bubble, where huge sums of money are normalised, often trivialised! I once made a post about this on Instagram here, where I spoke about how collectors can somehow ‘find’ huge sums of money when they get a call for a nice watch allocation… and yet, they penny-pinch in other areas of life such as furniture shopping or even supermarket choices. For the vast majority of non-collectors who aren’t on Instagram, and are not ‘thinking and breathing watches’ at all hours of the day… the idea of getting (loosely speaking) a £5k watch for £207 is actually a big deal!
Now I am not suggesting that people who had their heart set on a special watch like a Speedmaster will suddenly decide this is an equivalent watch, but at a 96% discount… this isn’t the case at all. Often, the fact that something costs a lot, is what makes it seem worthwhile to people, and speaks to the status value of watches which I wrote about here. However, for those who always saw this type of watch (iconic, but expensive) as being entirely out of reach, this is a pretty good deal!
I suppose there’s a small subset here of people who would count as ‘foot traffic’ for an average Swatch store… they neither collect watches, nor Swatches – but walking by the store, they might see it and think “oh, that’s nice” – I don’t think this group contributes much to the demand we are seeing on launch day, but for completeness let’s just acknowledge them here anyway.
This is arguably the largest source of all the demand we are seeing right now. In the watch collecting world alone, ‘flippers’ constantly provoke the ire of watch collectors… because they manage to secure access to desirable watches, and resell these pieces for significant profit… while these collectors can’t seem to get the same watches at all. Shame, lol!
Outside of watches too… basic arbitrage is not a new thing, and scores of people make a decent living doing just that. From sneakers to apparel, the likes of Supreme and similar companies have thrived off the hype culture. The key characteristic in many of those other genres, is relatively low cost of entry, for large % returns on the initial outlay. In the case of this MoonSwatch, I am aware of a few completed transactions for around £750-1000… so even in the worst case, people can make at least 200% returns, which is even better than returns on certain sneakers (which the same people are happy to sell). The point being, if folks are happy to make £50-100 on sneaker arbitrage, then this MoonSwatch is an attractive opportunity – and sure, it might not be a limited edition, but they know how the market works – at the time of launch, there is a supply drought, until the supply chain catches up and pent-up demand is met. These profiteers know very well that there will always be someone who doesn’t want to wait, and will pay a premium.
There are some who have argued with me, that this makes no sense; To wait overnight, or for several hours for a chance to make £500 (assuming they get one piece, and resell for £750 ish) seems a bit daft. The thing is, everyone values their time differently, and some might see the queueing experience differently too. For some, queuing for hype merchandise is often a social event, where they can hang out with friends, possibly overnight, have a lot of fun waiting together, and come out on the other side with a tidy profit. I refer back to the context I shared above… everyone’s minds and thought processes vary, and just because you think something is absurd, doesn’t make it so.
I guess this is where I fit in. I like the MoonSwatch, and I hope to get two – one for each of my children. Just like I argued in the case of Furlan Marri – I have nicer watches, and I don’t really foresee a situation where I would choose to wear a cheap lookalike when I can wear the real thing, or something even nicer. However, for my kids – this is a hugely appealing release. I can get them into watches, I can have them wearing a ‘Speedmaster’ to match my own mechanical version, and not need to worry about the value. I can build some sort of connection for them with the brand, and potentially get them excited enough to want a mechanical one too. It also comes in fun colours, increasing the appeal even more. What’s not to like?
Other watch collectors who have not owned a Speedmaster can get this as a cheap way in to experiencing the design, if not the brand itself… maybe they never saw the appeal of the Omega Speedmaster, because they always preferred other watches around that price point – but now, they get to have a taste of the Speedmaster, for the cost of an alligator watch strap. Again, why wouldn’t they? Even if they don’t wear it much, they’re able to participate in #speedytuesday which almost justifies the spend all on its own, right? 🙂
We should also add Swatch fans here too… a subset of watch collectors, but not the kind which fit into the aforementioned category of ‘luxury watch collectors’ – they love Swatch, and are happy to collect hundreds/thousands of them, but never got into the luxury side of watches. This is like a 2-in-1 deal for them – it is another, unprecedented, Swatch release, and they’ve been buying all the other special editions – plus it is associated with a luxury brand – so naturally, they want this one too.
Not sure what is left to say, other than this was a win for the Swatch group. It is possible that people wearing this will get a taste for Speedmasters and aspire to own the Omega version eventually, but even if that doesn’t happen, this is an unprecedented rejuvenation for the Swatch brand either way.
The insane frenzy will, I believe, die down eventually – this is because Swatch specialises in mass-production. Demand can easily be met in due course… we aren’t dealing with some haute horology situation where there are limited watchmakers resulting in limited production – so if you wanted one, you’ll eventually get one.
Insofar as people feeling the need to have one earlier than others, or to make a quick buck… I will say this… I personally see no value in queuing for a MoonSwatch, but that’s because I have better things to do with my time… however, on reflection, I realise I am in no position to comment on other peoples’ use of their time, and so I say: live and let live! May all the new MoonSwatch owners enjoy them in good health, and to Mr. Hayek, chapeau sir!