For this week’s Stupid Business Decisions Case Study, we look at the watch maker Swatch and their botched attempt to make themselves seem more high-end than they really are. The only thing they DID succeed in was creating a black market for their own products.
At first, it seemed like a cool idea — Swatch decided to partner up with a legit high-end watchmaker, Omega, producing a collaboration called MoonSwatch. In theory, you get the look of an Omega, but for a fraction of the price. The $260 USD selling point is quite a step up for Swatch, who’s previous best sellers were typically in the $50-100 range. (Of course, compared to $6,000 or more for a real Omega, it’s a bargain.)
Swatch did a great job creating “buzz” on social media. Demand for these new watches was already quite high by the time they launched. Crazy long lines formed outside the Swatch stores which had been selected to carry the new series.
Demand was so great, in fact, that Swatch couldn’t fill their shelves fast enough. As a business, that’s a great problem to have. Unfortunately, Swatch decided to handle the intense demand in the worst way possible. They practically asked for a black market to be created. How, you ask? First, let’s look at this notice Swatch posted on their own website: Continue reading “Creating a Black Market for Your Own Company’s Products (or How NOT to Create Artificial Demand)”