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Swatch Is Opening a Drive Through Because Why Not

At Swatch’s annual general meeting a couple weeks back, Swatch Group CEO Nick Hayek teased that the company would be opening a drive-through store for its namesake Swatch products in the next few weeks. The shop will be located next to the company’s headquarters in Biel, Switzerland, a town of about 55,000. It’ll be just across the street from the Omega Museum and nearby Omega boutique, surely serving mainly as a tourist attraction.

Recently, we covered Richemont’s evolving online strategy (it purchased Watchfinder and Net-a-Porter last year), and how that’s been impacting its watch sales. Swatch is also trying to figure out an online strategy still, though it’s pretty easy to buy a sub-$200 Swatch brand watch nowadays, and even more expensive Tissot, Omega, and Longines watches can be purchased directly on the brand websites.

This little drive-through experiment seems to indicate that Swatch still sees brick-and-mortar shops as a key part of its future, an assessment I agree with. In fact, Richemont reported in its earnings that it saw solid bricks-and-mortar retail growth, with a net positive number of stores opening. Interestingly, Richemont seemed to emphasize the growth of its directly-owned stores (as opposed to franchise stores). I’d bet Swatch’s strategy is similar. No matter if it’s selling online or in bricks-and-mortar shops, cutting out the middleman is the name of the game today.

“Innovating in distribution is important, to look for consumers,” Hayek said. “Nobody else in the world dared to do this.” Okay, bold words from a guy who did little more than take an idea that coffee and fast food chains have been using for decades. But the entry-level Swatch brand has always served as a source of innovation and experimentation for the broader Swatch Group, so let’s see where this goes before passing too much judgment.

There seem to be two countervailing arguments here: modern consumers want “experiential retail” — think Restoration Hardware, Bonobos Guideshops, or so many other modern retail strategies. At the same time, there’s a belief that the watch “boutique experience” — going to a high-end watch boutique and talking watches with a sales person while sipping a Nespresso, Pellegrino, or something harder — is dying. But what is the boutique experience but old-fashioned experiential retail? Sure, it needs to be revamped, but what turns me off about the boutique experience isn’t the experience itself, but the premium you pay for a new watch (that car loses 20% of its value as soon as you drive it off the lot!). That, and the fact that the watches that don’t lose value — cough stainless steel Rolex cough — are nowhere to be found at any of these boutiques. And by the way, if you’re a consumer into vintage, how many high-end boutiques are offering a consumer-friendly experience for those looking to buy a vintage piece?

So Swatch Group is using its funky Swatch brand to pilot a funky little experiment. I hope it leads to more experimenting with fun bricks-and-mortar strategies, because the watch industry doesn’t have enough of them right now.