00:01Roman Pabluchenko is Assistant Professor of Marketing at the University of Bath.
00:06Roman, thank you for joining us on the program.
00:08So is this just a masterpiece in marketing or is there more to it?
00:13Thank you for having me. So I would strongly agree with that.
00:16I think it is a masterpiece in marketing for two reasons, primarily for Swatch, right?
00:21So the first reason is just sales, right?
00:24So on a normal day, this is how many watches they sell.
00:27And then on a drop day, and this is the third drop, not just the first one, this is how
00:31much they sell, right?
00:32And sometimes people buy more than one, they go to different stores, and sometimes people also buy other things in
00:38the store, right?
00:38So in terms of sales, there's definitely a boost, and it's very consistent with other drops we have seen.
00:43And the second benefit is more long-term.
00:45So basically, drops like this, they generate incredible press, right?
00:50The whole world is talking about it. We're talking about it right now.
00:53So this is kind of authentic, free, and original press that you cannot buy and you cannot fake.
00:58So it's just marketing goals for Swatch in many different ways.
01:02So we're seeing success with Swatch, success with Libubu.
01:06What's the psychology behind why this drop culture is so effective with consumers?
01:13So I would say there's two elements to this because there's two groups of consumers, right?
01:17So the first group, you can call them fashionable consumers, right?
01:20They want to own something that nobody else does.
01:23They want to own something unique, something singular, something not available to the rest of the world.
01:28And this is why they're priding up the stores on release day to essentially get their hands on the thing
01:33first.
01:33And then they can talk about it on social media.
01:35They can talk about it with their friends and colleagues.
01:38So for a little while, they basically amplify their social status, right?
01:42But I think a more interesting development is the fact that a lot of people buy these things to then
01:48resell them, as you said.
01:49So, for instance, the Swatch AP collab, it dropped for £300-ish.
01:55And then during the first week, it resold for over £3,000.
01:58So we're looking at 10x returns, right?
02:01If you take any stock, if you take any crypto, any financial asset out there,
02:05you will never get the same kind of return as you would get in these situations.
02:09This is a luxury brand collaborating with a mainstream one.
02:13We're seeing what Swatch gets out of this.
02:14What does AP get out of this?
02:16I think it's actually very clever for AP.
02:19To me, it reminds me of what luxury car makers do with video games.
02:23So basically, they license their cars to video games like Gran Turismo or Forza Motorsport
02:28because it's basically amplifying their advertising.
02:31Traditionally, these are very kind of insider brands, right?
02:34So AP is an iconic watchmaker.
02:35But it's mostly known to luxury insiders.
02:38Now the whole world knows about AP, right?
02:41So it's a symbol of aspiration.
02:44It's a symbol of status, which now millions of people desire.
02:47And for £335, they can get a piece of that.
02:51So what's the long-term effectiveness of strategies like that?
02:54We know that drop culture has an immediate effect.
02:57But what about long-term?
02:58So I would say the first one is just free press and something we call halo effect in marketing.
03:04So basically, you now have a reputation for selling something unique.
03:08You have a reputation for selling something that people are willing to quite literally die for on release day, right?
03:15So that basically amplifies your reputation among consumers.
03:19And also, it's something we call top of mind.
03:21So basically, because it's all over the place now, the news about the Swatch AP collab, basically the next time
03:27you want to buy a watch, you will strongly consider buying it from a Swatch because this is in the
03:32top of your mind now because of all the press, right?
03:34So this is more of a long-term effect.
03:38Roman Pavlyuchenko, thank you, Roman Pavlyuchenko.
03:40Assistant Professor of Marketing at the University of Bath.
03:44Anna, we'll wait and see what the next big drop culture hype will be, Julia.
03:48I think we need to get in the queue.
03:50Definitely.
03:51We really do.
03:51I know.
Comments