Daniel Wellington, a love (and successful) story between a watch brand and influencer marketing
After talking about travel
agencies and the wine industry, I decided to take a different approach. When I read that millennials value experiences over things, I couldn’t agree more (I am 28). This time, I want to talk about a brand that I don't particularly like but
I am impressed by how its digital business model has contributed to its
success.
Daniel Wellington, a watch
brand also called DW, is famous for the fact that it managed to put a watch on millennials’
wrists. The success story began in 2006 when Filip Tysander met a wanderer
named Daniel Wellington. He started to be obsessed with his watch and the
minimalist bracelet and named his business after his inspiration. It’s such a
nice story to tell that some people questioned its veracity.
But what is so special with this brand?
The product itself has nothing
striking, except an affordable price. Frans Sjo, business manager for the US, argued
that “It’s fair to say that we want everyone to be able to own a Daniel Wellington.”
And with a price range from $149 to $299, it’s clearly more affordable than a
Rolex.
So what made DW so successful?
If it’s not a unique design? Are there any very advanced tech features? No! The
origin of its success story takes its roots with the use of influencer
marketing. The brand quickly started to work with social media influencers who
associate their image to the brand by posting pictures. They also add a discount
code for their followers which ultimately drive traffic to DW web stores, and
it worked amazingly well!
Influencer marketing, a perfect, risk-free strategy?
However, the strategy to work
with influencers, which has been encouraged by the increase of ad-blockers and the decline intraditional media consumption, does not come without risk. With the rise
of fake users, quantity does not necessarily mean impact. And worse than no
impact, it’s bad publicity. Do you know Logan Paul? He is a YouTube
superstar that partnered with various brands before coming under
fire for publishing a highly controversial video. So brands should better choose
their partners carefully!
Regarding
the watch industry, traditionally brands have avoided using social media. DW
was smart enough to jump into this opportunity. Today, the brand has more than
4,5 million followers on Instagram! For
DW, the strategy has paid off. Nevertheless, marketers have to be careful with
influencers, as we have seen before. Another consideration that brands have to
think about is legislation. As a brand, if you partner with an influencer, he
must announce it properly in the post. DW should have been more careful. As explained by the Financial Time, the Advertising Standards
Authority in the UK has taken action against Louise Thompson for failing to
disclose that a seaside Instagram photo included product placement (the post now mentions the partnership).
Control or not control, that is the question
Furthermore, there are other limitations
regarding the use of influencers; brands do not have absolute control over their
campaigns. Yes, they may send pre-written captions, but the influencer may have
a particular style of writing, or may be careless.
But still, when you look at
the Instagram page of Daniel Wellington, you can only be impressed by the
quality of the pictures that the brand uses. And it’s interesting to notice
that most of the content are produced by the community, and not by the brand
itself. Not only DW can leverage the visual content and the storytelling that
the influencers share online, it can also avoid spending additional funds on
testing a new audience.
Am I ready to buy a Daniel Wellington?
I have always been amazed by
the power of word-of-mouth (92% of consumers believe recommendations from friends and family over all forms of advertising), however, if I know that my friend has been paid (or
receive something) in exchange of a recommendation, I will question the
sincerity of his opinion. Recently Dyson has started to collaborate with an
influencer that I follow, but when I see someone that looks super excited to
vacuum, I can only think about the financial transaction behind this picture.
Sorry Valentine, but the lack of authenticity on your smile can make you lose
some of your 70’000 followers.
The digital business model of
DW turned to be a success, I have to admit. It’s as simple as taking a picture
of myself with the product, modify it with an Instagram filter that makes me
glowing, and sharing it with my friends by adding a discount code that makes me
look so generous. Great.
Nevertheless, I believe that
the power of word-of-mouth lies in authenticity, which is at the opposite of
paid advertisement. Sorry DW, but it’s not because Kendall Jenner said that
it’s the perfect gift that I am going to buy one.
If you have an extra 6-minute,
have a look at this interview of Anand Narayanan, head of digital at Panasonic
UK, who talks about influencer marketing and the importance of
authenticity.
Hi Joanne,
ReplyDeleteWhat a brilliant eye-opening post! As a DW watch owner, I should also mention that it ruined the watch for me. Frankly speaking, I feel duped.
The supposedly romantic story about an English traveller who Filip Tysander met “by accident” on numerous occasions between Melbourne and Cairns seems very much fake and cheesy. What a coincidence that the traveller’s name was Daniel Wellington, but not Zhang Wei or Vladimir Drago. How convenient for marketing the watch in the UK (where it is most popular).
In retrospect, I am not even sure why I bought it. I guess, its affordable price attracted me, but it wasn’t the initial factor. Now I realise I did see it on Instagram (bright recognisable strap and nice minimalistic face distinguish it from competitors) but my brain didn’t register it until I started browsing shops looking for a watch.
I should say, as disappointed I am with the fake nature of its marketing, the company chose a very effective strategy. Making Instagram influencers advertise something in exchange for JUST A PRODUCT was a genius move.
I read about it here: https://kingkong.com.au/how-daniel-wellington-built-a-228-million-global-fashion-empire-with-a-tiny-30k-investment-detailed-case-study/
What is the production cost of a Daniel Wellington watch really? Let’s see.
According to this blogger (https://horahalus.com/2016/04/20/how-did-daniel-wellington-get-so-popular-and-why-i-will-never-buy-one/) who managed to dissect the components of the most popular DW Glasgow 40 mm watch, the production cost must be really low for the following reasons:
• Quartz battery powered hence requiring the occasional battery change.
• Uses a Japanese movement – Miyota 1L22 which costs about 10 dollars.
• Watches are assembled and made in China.
• Straps are made in China.
(Sells for $199 on the official website).
Nowadays a micro-influencer (10 000 to 50 000 followers) would charge a few thousand dollars per post, never for a $25-worth watch (Lieber, 2018). Great timing!
I absolutely agree with you that the lack of authenticity in social media advertising makes you feel manipulated and ultimately negatively affect the product perception. I am glad that Advertising Standards Authority are enforcing their standards and even take legal action towards the covert marketing like this.
Do you think social media (influencer) advertising has reached its peak or it will flourish further regardless of the tightening social media advertising laws?
In my opinion, Instagram’s own policies would be more effective to fight covert advertising, because influencers treasure their money-making platform immensely. Are there any more effective measures you can think of?
Take care,
Julia
References:
Suby S (August, 2017), How Daniel Wellington Built a $228 Million Global Fashion Empire with a Tiny $30K Investment [Detailed Case Study], King Kong, Available at: https://kingkong.com.au/how-daniel-wellington-built-a-228-million-global-fashion-empire-with-a-tiny-30k-investment-detailed-case-study/
Kevin G (April, 2016), How Did Daniel Wellington Get So Popular And Why I Will Never Buy One, Hora Halus, Available at: https://horahalus.com/2016/04/20/how-did-daniel-wellington-get-so-popular-and-why-i-will-never-buy-one/
Lieber, Ch (November, 2018), How and Why do Influencers Make so Much Money? The Head of an Influencer Agency Explains”, Vox, Available at: https://www.vox.com/the-goods/2018/11/28/18116875/influencer-marketing-social-media-engagement-instagram-youtube
Hi Julia,
ReplyDeleteThank you for sharing your opinion.
I read the article from Suby you mentioned and started to smile with this sentence:
"This put his product right in front of people’s eyes. The watches were everywhere, and very accessible. Even better, this wasn’t considered advertising."
This is so true! I am so overwhelmed with advertising that I would prefer trusting the opinion of someone that I know than a random TV commercial that promises me a Colgate smile.
I am sorry to read that my post ruined the watch for you, but as you said, the strategy was very effective.
For the future, I think that we will see similar regulations than the ones for traditional advertising. Influencers will have to mention more clearly if it's a paid partnership, but also if the picture has been modified (use of filters, Photoshop, etc.)
Thanks again for your input,
Joanne