Anyone that has ever logged into Instagram has probably encountered at least one picture featuring a minimalist watch with a NATO strap and trademark ‘DW’ on the dial.
In the six years after its inception in 2011, the relatively young Swedish watch brand Daniel Wellington (DW) has successfully become one of the world’s best-selling watch brands under the $200 price range.
DW was inspired when the founder Filip Tysander met a British man with “impeccable yet unpretentious style” during his travels in Australia. Tysander was inspired to create his own line of watches after seeing the man’s pairing of a vintage Rolex Submariner with an old, weathered NATO strap.
Within three years after its launch, DW sold one million watches worth $70 million and the company is now worth over $200 million.
It is also the fastest growing private company in Europe — recording 4,700% growth in revenue between 2013 and 2015.
What factor contributes to its massive success?
It is almost single-handedly owed to the company’s Instagram strategy.
Coming from the Gen Y millennial generation himself, Tysander knew personally the pain of finding an affordable minimalist watch as most companies charge a premium for the style.
“I thought there was also something missing in watch design, when it comes to watch that is slim, thin, and minimalistics, that you can wear together with a suit, that is not that expensive,” Tysander said about the opportunity he saw in the watch industry.
So how does one make an affordable stylish watch without looking cheap? On top of that, how does a brand create an identity that millennials want to be associated with?
The company picked a perfect time to start its business, a period right after the economy recovered from the 2008 financial crisis and profits in the watch industry jumped from $3.7 billion in 2009 to $5 billion in 2014.
Tysander also noticed a classic trend in fashion hadn’t yet made it to the watch world – the preppy style so he drew inspiration from Ralph Lauren to match his new NATO straps.
To keep price points relatively low, the company manufactures and assembles its parts in China but the brand maintains a certain level of quality by sourcing the time-keeping parts from Miyota, a Japanese supplier known for its good quality-to-cost ratio.
“Our watches are inspired by the upper echelons of the watch world but at a very accessible price point. It’s fair to say that we want everyone to be able to own a Daniel Wellington,” said Frans Sjo, DW’s business manager for the US.
Indeed, the brand has made it very easy for people to purchase a Daniel Wellington watch by partnering with over 6,000 retailers in 75 countries.
The company also sells its products online, offering free worldwide shipping and returns on not only its official website but also distributing its timepieces in Southeast Asia through popular marketplace Lazada.
Unlike other upscale brands that are bound by guidelines and can only sell their products in certain boutiques, DW partners with any retailer that will have them – department store, boutique, standalone, etc.
While its omni-present channel distribution is impressive, the company’s most notable strength is its marketing. The company refused to spend on traditional advertising and turns instead to social media to reach potential consumers.
In its early days, DW gave watches to key influencers on Instagram so they could show it off to their thousands of followers. But the company didn’t choose celebrity endorsers and started with the several smaller influencers to achieve the same “viral” effect at a cheaper cost.
DW has also curated a very stylish Instagram profile itself as a fashion brand and has successfully garnered 3.2 million followers. It also leverages user-generated content (UGC) to engage its customers and drive brand loyalty by featuring user posts with hashtag #DanielWellington.
Daniel Wellington has succeeded in lowering its product’s base cost, and consequently the retail price, while branding itself to be a stylish and desirable brand to a wide demographic.
Having excelled in an online channel strategy, DW is now looking to expand its offline footprint to further expand the business.
The company is planning to open 300 flagship stores worldwide within a year, ten times of what the company had at the beginning of 2017. At least 100 of them are planned to open in China.
To increase global recognition (and now that DW has the money), the brand has appointed Kendall Jenner to be its brand ambassador to launch its Classic Petite collection — the company’s first mesh band watch.
“If you go back to 2013, I had no idea the company had the potential to grow to its current size, but today it’s part of my everyday life. I’m incredibly fortunate,” said Tysander in an interview.
With $66 million profit all for himself? No doubt.