Swarovski is currently facing a large number of challenges, both internal and external. The company was harshly affected by the SARS-CoV2 Pandemic which resulted in the closure of its most physical boutiques worldwide as well as in a reduction in sales (Bloomberg, 2020). With a 33% decrease in revenue to less than EUR 2 million, 6,000 job cuts and possible reduction of control by the family in 2020, Swarovski has experienced a massive shock in its history (Bloomberg, 2020). Reduced revenues suggest a subsequent decrease in the company’s tangible resources and hence fewer funds to sponsor innovation. This is a particular concern in the company’s UK subsidiary where despite a 7% decrease revenue, there was a 60% increase in costs of sales (FAME, 2021).

Another problem is the discords in the management circle. Swarovski’s CEO Robert Buchbauer has faced opposition from other family members, who are comfortable with the pre-established sales of bijouterie, after announcing his new strategy for the family business (Bloomberg, 2020). Due to Swarovski’s orientation on  «the cut-throat segment of mass-market», «its thin margins and fleeting customer loyalty» are the factors which are pushing Buchbauer to differentiate products and enter the high-end markets (Bloomberg, 2020). He argues that «Swarovski crystals on a 10-euro T-shirt don’t add to our profitability and hurt our brand image» especially when there are loads of decent quality substitutes available from China and Egypt (Bloomberg, 2020). This is also a threat to Swarovski revenues as, according to the most recent market research, customers purchasing bijouterie as an addition to luxury accessories do not particularly stick to a certain brand (Bloomberg, 2020).

Moreover, there is a common disbelief that Swarovski will become a successful luxury brand. With these in mind, implementation of advanced digital innovation can be problematic due to the unknown target markets.

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The major challenge for Swarovski is, however, an erst failure of adopting some digital initiatives in the last decade. In 2010s, the business scrapped a software which turned out to be of limited use. Moreover, the company launched a temporary AR try-on tool, however it was discontinued for unknown reasons (Marketing Dive, 2017). Thus, it might take Swarovski longer periods of time to assess, test and implement new technology to avoid the repetition of earlier misfortunes therewith.