Baselworld needs a reboot. The current coronavirus crisis is an opportunity to do just that, but the management needs to act fast.
When Michel Loris-Melikoff took over the exhibition in the summer of 2018, it was the ultimate hospital pass. Swatch Group had just announced it was withdrawing from the 2019 event, and its chief executive Nick Hayek said the show was doomed if it did not fundamentally change. “I invited the [Baselworld] executives and told them they have a big opportunity to change. The Swiss watch industry is booming so now is the time to make changes. All of the Swiss watch industry is ready to help, not just Swatch Group. But you must open up. You must do something now,” he urged in an interview with MSNBC that year.
Unlike the previous management under Sylvie Ritter, Mr Loris-Melikoff was ready to listen, but he conceded to WatchPro in an interview at the end of 2018 that changes would be only incremental for the 2019 show because such a massive juggernaut could not be turned around in a single year.
True to his word, the big announcements came at the 2019 show: Baselworld would be aligned with SIHH (now renamed Watches & Wonders Geneva) so that they run back to back from the end of April into the beginning of May. There would also be a new prefab ‘village’ in the heart of the show that would make it easier and cheaper for brands to exhibit without building their own mega structures.
The village concept is a good one, but take-up has been low. Aligning the two major Swiss watch shows at the end of April has been a disaster. Breitling immediately withdrew from 2020. LVMH launched its own event in Dubai last month and looks almost certain to pull out of Baselworld from 2021 if things don’t change. Both said the new timing was terrible. Japanese giants Seiko, Grand Seiko and Casio have also pulled out, citing the schedule as the problem.
This year’s exhibition is not doomed, because Rolex (plus Tudor) is still using the event to meet with its global network of retailers, present the 2020 collections and give their allocations. Patek Philippe is doing the same, which means the crème de la crème of luxury retailers still need to attend.
But neither Rolex nor Patek need Baselworld to do that. They could hold much smaller, cheaper and — arguably — more enjoyable events around the world. Their support for Baselworld is effectively subsidising every other brand that exhibits; not financially, but by making their presentations immeasurably more effective because they will be in front of the premier retailers they would not on their own be able to attract.
Baselworld is incredibly precarious and dependent on this largess from Rolex. That largess may go on forever, or it may not. If I were in the shoes of Mr Loris-Melikoff, I would not gamble on it continuing and would look at ways to claw back the initiative.
Which is where the reboot comes in, and why I argue that Baselworld should announce immediately that the 2020 event is cancelled and will return in 2021 with a completely new concept. If the threat of coronavirus is enough to make Swatch Group cancel its Time to Move event in March, it is enough for Baselworld to do the same. If the coronavirus crisis blows over in the next month, it will be too late.
2021 will need to be the start of a completely new event. Rather than running Baselworld and W&W back to back over a two week period, there should be only one event with Swatch Group, Richemont, LVMH, Rolex, Patek Philippe and Audemars Piguet all in one place for an event lasting no more than a week. It should be a pure watch show. Jewellery, gems and equipment need their own events.
The event should be luxurious and enjoyable to attend; closer in format to the most recent SIHH shows where retailers and press are hosted (travel and hospitality paid by the brands). Cost should be a fraction of what Baselworld used to require because there need to be additional events around the world.
I know brands want to use major events to reach out directly to consumers. I see that as impossible. Customer events should be in the countries of the customers and run by local teams, ideally in conjunction with retail partners so that people can actually buy the watches they see.
Can any one organiser bring the entire industry back together in this way? Who knows. What I do believe is that Baselworld cannot be fixed on the fly. It has to pause, reset, and use the breathing room to bring everybody back around the table to agree a plan for 2021.
The show must go on
Most people agree that 2020 is not the year of the watch industry trade show. A storm of factors including a poor economy, international trade conflict, global health threats, low investor confidence, and a lack of industry strategy have coalesced into a mood which has prompted some people to believe watch trade shows should be canceled, or even killed off altogether.
These sentiments are misguided, argues aBlogtoWatch founder Ariel Adams, and can be directly attributed not to wise evaluations of the future of the watch industry, but rather to plain reactionary cost-cutting measures.
The watch industry is complaining about spending money because it hasn’t been earning as much as its shareholders would like lately. Ironically, the big groups all posted sales increases in 2019, and nobody thinks sales for private companies like Rolex, Audemars Piguet and Patek Philippe contracted last year.
Which can be difficult to believe given their low appetite for most forms of marketing spending.
Much is written about why trade shows are in trouble, but little is said about their benefits, which are myriad. Watch brands in 2020 and beyond need to focus on the information sharing and networking value of attending trade shows — learning from other brands, listening to retailers and encouraging the press to speak their minds without fear or favour.
The heart of the “Baselworld problem” might have little to do with the cost of exhibiting or having to travel to a rather inhospitable convention city. It probably has more to do with the rift between traditional watch makers, and the traditional places which have sold them. “Distribution” is the big problem that almost all watch brands are trying to fix these days. There are few cookie cutter solutions. Risk and experimentation is key – a troubling scenario for a traditionally conservative and risk-intolerant culture.
If there are disputes, disagreements or simply uncertainty, parties need to come together and speak on neutral terms. Just ask the United Nations in Geneva, or pretty much any other part of “diplomatic” Switzerland about how to solve complex, inter-body conflicts. Each side both believes they are correct and neither side wants to admit wrong doing.
Giving all parties an equal seat at the table is the first step in dispute resolution. Yet the Swiss watch industry does not seem to abide by its nation’s ideals in this department.
If Baselworld is a place for watch brands and retailers (as well as media) to meet and date, and those dates aren’t going so well, why blame the venue? This is exactly what is happening with Baselworld and other watch tradeshows. They are being blamed for not fixing larger issues in the watch industry; and rather than being seen as a potential part of the solution, they are mis-identified as an enemy.
Baselworld and other watch trade show have already gone to great lengths to transform their platforms into better opportunities for networking and information sharing. But it won’t be worth anything unless watch brands and retailers make use of them.
Exhibitors and attendees should pay attention to the panel discussions. Send their top people to networking events. Learn about the ways small and start-up brands are making surprising profits when many of the big guys are still struggling to evaluate market needs.
Baselworld isn’t the problem, the problem is the tradition of watch brands hiding in their booths. Executives need to get out and mingle while also not being afraid to examine the wares presented by another CEO. Perhaps what needs to be retired isn’t watch trade shows, but rather the brand fortresses that once dominated trade shows experiences. Hey, that would be one way to keep costs down.