The relevance of Baselworld under question
- Alexandra Garrett
- May 7, 2018
- 5 min read
The world-famous show was once the place to be but now many brands choose not to attend in favour of other shows or private events.
Baselworld 2018
As Baselworld 2018 came to an end, more and more concerns about the trade show began to emerge and over a month on, the conversation about the future of Baselworld and tradeshows in general is not dying down. Brands questioned the format and the relevance of the show in the current marketplace, as an estimated 850 exhibitors left Baselworld in the last two years, with the biggest drop in numbers seen this year, when 650 out of 1300 did not return. Now, in what Bloomberg termed as the trade show 'fighting for its life', the future of Baselworld is uncertain.
Where did it go wrong?
The decline of Baselworld can be related to a number of factors. Firstly, the costs. They are what some describe as 'painfully high' and cannot be justified. The costs relate not solely to the high prices of the booths (which, of course, is a significant proportion of the budget) but the personnel, travel, accommodation and hospitality expenses. These high prices are equally as problematic for both super-brands and small luxury watch and fine jewellery brands. This is not because super-brands cannot afford it, but because this money can be spent more effectively. The Movado Group, for example, spent 10 million USD on participating in Baselworld 2017 but this year chose a new approach and went to Davos with its distributors instead, spending 2 million USD.
Secondly, over the years we have seen an increasing loss of relevance of the format of the show. The impact of digital and an increase in interconnectedness though technology, new promotional strategies and continuous dialogue with the world via social media, means that brands are now only a click away. Most importantly, they no longer rely on trade shows for sales. It has moved from being a sales show, to being a promotional exercise.
Thirdly, a lack of flexibility from the organisers. This relates to contracts, to the change of the format of the show and taking into consideration the needs of the exhibitors. Over the last couple of years brands have been very vocal about their needs, however, these seem to be taken into concideration very rarely. A member of the Swatch Group executive management board explained that the "world has changed" and so Baselworld needs to respond to those changes.
Lastly, other trade shows are overtaking Baselworld as the shows of choice. SIHH (Salon International de la Haute Horlogerie Genève), for example, has seen a number of brands move over from Baselworld and already includes brands such as Cartier and Jaeger-LeCoultre. Patrick Pruniaux, the chief executive of Ulysses Nardin thinks the decision to move to SIHH is a positive one, “I really like the fact that the audience is more select . . . SIHH gives a greater focus on content and on high-level watchmaking.”
The luxury landscape is continuously evolving
The customers now drive the luxury marketplace and in this case, the clients are the participant brands, and so their voices need to be heard. The importance of customer-centricity and experience is key to providing a more relevant offering. The presented formats are the same globally and this repetition is making the excitement, relevance and, arguably, the point of the show less relevant to all types of visitors of Baselworld. “The importance of Baselworld is rapidly declining....it used to be highly important for brands to be at the show from an image/status perspective as well as for business." commented Mr Pacheco, co-founder and principal at Clean Channel Consulting, Seattle.
"Baselworld used to be a fantastic platform and it is true that the reputation and trust of the brand was enhanced by participation at the prestigious show but a change in approach is needed, it should be more customer-focused."
Maria Kaltsidis, Creative Director or Maria Kovadi Fine Jewellery
In addition, the continuous growth of digital and social media means that brands no longer require to wait for certain events to create an impact with new pieces and reveals. Whilst there's undoubtedly a lot of attention drawn to the brands at trade shows, the effect is no longer the same. One can argue that the buzz is gone.
The relevance of trade shows
Whilst there is an apparent over-saturation of the show market, industry events are important for inter-organisational interactions, development and brand promotion, however, unless the format of trade shows like Baselworld and the rigidness of conducting business is addressed, other trade shows will continue to gain momentum, whilst Baselworld's importance will continue to decrease.
Serving the needs of the brands should be at the forefront, as, after-all, they are the clients of Baselworld. As pointed out by Ms Lupo, the managing director of SIHH (Salon International de la Haute Horlogerie Genève), "We are not like Baselworld inasmuch as we are not just show organisers offering spaces -- our mission with the FHH [the Fondation de la Haute Horlogerie which organises SIHH] is completely different — it is to answer the needs of the brands, not to make money by selling square metres.” With industry talks, the show also draws upon the great opportunities of having an incredible caliber of people under the same roof to discuss key issues.
Couture in Las Vegas offers another take on jewellery trade shows, with a more of a social focus, with a lot of business done through networking and interaction in social settings. The interaction and networking is highlighted by industry experts as being an important part of trade shows, with many going for networking opportunities. The smaller shows, such as CARAT+, are said to be better for this, due to greater face to face engagement, opportunities to build personal relationships and make stronger connections. As a result, the experience of the show overall becomes better.
What does the future hold?
If the luxury landscape is changing and the industry is continuously evolving, why is it that trade shows are not? Trade shows need to be serving the needs of the luxury industry, in this case, the needs of watches and fine jewellery brands. It's a two-way relationship, in which both sides co-create value, but for now, this remains misunderstood. Brands have continuously expressed their concerns and let's hope these concerns get addressed by Baselworld management in time to save what was once the most prestigious watch and jewellery trade show.
"The big five will still support the fair. It will not go out of business."
Karl Scheufele of Chopard
There is still support from the big brands and evidence that there's still life in trade shows overall, as we see brands moving to other, more specialised and smaller shows, as opposed to withdrawing from participating completely. We are now witnessing a new luxury industry, that is all about reinvention, experience and innovation. If so much importance is placed on innovation by brands presenting at Baselworld, why is the notion of innovation absent from the show itself? Perhaps, all that is needed, is to listen to the feedback and act upon it.
References:
Luxury Daily https://www.luxurydaily.com/baselworlds-importance-weakens-as-digital-takes-over/
FT https://www.ft.com/content/bd99b5a4-d50d-11e7-ae3e-563c04c5339a
Bloomberg https://www.bloomberg.com/news/articles/2018-04-11/baselworld-the-watch-industry-s-biggest-trade-show-is-imploding
Rapaport http://www.diamonds.net/news/NewsItem.aspx?tc_dailyemail=1&ArticleID=62166
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