Jeweller - April 2020

The world of watches is almost
unrecognisable from what it was ten,
or even five years ago. From design to
functionality and marketing, the category has
evolved significantly due to a combination of
technological change, industry politics, economic
uncertainty and shifts in communication.
The decline of Baselworld – once the world’s premier
watch and jewellery fair – became clear between 2017 and
2018, when the exhibitor number nearly halved from 1,300
to around 650.
Shortly after the 2018 show, Swatch Group pulled out of
exhibiting its 18 brands at future editions of Baselworld,
followed by Raymond Weil, Corum and Maurice Lacroix.
This year’s event has been cancelled in the wake of the
coronavirus pandemic, which some industry commentators
welcomed as a reprieve from what would have been a notably
anaemic show, even when compared with previous years.
Indeed, it has been heralded by some as a chance to
reinvigorate and renew the show – and the watch industry.
Perhaps the most notable trend within watches over the
past five years is polarisation – the movement of consumer
spending to the extremes of the category.
Luxury watches have maintained consistent
revenue – the Federation of Swiss Watch
Industry (FH) reported that exports were valued
at CHF21.7 billion ($AU37 billion) in 2019, topping
a record set in 2015 – albeit based on smaller
sales volumes.
This trend indicates consumers are embracing
more expensive models, as well as turning to
the secondary watch market for choice.
Meanwhile, mid-range watch brands – generally
defined as those between $600 and $2,000
– have seen their market share reduced by competition from
smartwatches, while fashion watches have been influenced
by changing consumer habits and online competitors.
However, brands have adapted to counter these threats.
Ultimately, the challenge for retailers is to navigate the
shifting sands of the watch industry hourglass, taking note of
competitor trends while ensuring the product mix is relevant
to consumers and marketed through the correct channels.
Time to split: the exhibitor exodus
The past five years have not only brought functional and
material changes to the watch category, but fundamental
differences in the way brands communicate with both retailers
and consumers.
The interconnectedness and immediacy of global
communication has changed how watches, from luxury
Swiss timepieces to affordable fashion watches, are marketed
and distributed.
For decades, debuting new models amid the hustle and bustle
of Baselworld’s Hall 1 was aspirational; a statement of luxury
and success, lending prestige to a brand and its products.
It was also practical, ensuring marketing budgets could be
focused on one major event, nearly all international retailers
could be briefed on new products at the same time, and media
representatives could report on a wide number of different
brands without extensive travel.
INDUSTRY STATS
Annual Growth
2020–2025
Traditional Watch
Increase
9.92 per cent
Smartwatch
Increase
14.5 per cent
Hybrid Watch
Increase
14.5 per cent
Data: Mordor Intelligence
Images (from top): Rolex,
Apple, Garmin
But as the cost of exhibiting increased and global
communications were simplified to more directly target
consumers, Baselworld’s relevance receded.
Suddenly, the crowds, noise and expense seemed less
appealing, particularly when brands could host luxury retreatstyle
product showcases for their retailers and distributors.
Some of these events even took place in Switzerland around
the same time as Baselworld, including Swatch Group’s
Zürich-based Time To Move conference and Movado Group’s
Movado Summit in Davos.
At a time of unprecedented prosperity – 10 years after the
Global Financial Crisis – the world’s most prestigious watch
exhibition began to falter. Brands were no longer willing to
pay Baselworld’s considerable exhibitor fees, reflecting the
diminishing returns of the exhibition model itself.
It was not helped by the intransigent attitude of show
organiser MCH Group. Michel Loris-Melikoff, managing
director Baselworld, told Jeweller last year, “MCH organised
Baselworld and if you wanted to be part of the show, you had
to accept everything – take it or leave it.”
Yet the problems were not solely attributable to MCH.
The Geneva-based Salon International de la Haute Horlogerie
(SIHH) was not immune, losing Audemars Piguet and Richard
Mille following the 2019 edition.
Loss of exhibitors was among the factors prompting the
rebranding of the show to Watches & Wonders Geneva late
last year. In 2020, it was set to include consumer-focused
activities such as walking tours and a dedicated day of
access to the show floor.
The two shows were also scheduled to run consecutively this
year, shifting into a late April-early May timetable. However,
the change in dates was the final nail in the coffin for many
long-time exhibitors, including Seiko and Casio. Both brands
withdrew from Baselworld in late 2019, given the dates would
coincide with a week-long Japanese public holiday.
In January this year, LVMH – a long-term supporter of
Baselworld – hosted its first ‘LVMH Watch Week’ at the
company’s own Bulgari Hotel in Dubai. Bulgari consequently
pulled out of the Swiss show, though TAG Heuer and Zenith
were still scheduled to exhibit before Baselworld was
cancelled in February.
However, some industry commentators have noted the
‘individual showcase’ strategy benefits brands at the
expense of their retailers, distribution partners, and
ultimately consumers.
Rob Corder, editor in chief of UK industry publication
WatchPro, wrote earlier this year, “Rolex/Tudor, LVMH,
Swatch Group, Richemont, Movado, Fossil, Breitling,
Audemars Piguet, Grand Seiko, Kering and many others
are refusing to come together into one, or even two, major
trade shows, leaving retailers, consumers and press
trawling the world for the first five months of the year.
“Every one of the groups and brands will tell you they will be
putting on a fantastic show, but none appear to be listening
to the needs of their key retail partners.”
He also dismissed the idea of Swiss exhibitions as consumer
shows, stating, “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.”
Indeed, the coronavirus pandemic may make that a necessity
through its devastating impacts on the travel sector.
April 2020 | 31