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Breaking News: Swatch Group To Leave Baselworld Fair In 2019 According To Nick Hayek

Breaking News: Swatch Group To Leave Baselworld Fair In 2019 According To Nick Hayek Watch Industry News

Chairman of the Swatch Group Nick Hayek seemed to announce today via a Swiss newspaper that each of the Swatch Group watch brands would be leaving the long-lived annual wristwatch and jewelry trade show Baselworld. If Hayek sticks to his guns, this is a big deal and could spell the end of the trade show which has been a prominent fixture in my life for about a decade and much more than that for people who are more senior in the watch industry.

Explaining the context of the situation is complicated and involves egos and politics as much as it does actual business interests. With that said, a Baselworld shakeup up is hardly surprising. The trade show isn’t operated by the watch industry itself but rather MCH, which is a third-party organization that operates the convention center where Baselworld is held in the city of Basel, Switzerland. MCH has been deflecting calls to radically restructure the aging watch industry trade show concept for years.

Breaking News: Swatch Group To Leave Baselworld Fair In 2019 According To Nick Hayek Watch Industry News

Swatch Group Chairman Nick Hayek (KEYSTONE/Martial Trezzini)

Compounded with the massive economic stress that the watch industry is currently facing, it is hardly surprising that “shots are being fired.” Baselworld saw its number of exhibitors fall sharply from over 1,300 to just 650 from 2017 to 2018, with overall exhibition space also decreasing by a third. Compared to all-time highs with some 2,000 participating brands from many moons ago, Baselworld had certainly been expecting brighter news. The Swatch Group is one of the biggest, if not the biggest Baselworld client – along with colleagues such as the LVMH family of watch brands, Rolex, and Patek Philippe. Without all of these clients’ participation, Baselworld is arguably null.

Part of me suspects that Mr. Hayek is posturing as a tactic to induce MCH to cooperate with him and other watch brands who have been increasing the volume of their complaints about Baselworld over the years. The main issues brands complain about are money and services. Many argue that either Baselworld dramatically reduce its costs for exhibitors (and guests) or they radically increase the services, comforts, and educational/networking opportunities that the show offers. All of this is actually quite reasonable, and as a member of the media I too can empathize with the watch brands because our requests and suggestions to the Baselworld organizers have gone equally unheeded over the years. No offense intended, but my instinct tells me that the conservatism inherent in most things Swiss has got to be a serious factor which prevents changes from occurring in the Baselworld organization. To empathize with MCH, trying to make all the watch brand exhibitors happy at the same time can hardly be a pleasant or simple task.

At the end of Baselworld 2018 (our roundup and analysis here) the Baselworld organizers sent a somewhat shocking announcement that the 2019 iteration of the show would be one day less. The move was designed to help appease complaining brands who argued that exhibiting at the show as well as accommodations in Basel (which routinely suffer from under capacity in accommodations, parking, and convention visitor services) was more expensive than it was worth. In other words, as the watch industry’s sales, marketing, and distribution models change, attending Baselworld was a money-losing investment. They further argue that Baselworld hasn’t done much to help the situation in regard to making the show more productive and useful. The exhibitors who support Baselworld and fund it are pretty unhappy with the lack of service they receive, and now they appear to be really unhappy with a lack of voice.

Breaking News: Swatch Group To Leave Baselworld Fair In 2019 According To Nick Hayek Watch Industry News

What seems to have caused Nick Hayek to erupt was a message sent out to Baselworld exhibitors about a “new concept” for the Baselworld 2019 show. Details of this new concept have not emerged yet, but no one seems to be particularly happy with it – least of all, the Swatch Group. Hayek argues (convincingly) that MCH should have at least included major exhibitors in the conversation about how the show might change. Ironically, watch industry professionals outside of Switzerland make the exact same complaint when it comes to the brands they work with or for not including them in conversations about major business changes. Just ask most retailers, distributors, or other marketing and sales partners.

Perhaps it is fitting for the watch brands to get a small taste of their own medicine – which will hopefully lead to more empathy across the board. Egos aside, it does seem reasonable for groups like the Swatch Group to be consulted when it comes to changes to a show they invest so many millions of dollars into annually. In any event, it doesn’t seem like the Swatch Group or other brands are happy with what MCH has planned for 2019’s Baselworld.

About the Author

Fueled by an unshakable love for horology and a general curiosity for intricate things, Ariel Adams founded aBlogtoWatch in 2007 as a means of sharing his passion. Since then, ABTW has become the highest trafficked blog on luxury timepieces, and Ariel has become a contributor to other online publications such as Forbes, Departures and Tech Crunch, to name just a few. His conversational writing style and inclusive attitude brings a wider appreciation for watches the world over, and that's just the way he likes it.

Follow me on Google+ Ariel Adams

Comments

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  • Elijs Dima (@x2eliah)

    From the outside looking in, Baselworld might as well be a digital-only event nowadays; the main outcome and purpose of baselworld is to announce new releases from all the watch brands. It’s not a “Trade show” in the sense of suppliers looking and meeting watch companies and clients, it’s a “trade show” only insofar as watch brand reps meeting bloggers/journalists with cameras. The end outcome of the show is a torrent of articles and instagrams about the watches…

    The same can be achieved far cheaper and more effectively with timed press releases and more private events & press junkets. For years now, there’s simply no point in having Baselworld as a physical thing.

    • BJ314

      So they are saying that Breitling did a travelling show that got them much better results. This makes more sense. Intimate settings, real hands-on. Reminds me of when Mercedes Benz did these travelling shows where you could drive their cars on closed tracks. It was awesome. There were driving instructors and actual race car drivers on hand to give tips. Then you get to haul ass in their sportiest cars for 20-30 min a pop. And it cost nothing to attendees. Even Madza did this for 3-4 years with great success. I did both and then guess what I did? I told everybody about it for the next six months.

      Got a new diving watch? set up some time IN the water. Show people how to use the watch in real conditions. Do a weekend in Miami or LA, round up some other vendors to show off other gear. Watch owners would come out.

      Got a new executive wrist collection? Pick 10 stores throughout a country and host in-store happy hours. Publish invites in local business journals. Execs will come out. And they get introduced to authorized dealers. No special lists. No “just for existing customers or people who know somebody”. Just open invites. Partner with GQ in NYC or Chicago and the place would be flooded with 700 guests easily. Afterwards you have 700 people posting selfies on every social media platform for the next 2 weeks. For free.

      There are literally a thousand ways to introduce products for much less money while leveraging the power of the internet.

  • Good news for independant watch maker .

  • wejpasadena

    Wait…I heard that all was well in the Swiss watch industry…sales are way up…was someone trying to spin things?

    • Sheez Gagoo

      Industry does better but BW simply became useless. No more ROI.

  • Vegan Dinner

    A lot of coverage this year was focused on Rolex and Tudor I’m not surprised Swatch has given Basel the boot. Fans can access info on blogs, brand websites and Youtube while retailers can attend more regional events?

  • benjameshodges

    SwatchFest 2019. They have enough brands to cover a mini exhibition. Maybe a travelling trade show or pop-up. These objects are small and do not need humongous halls to show them off. Plus most of the actual media is digested online.

  • I don’t think this is about Swatch’s strategy not being enabled via BaselWorld; it’s about their marketing and comms approach as a whole being years behind the rest of the market. They are run at the conglomerate level, whereas the likes of Richemont empowers it’s maisons with more autonomy. They need to focus on being more agile otherwise the disruption that their antics causes is just as likely to damage them as much as their competitors and the industry as a whole. They may be an absolute giant in the industry but they behave like a family business dressed in corporate attire and the opposite appears to be the key to success.

  • Marceau Ratard

    I read somewhere that it costs the Swatch group something like $50,000,000 to attend Baselworld. Even with all of the foot traffic at the show 99+% of people who will end up buying the watches see the releases online. A smaller “Swatchworld” show or even separate brand specific releases spread out over the year would be much cheaper and they could have more control over the event.

    The nearly instant sellout of the Ultraman speedie shows the power of internet marketing. Granted few other brands will have that kind of success but it does show that an internet based marketing campaign can work.

    • BJ314

      That’s the most ridiculous thing I’ve ever heard. That’s enough money to build a 12-story high-rise apartment building with underground parking and over 15,000 sq ft of first floor retail in Chicago or L.A. EVERY YEAR.

      You’re under the impression they are spending that to attend a trade show? But those same brands don’t have enough money to expand their actual physical store presence around the world? LOL

    • $50M is an interesting number. If true and Swatch Group uses less than 10% of the total floor space then the annual income for BaselWorld would be $500,000,000 (half a billion bucks). Considering that the somewhat recent upgrades to Hall 1 cost $450M back in 2013, MCH looks like they are making back the construction costs every year. Mitigating factors to this may be that Swatch Group pays a lot more per square meter than the other 90% of exhibitors since they are in a prime position on the ground floor of Hall 1. Plus there are expenses for MCH in running the show.

      But if the total revenue of BW is even half of that (say, $250M) and they have $100M in operating expenses (which seems high to me), then they would clear $150M per year. So they could have already paid for the big construction bill of 2013 and are again raking in the CHF.

      So Swatch Group, along with other brands, has a right to be pissed off considering the take it or leave it attitude of MCH. Like many things Swiss, MCH seem to think that business as usual is fine and feels they are under no pressure to change with the times. I say this because Ariel had a number of suggestions on how to improve press accommodations and they politely listened and then did nothing different the following year.

      • KJKSLC

        If that $50M number is true, I’m guessing it’s the total cost, not just the exhibition fee. People have to get there, stay there, eat there, and work there. And I’m assuming that the exhibition fee doesn’t count the costs to build/rebuilt/remodel the exhibition space, create and print marketing materials, and handle the rest of the logistical support for the show.

        If the $50M number is right, I wouldn’t be surprised if only 10% of that were actual exhibition fees paid to MCH.

    • Bert Kanne

      Trade shows are becoming like newspapers and magazines; obsolete. The internet gives everyone almost instant access to current and future industry product information, opinions and reviews. The costs outweigh the benefits of these events.

  • Raymond Wilkie

    I would agree. Sometimes things like beselworld can get a bit up themselves and have to be brought down a peg or two. How many folk that went last year actually went home with a new timepiece?

    • Timestandsstill

      Probably few to none, given that Baselworld is a trade show for the “trade” (distributors, retailers and press/journalists).
      Although the show is open to the public one day, most consumers cannot actually get into the booths to see the watches, most of which are not for individual sale at this event anyway and many of which are not even finished products yet.

      • Exactly – this is an industry trade show. It purpose is for watch distributors and retailers to meet with brands and place their orders for the coming year. Almost as an after thought, the press is grudgingly part of the process. While press releases have become a big part of the deal with the rise of the Internet, the prime purpose of BaselWorld is for the order books of the watch brands to be filled. So the watch industry buyers will go even if the public was never allowed in.

        SIHH is increasing becoming open the public, but they are a more typical example of how the shows are for the industry (and press) and not places for the public to see new watches nor buy them. The big brands simply don’t sell any watches over the counter at the show. Smaller brands sometimes do but really no one is set-up for point of sale at the show. So the watch wearing public’s impression that this is a show they need to attend is simply false. And as noted, the press releases and online press provide the exposure to outside of the booths.

        At most special interest shows there would be things to see and do (including plenty of food in the halls) for the public – not at BW. Food is relegated to the dark edges (literally) of the halls, overpriced and not very good. Yes, some of the brands will offer you champagne in the booths but if you start drinking before 4 PM you won’t be of much value when you finally end your day in the halls at 6 to 7 PM. Some booths have better food than others but it’s not a feast. More like a bite to keep your butt from dragging while going from booth to booth as a member of the press. Hourly meetings go quickly but the days are long. And yes, Biver cheese is quite tasty. The beverage we ask for most in the booths is cold water (which all brands thankfully will provide).

        For the public this show is really a waste of time. If you aren’t a distributor/retailer or an accredited member of the press (with appointments set up prior to the show) you won’t get past the front desk and into the showing rooms where watches are handled and photographed. Sure you can look at watches though the windows on the outside of the booths as a member of the public (which is the worst way to take photos), but that’s it. Smaller brands may make time for you but the feeding frenzy (for information) is about the watches from the big brands.

        SIHH is run by the brands that exhibit there. BaselWorld is certainly not. As Ariel noted, those who run the show don’t seem eager to hear suggestions on how to make things better. With the recent watch industry contractions coupled with the reduced exhibitor count the past couple of years, Swatch Group is in the perfect position to finally do some arm twisting with MCH and get them to listen to their customers.

        • Gokart Mozart

          Interesting and informative I have a friend who lives nearby and almost went a few years ago.

          Personally for me as a watch lover the attraction is to see all the brands you never hear of and the smaller independents.

          Also 1 day for consumers is ridiculous. Airs like having 5 minutes in all you can eat buffet.

          I find a day and a half at Salon QP is not enough.

  • DanW94

    “I saw a Deadhead sticker on a Cadillac, A little voice inside my head said don’t look back, you can never look back”

    Seems like old times…

  • Sheez Gagoo

    Hayek was pissed, that independents have more room now. So I guess, he will use his adieu as a compromat. We’ll see SG possibly back in Basel sooner as we think.

  • George Yang

    I can see why Swatch and some others are considering withdrawing. What’s the point of the fair to demonstrate new models when they don’t come for another half year? And all the info comes out at once, it’s not like Swatch gets a monopoly of the press from the event, they have to compete for air time with the other brands, they all end up pretty much cancelling each other out.

  • Gokart Mozart

    With there advertising budget, they don’t have any concerns with advertising budgets.

    I would not be sprised to see billboards in the Arctic and Antarctic for the Seadweller and Explorer….

  • Han Cnx

    Excellent article, excellent thoughts.

    Perhaps another component is that trade shows in general are under pressure. It used to be that companies could send half a department to travel on their weekend half way across the world and spend lots of time there, but people are less inclined to do that, plus long distance travel in general is now more something to be avoided rather than enjoyed.

    One thing MCH could do is radically invest in the logistics of it all: deals with accommodation providers further afield and getting people to the show and back, in a convenient manner. And just say ‘Yes’ to the top 3 common suggestions from both big and small brands, whatever it is.

  • Winston Vaduz

    The problem may just be Basel / Switzerland itself. Everything is just too expensive, without getting any kind of feel or appreciation in return.

  • Agnar Sidhu

    Perhaps we will see the ABTW fare in the next couple of years then?? ?

  • Gokart Mozart

    But they still spend more than anybody else in marketing. Now they advertise just to make sure you don’t forget them.

    One of Kylie’s biggest hits was about Rolex. “I just can’t get you out of my head”

    That’s why they have such a big area for 1 watch, the Oyster.

    • SuperStrapper

      Kylie Minogue’s Cant Get You Out Of My Head was way ahead of it’s time. They still play it today. I think it came out in 2000.

      But I digress. I understand why Rolex stays at the show, I just don’t think leaving it would hurt them in the slightest.

  • DanW94

    Nobody told me there’d be days like these, Strange days at ABTW…
    most peculiar Mama..

    • Berndt Norten

      JOHN Lennon at his cringeworthy worst! (I love it!)

  • Berndt Norten

    That’s when you reset and wind the Jazz Master

    • FS1900

      I nominate Berndt Norten for the position of unpaid deputy to moderate just the monthly giveaway posts.

      • DanW94

        Hear, hear, I second that nomination.

  • Tõnis Leissoo

    I don’t understand one thing about the Baselworld. The exhibition areas/boxes of large manufacturers stay there for an entire year and the building is not used for any other events throughout the year. Based on those facts why Baselworld couldn’t stay open all year long? People would visit Baselworld many times per year if they’d keep the doors open. It would be enough if it’s opened once per month over a weekend.

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