It is more than probable that Baselworld won’t get past the 2020 edition without radically changing the format of the exhibition. Since the last edition of the show in March and the many articles published and predicting the eventual end of the show in its existing formula, there is hardly a day passing by without the announcement from a brand that won’t participate next year.

Today another watch brand announced that it is renouncing participation in next year’s edition, Maurice Lacroix, a mid-range brand with a past, but no clear future. It’s not a major brand, but its announcement comes after the one made by the single most important exhibitor at Baselworld, The Swatch Group.

I would like to differentiate two trends in the lineup of defectors:
• The brands which are renouncing for strategical reasons, but mainly the cost implied by a marketing activity with a very questionable economical utility
• The others which have decided to quit mainly because of opportunistic reasons and/or the necessity to reduce their marketing budgets

The common pattern they share though is the fact that they’re using the same rhetoric: after more or less 30 years of participating in the fair, they discover that they have no return on investing millions or even tens of millions of Swiss francs for an exhibition with a format more common to the 19th century than the 21st !

The Geneva counterpart – SIHH (Salon International de la Haute Horlogerie) – is not necessarily in a better shape with the announced departures of two major exhibitors, Audemars Piguet and Richard Mille. Two brands sharing a common feature with two of the most pragmatic CEO’s of the whole watch industry. This fair has the advantage of being more elitist and hence more focused (in terms of price and brands positioning) than a generalist exhibition such as Baselworld.

Rather than just simply list the facts and to count the brands having left Baselworld since the last edition in March, I would recommend analyzing the causes of the drain of exhibitors and make it a case study.

How to kill the goose that lays the golden egg?
Any success brings self-confidence in the best case, but mostly also a certain form of arrogance. After having created a very profitable business model, the organizer of the fair has gradually lost connection with reality. It is indeed difficult to understand how a watch or jewelry brand with sales below CHF 5 million could afford a booth plus the related costs for an annual amount up to CHF 1 million or even more. A common rule for luxury goods is stating that the marketing budget can be as high as 20% of annual sales.  If we assume that Baselworld is the most important marketing activity, we could allocate half of the total budget. But those CHF 500’000 leave us far from the target!

When the new hall 1 was inaugurated in 2013 I was wandering alone on the first floor, admiring the gleaming booths. In fact, I was asking myself how all those brands could afford those tremendous budgets! Finally I came to the conclusion that the vast majority of the exhibitors were considering their Baselworld participation disconnected from any economic thoughts….

By reflecting only on the most efficient use of the exhibition space of the halls, the organizers of Baselworld have completely forgotten the ones meant to bring the exhibition alive…. the visitors! Hence no segmentation was really put in place to guide the visitor, except the division of halls between the jewelers and the watchmakers. It akin to a car show having Porsche and Vauxhall next to each other. Each brand has its target customers as its foremost purpose, but unlike the car industry where any potential customer can understand the difference between a sports car and an average car the watch industry is full of niche brands. Those brands frequently lack a brand awareness but bear a potential with a niche target.

A journalist specialized in the field of watchmaking – Grégory Pons, founder of the blog businessmontres.com – came up in 2009 with the excellent idea of creating a hall dedicated to niche brands. Those micro-brands are the essence of innovative watchmaking https://businessmontres.com/article/un-retour-vers-la-watch-factory-ou-tout-commence-aux-lisieres-de-baselworld-mbandf-cabestan-haldimann-urwerk-speakemarin-debethune-mct-alainsilberstein. But rather than pursuing this logical path, the logic of more square meters equals more bucks remained the mantra of the organizers.

Can Private Baselworld still be saved?
Kept in its existing formula, the answer is NO for certain. The organizers of the exhibitions in all fields, watches, cars and anything else have to reflect seriously about their future, otherwise the exhibition halls all over the world will end like desacralized churches!
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The present article is trying to analyse the world of watchmaking, but the car or electronic industries are stuck exactly in the same situation. The times are gone when the whole family would go on pilgrimage to discover the latest hifi equipment or the newest BMW. The Paris Car show has seen the defection of many car makers that are for sure not returning to a trade show with no more usefulness.  

What the organizers of Baselworld and the SIHH should consider doing – albeit very quickly – is to switch from an obsolete business model of B2B to B2C. The direct to consumer business models are becoming a reality very fast thanks to social media and digital technologies overall.
Creating an experience rather than simply visiting booths which never bear any interest for the average visitor…. who is after all the potential client! It is hard to imagine that – with the exceptions of Hublot and Louis Moinet – no brand has ever made an effort to create an interactive experience with the visitors.  

The exhibitions 4.0
I am very much convinced that the product launches of the future will have a much more futuristic approach. Is an annual multi-brand event still of any use ? I don’t think so. Just like Apple and Tesla today are making their own shows to attract the maximum attention to their product novelties at a given moment in a precise place. The more the event is focused geographically speaking – also to comply with certain cultural sensitivities – and on a single brand, the most efficient it will be. But first and foremost: each brand should have its own event respecting the size, the ambitions and the financial means of the company. 

​Oliver R. Müller, Founder, LuxeConsult