Watch Out, JCK: Swatch Just Left Baselworld

RAPAPORT... The dramatic announcement that Swatch Group will not participate in the 2019 Baselworld exhibition was not surprising, despite its shock value. For some time now, exhibitors have expressed frustration with the watch and jewelry fair. The move was significant, however, since Swatch was Baselworld's largest tenant, occupying a significant display area of the show across its 18 brands, which include Tissot, Omega and Harry Winston.CEO Nick Hayek explained the decision with two telling points in a rather scathing interview with CNBC. First, he said, the veteran, traditional trade fairs don't make sense anymore, given that Swatch - and most major brands - have a presence all over the world. Secondly, Hayek noted Baselworld's management - under the ownership of MCH Group - was "a little bit arrogant and snobby," and had not consulted with the major players to bring creative and innovative ideas to the show.We've heard these complaints before from within the diamond pavilion, relating particularly to Baselworld, but also to trade shows in general. Diamantaires have been steadily ditching Basel due to the high cost of exhibiting and the lack of meaningful engagement with management. The dissatisfaction intensified in 2013 after diamond suppliers were shunned into the far end of the new exhibition hall where they didn't get the momentum of visitor traffic passing through the watch section.As for the watch companies, which spend millions of francs each year on their extravagant booths, it's somewhat surprising it took this long. Apart from the unjustifiable expense, why would they want to expose their retail partners to their competitors in such an environment? More importantly, to Hayek's point, the trade shows don't add value the way they used to. Besides, any respectable wholesaler engages with its clients on a consistent basis, all year round. "We don't need it," he asserted.It would surely be more effective for Swatch to host an exclusive event for its retail partners and vendors, providing an opportunity to unveil new products, showcase its innovation and elevate the brand. These events are common and effective in the tech world, creating a buzz around the brand and the product. The same should certainly apply to the watch industry, if not the jewelry trade.Nick Hayek will do far better for his company pacing up and down a dark stage in a hoodie, expounding Swatch's innovation, than running after the management of a trade show that believes he needs it more than the other way around. He doesn't. Just last week, Swatch reported group revenue grew 15% to $4.3 billion (CHF 4.27 billion) and net profit jumped 67% to $472 million (CHF 468 million) in the first half of the year. In his words, "the Swiss watch industry is booming with or without Baselworld."The diamond and jewelry industry should take its cue from Swatch. Businesses incur great expense jumping from show to show, where they should be engaging with customers on a regular basis, and so much of the business has moved online. The sector's show calendar is full. It starts with the March Hong Kong show, then moves to Baselworld in April, Las Vegas in June, and another Hong Kong show in June, the India International Jewellery Show in August, and Hong Kong in September. And that's not counting the smaller shows across the US and the two VicenzaOro fairs that take place in Italy each year, or newer niche exhibitions popping up in Europe to capture the disgruntled companies that have left Baselworld. At too many of the exhibitions, diamantaires and jewelers feel the partnership is one-sided, and that the service and value they receive doesn't justify the cost. They're seeing the same people at each event and the show's success is more often than not measured by the appointments kept with existing clients rather than bringing in new business. It's little wonder many are questioning the strategic value of the trade shows, or that many have already trimmed down their participation.There were notably fewer exhibitors at this year's JCK Las Vegas show, with Pandora being the most high-profile absentee. JCK is moving to a new venue in 2019, providing it with an opportunity to reinvent itself. Let's hope that new beginning will bring something refreshing, innovative and cost-effective to exhibitors. Otherwise, over time, it too, like Baselworld, will fade. The world has changed and businesses are realizing that the traditional trade-show format is not sustainable. There must be more inventive ways for diamond and jewelry companies to spend their money, engage with existing clients and meet new ones.  Image: Courtesy, Baselworld