“Longines CEO Matthias Breschan says Swatch Group brands will not return to vast global trade shares like Baselworld or Watches and Wonders,” watchpro.com reports. Shares or fairs, no matter how you slice it, Mr. Breschan’s announcement will send shock waves throughout the entire watch industry. The Swatch Group owns 18 watch brands, from upmarket Harry Winston to mass market Swatch. Their decision to ditch the big shows . . .
doesn’t kill them with a single blow, but sets them on the path to extinction. It remains to be seen if The Richemont Group, LMVH and the other major players follow suit, but I wouldn’t bet against it.
“The whole way Baselworld was conducted was obsolete,” Mr. Breschan told WatchPro. “We need new ways to present novelties throughout the year and in different countries. We need to be flexible.”
In the aftermath of the fading COVID-19 pandemic, where sales took an enormous hit, with the smartwatch eating the traditional watch’s lunch in the mid-market (where Longines lives), the Swatch Group and its competitors need to pretty-up their balance sheet by cutting expenses.
The cost of appearing at the major trade shows runs into the millions. Looked upon as a cold-hearted business decision, ditching colossal trade shows makes total sense. From the manufacturer perspective, watch shows exist for three primary reasons, all obsolete: channel discussions, branding events and journalist junkets.
The original purpose of the “trade fair” for manufacturers: present their wares to wholesalers and dealers and tot up orders for their products. The entire channel is much more sophisticated and this can (and is) done at a distance, using data instead of relationships or “judgement”.
So the trade fairs morphed into ways for manufacturers to get as much exposure as possible, in a place where everyone who was anyone in the watch world attended. A funny thing happened on the way to Baselworld. The large manufacturers realized their brands were driving the shows, not vice-versa.
Just as Apple left Macworld, knowing that its product announcements would be covered wherever and whenever it wanted, the watchmaking majors have enough mindshare to do the same. Rolex can stop time when it makes a product announcement. Patek’s bungled EOLing of the 5711 was the talk of watch blogs for weeks. When you have that kind of sway, why would you share the attention with anyone?
The evolution of the grifters calling themselves the watch “press” has further killed the need for watch shows.
Time was a manufacturer needed to provide a watch to different writers for photography and handling so they could write about it, and each country had individual magazines and reviewers. It made a lot of sense to get everyone in one place to do this.
These days, most influential “publications” are either completely in bed with the manufacturers or hype every piece of shit that comes along for the clicks. (Come to think of it, that’s HoDinkee on both counts). When you have a supine press and paid influences – but I repeat myself – who needs anything else?
Not Swatch. Not Rolex either. Longines’ Breschan is giving air cover to the rest of the industry to abandon ship. Until then, the global watch trade fair is a dead genre walking. But not for long.
Ha when you call them grifters. My last comment on Hodinkee that amazingly hasn’t been deleted:
“I bought the Timex Navi XL Automatic to satisfy my desire for the Black Bay Red. And yes, I bought it from the HODINKEE Shop with my own money (where I subsequently paired it with our Dark Stained Brown Leather Single-Piece Watch Strap – *chef’s kiss*).”
LOL Or how to subtly drive sales in which this website needs and doesn’t carry said other brand.
Nah. While costly, the participation in the fairs is rarely a big chunk of total overheads for these kind of companies. I think it’s more related to being forced to push out the crown pieces of the year at the same time as everybody else – which means more competition. By not participating, the timing and leveling of marketing resources and efforts can be optimized better.
It’s hard to tell because Swatch Group doesn’t break out marketing expense in their annual report (unlike an American company), but typical buildout of a medium sized custom booth, the travel expenses, and everything else at a typical US trade fair would run into the many hundreds of thousands of dollars, so events are a decent chunk in a typical marketing budget – probably several per cent of the overall marketing budget for the big guys.
But ultimately you’re right – if the ROI pencilled out, they would stay. It obviously doesn’t because they can “win” a few news cycles when they want instead of competing with everyone else for the same attention.
I’m a laggard that really wants to preserve old ways of doing things, but even I was amazed to learn that not only did these shows still exist, they were big extravagant affairs. And that was before the corona excuse was a thing.
I tend to believe that despite all the bruhaha from the CEo, the Swatch group is in deep s*** – and this is the underlying theme of this kind of statements