Winners & Losers In The Watch World Of 2021 And Beyond: There Will Be Fairs, Jim, But Not As We Knew Them
by Ian Skellern
By now, most of us are living under some type of SARS-CoV-2/COVID-19 shutdown and/or social restrictions. Thankfully, social distancing and limited mobility appear to be having the desired effect and, hopefully, restrictions can soon be progressively eased in regions deemed safe, and everyone can get back to work.
In the next weeks, months and years, we will learn which countries’/regions’ strategies worked best and why. And which didn’t work well and why.
And while we are not yet at the “beginning of the end” of the present coronavirus crisis, in the next weeks we will hopefully be at the “end of the beginning.” And there are already quite a few basic facts that we already know, some old and some new, worth highlighting.
The world’s population is not about to lose long-ingrained habits, and tomorrow (long term) will be better than today. How long term is something only history will tell us, but tomorrow will be a little bit different than yesterday, including tomorrow’s world of fine watchmaking.
The good news is that this virus-induced shock will, or at least should, accelerate changes for the better that were already occurring in watch retail, albeit far too slowly, especially to the long-outdated region-based distribution model in a world of ever-increasingly region-less online shopping (see Online Sales Aren’t The Future Of Watch Retail, They Are The Past (Watch Brands Are Just Slow): The Future Of Online Sales Is Dynamic, The Future Of Watch Retail Is Flexible Pricing).
Large high-end watch brands successfully use customers’ propensity for cognitive dissonance to convince them that mass-produced goods are worth an exclusive-luxury profit margin. As their customer base becomes ever more knowledgeable, those brands will either have to offer more – e.g., more personal services and experiences (luxury defined) – or count on reduced profit margins in the future.
“Luxury” is just a perception and too many brands take that for granted.
What we already know
1. This will not be over in weeks or months. The SARS-02 coronavirus, other viruses and flus, and when (not if) an even worse disease comes along are all issues that will be with us for many years. We may end up considering ourselves lucky that we’ve had this relatively “mild” wake up call that allows us to be better prepared for future outbreaks (hopefully before they start). Even if most of us get widespread testing and a vaccine (which is likely at least a year away), the knowledge that there will (not might) be both this virus plus a new virus coming sooner or later, is likely to stay on our minds for a good while yet.
2. Washing our hands is good for us. So Mum was right all along: washing our hands is good for us. Who knew? One thing is for sure, from now on hand hygiene (soap or sanitizer) will be ubiquitous. In 2021 (possibly sooner) hand sanitizers, gloves, and masks (especially in flu season) will become de rigueur.
3. Social distancing is good for us. Handshakes and European kissing are likely to become less ubiquitous, if not fade out of fashion with the young first. Unfortunately, that comes too late for all of the Swiss women I’ve kissed inappropriately over the years.
4. Large, close congregations of people are bad for us. The number one cause of quickly transforming a few sick, but easily manageable, patients into a collapsed health care system crisis is packing large numbers of people close together, especially during flu season. A large crowd, especially one screaming and shouting (aka spreading disease), is like putting petrol on a flame; one case becomes many thousands, all going back to their homes, communities, and workplaces.
All over the world, virulent outbreaks of this coronavirus and others have often occurred and spread through large religious festivals and events attracting many tens of thousands of people. The outbreak in northern Italy flamed up at a big football match (also a sacred occasion for many Italians). Fifty thousand fans, all screaming into the air around them, hugging, sharing bathroom door handles, etc.
If that one person bringing the virus into the football stadium had met just a few friends that afternoon or attended an event with 1,000 fans instead of 50,000, the spread of this virus (or another) would have been much less rapid and much more containable.
We know that our methods of factory farming cattle and chicken as tightly packed together as possible has only worked to date by the massive overuse (and misuse) of antibiotics. Anyone who has looked after animals, fish, reptiles, or birds knows the danger of disease spreading among closely-housed creatures – and the same goes for plants.
Yet still, we willingly pack ourselves into these same situations without a moment’s thought. Or we used to anyway.
The reason that so many of these coronaviruses originate in bats is that:
1. Bats are mammals – like us.
2. Bats are only one of two mammals that can and do congregate in groups of many millions – the other is humans.
In the future, we are likely to be less willing (especially when older) to attend international mass events in (and out of) the flu season because we know the risks they pose. And in addition to fronting the costs of introducing new protective and social distancing measures, large international events may also have to insure themselves against flaming the transmission of a disease – or the host city/region knowingly bears that potential cost as part of doing business.
Either way, this may make many very large concerts, fairs, festivals, sporting events, etc. no longer financially viable unless film/advertising/online revenue compensates for stadium ticket sales. The alternative may (should?) be more small- to mid-sized regional events.
Perversely for the “exclusive” luxury watch industry, massive international events with massive international audiences may become exclusive luxuries in themselves.
Large visitor-number events like professional sports, concerts, religious ceremonies, and exhibitions/fairs, especially those attracting international visitors, are likely to have spacing, maximum density guidelines, regular sterilization, masks, and sanitizers, etc. Leading to slower lines, fewer people per hour, fewer people per day, fewer people attending an event that will likely cost more to run.
I have no doubt that circled can be squared, but I neither know when nor which big fair will get there first.
It will be interesting to see what social distancing and health protocols Japan implements for the 2020 2021 Tokyo Olympics. And how many of those planning to attend the postponed 2020 Olympics find that in 2021 a quieter holiday closer to home may do just fine.
5. Watch fairs and exhibitions will evolve. The point of the large watch fairs is (or was) the sheer scale of their visitor numbers. In no other venue can brands meet with so many clients, collectors and press, and vice versa. If a large fair is significantly limited in visitor capacity by health restrictions, would it still dominate the launch cycles of big brands?
One way to keep cognitive dissidence between luxury and mass marketing is for brands to start traveling to, and interacting with, customers, retailers, and local media more instead of expecting everyone else to travel to them.
Rather than 99 percent (possible exaggeration) of all of the new watch launches taking place in the first three months of the year, brands might (read: should) stage launches around the world, unveiling different products in different regions all through the year, except during flu season. LVMH Watch Week in Dubai is a good example, and that’s a trend likely to accelerate in coming years.
I predict that 2021 and beyond will see a blossoming of small- and mid-sized regional fairs and brand/group events, the larger of which might have high-tech tracking of attendees and possibly with access restricted to those with an official “certified okay” virus pass, if/when developed.
Uncertainty can sometimes hurt more than the remedy. While Switzerland is making plans to open up its economy sooner than later, the expected on-again, off-again shutdowns likely over the next months there highlights the problem of uncertainty.
Here is what Daniel Rossellat, founder and president of the Paléo music festival, one of Europe’s largest music festivals, which is usually held annually outside Geneva in late July (peak summer), had to say to Swiss media RTS.CH, “A ban will simplify the legal aspect of things because if the case of force majeure is pronounced, all contracts with artists will be canceled without consideration in part and others. The money committed would be lost, but there would be no fees or compensation to pay.”
And it appears that the Swiss fairs also have the problem of no longer coordinating with each other. That’s an every-man-for-himself, win-or-lose approach.
Watch fairs and events: winners and losers
Breaking news on April 14, 2020: Rolex, Patek Philippe, Chanel, Chopard and Tudor leave Baselworld to create a new watch trade show in Geneva with the Fondation de la Haute Horlogerie. The show will be held early April 2021 at Palexpo, at the same time as Watches & Wonders. This departure follows a number of unilateral decisions made without consultation by Baselworld management, including the postponement of the watch show until January 2021, as well as its inability to meet the brands’ needs and expectations.
Baselworld: down and, while not out, it will never be the same. But two big advantages
It’s difficult to see a rosy future for Baselworld in its present form. Large international fairs in all sectors have faced declining visitor numbers for years, and COVID-19 just accelerates Basel’s underlying downward trend.
Baselworld’s decision to run January 28-February 2, 2021 is both in the European winter flu season and when much of the world is likely to be experiencing a second wave of COVID-19 cases.
IF it runs, Baselworld in January 2021 is likely to be either a greatly restricted fair (in terms of attendees) or a yet again postponed fair (until warmer weather). And as with Baselworld, restricting admission will frustrate some, while others will appreciate more reasonably priced accommodation and dining.
And if Baselworld is no longer the world’s biggest must-go-to watch fair, what does it offer as a larger mid-sized fair that Geneva doesn’t (I’ll concede nightlife) or Zurich (or another European city) couldn’t? I don’t expect, or hope, that Baselworld will disappear, but can’t help but feel that its glory days are behind it.
Baselworld’s management was arrogant for far too long and started transforming far too late, so it needed an easy couple of years to try and adapt. And they got two disastrous years instead.
Added to that is that the only way for Switzerland to support two big fairs is if they work together, and while we did have a glimmer of hope that might happen, it looks like Watches & Wonders has obviously decided it will do better alone (and it may well be right). Though having Geneva heavyweights Patek Philippe, Rolex, Chopard, Chanel, and Tudor in its fold is hardly “alone.”
And, as if it needed another calamity, Baselworld has another sword hanging over its neck: Rolex. With Rolex having lost confidence in Baselworld, it becomes a self-fulfilling prophesy: with The Crown et al gone, it’s difficult to imagine a future with anything but, at best, a significantly smaller Baselworld.
But Baselworld has two aces to play: unparalleled name recognition (in watch and gem industries) and huge halls. Even if future crowd densities will be half what they were yesterday, Basel still has the space to host the largest Swiss fair. And when it comes to scale, size does matter.
And another plus: if the number of visitors to Baselworld drops to the level of suitable accommodation available, prices come down and quality of accommodation and dining shoot up, as does visitor satisfaction. Prices are only exorbitant because (visitor) demand vastly outweighs supply (beds). Fewer people, better experience: that feels more like “luxury” to me.
Watches & Wonders/SIHH: wounded, will evolve, and possible bright future
Watches & Wonders (W&W) in Geneva has one major disadvantage in that it’s a big international fair and attendances at all big international fairs have been going down for years, a trend that’s sure to continue. And that leads to another downside: timing.
To be relevant, a big fair has to launch a significant percentage of the world’s new watches, and to do that it must be both large in scale and early in the year. Early in the year is flu season.
Watches & Wonders will certainly be influenced by Baselworld’s announcement to run January 28-February 2, 2021, which is both in the European winter flu season and when much of the world is likely to be experiencing a second wave of COVID-19 cases.
IF it runs, Watches & Wonders January 2021 (W&W-V1) is likely to be either a greatly restricted fair (in terms of attendees) or a yet again postponed fair (until warmer weather). And as with Baselworld, restricting admission will frustrate some, while others will appreciate more reasonably priced accommodation and dining.
On the plus side, and it’s a big plus, Watches & Wonders has been geographically diversifying and rebranding itself for a few years now, and that gives it a big head start over Baselworld. We may see Watches & Wonders evolve into a mid-sized regional franchise, and that could be a good thing for both retailers and customers.
And the addition of the powerhouses Rolex, Patek Philippe, Chopard, Chanel, and Tudor definitely provide a new lease on life.
Geneva Watch Days: self-inflicted rough (and premature) start, but possible bright future tied to W&W Geneva (or replacement) and a possibly portable franchise
I’ve given Bulgari CEO Jean-Christophe Babin a hard time recently over his announced 2020 dates for Geneva Watch Days (first March/April, now late August), but my gripe was over the timing (too soon, Mr. Babin, too soon) not the concept.
The distributed approach of Geneva Watch Days with brands exhibiting in separate hotels with retailers, collectors, and press visiting them is perfect for our new low-density world, and like Watches & Wonders it is a concept that can be replicated regionally, but . . . and it’s a big but . . . Geneva Watch Days is a “parasite” watch fair living off a simultaneous larger fair that attracts the visitors.
Geneva Watch Days is a nice, optional extra when run in conjunction with Watches & Wonders (or another fair), but as a standalone world-class event, GWD would require a new strategy. And while I criticized Babin’s (time will tell if impetuous) decision to hold Geneva Watch Days in late summer, that attitude is one of somebody not used to sitting still, and he may well be (and if not should be) thinking, “Blank sheet of paper, what would an ideal Geneva watch/jewelry fair look like in 2021?” There will be opportunities.
Geneva Watch Days lives or dies with Watches & Wonders (or similar).
And now with the breaking news of April 14, I expect Geneva Watch Days to announce another “postponement” until April 2021 to run alongside the new show created by Watches & Wonders with Rolex, Patek Philippe, Chanel, Chopard, and Tudor. That’s looking good for Geneva Watch Days.
The question now is, will Geneva Watch Days spokesman Jean-Christophe Babin, whose day job is CEO of Bulgari, jump ship and join the new fair with Rolex, Patek Philippe, Chanel, Chopard, and Tudor.
Grand Prix d’Horlogerie de Genève: bright future, especially if it can convince more brands to actively participate
While the date of November 12, 2020, which is the start of flu season (October-April) in Geneva, will likely keep attendance at the annual red-carpet event down naturally (invitees declining), I suspect organizers will limit the invites anyway to comply with any with social distancing protocols that may still be in place for large events; perhaps something like every second seat empty, masks, etc.
However, as most now watch the GPHG presentation online anyway, and with the implementation of the newly expanded voting system and Academy, the GPHG is creating a strong international brand with less reliance on the actual audience in the room.
Dubai Watch Week (DWW): the future is already here
I’ve had the great fortune to have been invited to all four Dubai Watch Weeks, watching it evolve from a suboptimal distributed layout into a template for both a successful regional fair – and future fairs in general.
And the secret to Dubai Watch Week is easy: focus on the real, existing/potential customers – collectors and aficionados – to inform and entertain present and future customers directly. While it’s certainly easier for a family-run company like Seddiqi to take a longer view in terms of investment versus reward, others, including Baselworld, are now seeing the long-term costs of short-term profits.
Then there’s DWW’s timing, October, coming out of northern hemisphere summer, warm, not hot, not yet flu season, lots of space, low-density visitors, and lots of fresh air. Build it and they will come.
SIAR Mexico: bright future
While Mexico City might not be most North American watch aficionados’ first pick as a must-visit luxury location, thanks to Carlos Alonso, publisher of Tiempo de Relojes magazine, SIAR has become the North American watch fair for those who appreciate fine watchmaking.
And SIAR is held in October, and again, as with Dubai Watch Week, that has the advantage of being at the end of northern hemisphere summer, not yet flu season. If that’s still on anyone’s minds.
But the main reason that I have confidence in the future of the SIAR is that everyone I have spoken to who has attended it has loved the total experience, although that might just be the tequila talking.
Tempus Singapore: bright future if, like the phoenix, it is reborn
Tempus by The Hour Glass only ran twice, the last time way back in 2007. But Tempus was the first fair that really felt real for collectors: lots of great watches, lots of great watchmakers, lots of great collectors and watch lovers, and it was blatantly commercial with a line of cashiers and credit card machines at the exit. And we all loved it.
Tempus has excellent brand recognition, it is the father of how to do regional fairs right in a well-managed country health system. Singapore is a natural center for the appreciation of fine watchmaking for both Asia and Australasia, and Michael Tay and The Hour Glass know how to create and manage an excellent fair.
I’d be surprised if we didn’t see a Tempus in 2022. Dubai Watch Week has already stated that it would like to run alternate years and the next is planned for 2021.
If Tempus and DWW ran alternating years, both would be more special, both would be more “must-go.”
And while Europe is likely to have a surfeit of watch fairs and exhibitions, where are the must-go-to Chinese, South Korean, and Japanese fairs? Their time has surely come?
The following years should see a boost for local and regional watch collector clubs like RedBar as well as brand, retailer, and media events.
For anybody either managing a watch event now and wanting to make it better or considering staging a new event, just follow one straight line: what would collectors like and enjoy. Stop focusing on the middleman (retailers/distributors), even if you are a middleman, and start focusing on the end clients and educating prospective clients.
Stop showing us so many watches and start showing us all (especially future clients) why we should care.
Make no mistake, the whole watch – in fact the whole world – will come out of this better than before (though before was far from good enough), and we will soon be looking back and wondering why we didn’t do “the new way” much earlier.
Some independent watchmakers and small brands will not survive and that is always sad, but in the empty fertile ground they leave will spring up exciting new horological superstars that have been biding their time and hoping for a break.
Regional fairs will grow stronger, making great watches and great watchmakers more accessible to both their clients and the wider public. And place more demand on their time. Swatch Group and LVMH will have their traveling fairs, and more will surely follow.
There will be many exhibitions, all competing for both the top brands and best visitors. Some will get innovative and succeed, some will fail then succeed, some will fail. ‘Twas ever thus.
Fine horology isn’t going away, it’s just shedding its old skin. We might see a glimpse of what that new skin looks by 2021. I hope so.