LVMH have just begun their own Watch Week event in Dubai, United Arab Emirates. The show is being held in Bulgari Hotel, and they’ve flown in journalists to attend. (We wouldn’t have gone if we had been offered. We don’t do junkets). They’re also threatening to stop attending Baselworld.
Why would they do that? Jean-Christophe Babin, CEO of Bulgari told press in attendance that the holding the event in a hotel (their own hotel) was a big savings.
“It is much cheaper,” he said in his opening address to the press. “[Trade] fair?s are outrageously expensive.”
Babin didn’t say that all LVMH brands would pull out of Baselworld, but also in attendance were the CEOs of Tag Heuer, Hublot, Zenith, and the head of Bulgari watchmaking.
In our opinion, this is another nail in the coffin of Baselworld. The show has been shrinking, from several halls to just a couple. The big brands are leaving.
Breitling left. Swatch Group left. Rolex is said to be expanding their presence at the show, but that leaves you with a show that gets dominated by a few major brands and a bunch of smaller brands, and becomes a much less interesting show to attend.
Trade shows exist for a couple of reasons: for brands to meet retailers, and for brands to get press coverage. If you can do the same thing at a hotel, you don’t need to spend millions on booth space.
Babin is almost certainly right: Even after you factor in flying journalists about, putting them up in a hotel, paying for their meals (I’m guessing, we don’t do junkets), the costs are still much lower than the cost of the gigantic booth and trade show space, along with the inflated hotel costs due to the show. (Hotels raise prices when a show is in town. A Vegas room that’s a few hundred becomes a 1000 a night when CES is going on.)
Holding these sorts of private events helps the big brands. It makes life harder for small brands that might benefit from meetings at a tradeshow like Basel – for example, if a retail buyer is there meeting with a big brand, they might also take a meeting with a small brand to make good use of time. Small brands probably can’t afford to put on their own shows like this and get retail buyers to come. It will take a different strategy for them.
To sum up – private events save money for big brands, mean the end of trade shows eventually, and put pressure on smaller brands to find other ways into retail. I predict we’ll see more of this in the future.