The jewelry industry is international and diverse. One of the few places where manufacturers, distributors, retailers and every other facet of the business can come together is the handful of large trade fairs throughout the world. These events provide forums for representatives of disparate groups to share information and lobby one another; to attend seminars that keep people up to date on industry topics; and most importantly, to buy and sell goods and services.
However, the future of trade shows as a viable means of doing all that is being called into question. Some of it has to do with the rapid change happening throughout the world, and some of it is self-inflicted.
Direct to digital
You can’t even begin this kind of discussion without noting the most obvious change in the world today: the flow of information and commerce on digital channels. For business-to-business (B2B) manufacturers, it means the ability to sell directly to retailers in a way that’s instantaneous, efficient and more affordable than going to trade shows.
Brands, meanwhile, are using this relatively cheap technology to go straight to consumers with their messaging and sales — bypassing distributors, retailers and traditional means of advertising. This allows both direct feedback from customers, and instant data on the success of marketing campaigns and products. The use of digital marketing is most visible among the largest luxury brands (many belonging to holding companies such as the Richemont Group, Kering, or Swatch Group), which have large advertising budgets. For some companies, it has extended beyond the digital space and into brick-and-mortar retail. For example, Richemont-owned Van Cleef & Arpels has left the annual Salon International de la Haute Horlogerie watch show in Geneva because the brand’s distribution is now exclusive to its own retail network throughout the world.
In the jewelry industry, it’s not just the biggest labels that have moved to digital. US jeweler Lagos, for instance, stopped exhibiting at trade shows several years ago. Its founder, Steven Lagos, said the company was focusing on working directly with its retail clients (luxury department stores and independents) through personal visits, automated inventory systems, and the web. Lagos also sells directly to consumers online with the help of its robust Instagram and Facebook accounts. In 2017, the founder said online business had tripled year on year.
The difficulty of competing with large firms at trade shows is part of the reason smaller independent designers are marketing and selling their products online. In some cases, they are partnering with other e-commerce sites. For instance, 10 jewelry brands sell their wares on Net-a-Porter, while direct-to-consumer site Auverture — founded by Dutch jewelry designer Bibi van der Velden — has become the digital home of 45 independent jewelers.
Sparing the expense
Like everything else, the cost of attending trade shows has increased, and the return on investment for exhibitors and buyers has largely fallen. This has been most evident in the spiraling decline of the Baselworld Watch and Jewelry Fair. Once among the most prestigious shows on the industry calendar, it went from a high of 2,000 exhibitors in 2011 to only 520 in 2019. Buyer attendance has seen a similar downturn.
One common theme among exhibitors’ and attendees’ grievances was the expense. The other was the tone-deafness, even arrogance, of officials representing Baselworld and the MCH Group (which owns and operates the Messe Basel exhibition center where the annual show takes place). Price gouging was long practiced at the limited number of hotels and restaurants in the host city of Basel, Switzerland. Many people had commutes of up to an hour. For exhibitors, costs escalated dramatically following the approximately $500 million renovation of Messe Basel. On top of that, exhibitors said there was pressure to spend even more money on improving their booths’ appearance and size in exchange for better locations.
The drop in attendance was quick and dramatic, and the friction came to a head at Baselworld’s 2017 press conference. There, organizers claimed that a 13.3% decline in exhibitors was due to the managing organization “turning away” those that did not meet a set of undefined “criteria.” One official criticized those that had left — particularly fashion brands — saying the jewelry and watch industry would be better off without them.
After that performance, the number of Baselworld exhibitors plummeted by roughly 50% for 2018. In July, the fair’s largest exhibitor, Swatch Group, abruptly pulled its watch and jewelry brands out of the show. In an interview with CNBC, Swatch Group CEO Nick Hayek described the organizers as arrogant and snobbish.
New management has taken over Baselworld and is trying to change this perception. It is also working with the hotels and restaurants to lower prices. However, there is a long way to go. Attendance for the 2019 fair came to 81,200, a 22% drop from the previous year, according to the organizers.
A similar trend has hit JCK Las Vegas. When the show opened in 1992, it was an instant hit. There were three reasons for this: Its timing in early June was perfect for Christmas-season orders; Las Vegas was made for the convention business; and the city was affordable. This allowed the show to become the largest jewelry trade fair in the world for a time, spawning a number of affiliated shows for the luxury sector.
But Las Vegas, with its push toward luxury and its recently installed “resort fees” at hotels, is no longer affordable. JCK also never fully recovered from the hit it took in 2009, following the economic crisis. Its move from the Sands Expo, a prime location in the center of The Strip, to the Mandalay Bay Convention Center three miles south didn’t help. Exhibitors and attendance fell and still haven’t recovered to pre-recession numbers. This year, the show returns to the Sands, but the effects of that decision remain to be seen.
Lack of focus
Another issue for large shows is a lack of focus. They have everything under one roof, but if there is a focal point, it tends to be on the largest companies and brands. Independent jewelry and watch designers often get lost in the size of the venue and the amount of business being conducted.
Las Vegas, which hosts approximately 10 trade shows during what has become informally known as Las Vegas Jewelry Week, is dominated by two trade fair companies with different approaches. Reed Exhibitions owns JCK, which has an average of 2,300 exhibitors and 23,000 attendees. Emerald Expositions, meanwhile, owns several smaller, targeted fairs: Couture, which hosts some 200 “curated” exhibitors and 4,000 invited buyers; the Las Vegas Antique Jewelry & Watch Show, with approximately 400 exhibitors; and CoutureTime, which has about 33 watch exhibitors.
Lately, Emerald Expositions’ focused approach has given it the upper hand. This year, it is unveiling Premier, a new jewelry fair in Las Vegas targeting independent designers and established small to mid-size brands and manufacturers. The event will be part of an umbrella concept called “The Collective” at the Las Vegas Convention Center, along with two other fairs: the Las Vegas Antique Jewelry & Watch Show, and the American Gem Trade Association (AGTA) GemFair Las Vegas (which until now had been partnering with JCK).
This new ensemble aims to provide an affordable alternative to larger trade shows, says Gannon Brousseau, senior vice president of Emerald Exhibitions and manager of its jewelry division. One badge provides access to all three shows, and there are no barriers separating the events.
Of course, even this more targeted approach may not always work. For example, Carat+, an Antwerp diamond show that debuted in 2017, announced it was postponing its 2019 edition, citing “declining commitment of buyers and sellers.”
A new model
The model for large trade shows that offer everything for everyone appears to be dying. However, there are some successes. VicenzaOro has benefited from new ownership by the Italian Exhibition Group, which has pumped money and resources into the twice-yearly fair and developed a more creative layout. The September Hong Kong Jewellery & Gem Fair by UBM Asia is also doing well, thanks to China’s robust economy and to organizers’ efforts to make the event affordable. Indeed, creating affordable fairs is vital to trade shows’ survival. Smaller, focused events like Couture and Inhorgenta Munich also have an advantage, even if Couture’s costs are greater than JCK’s. This may be the model of the future.
Image: ShutterstockArticle from the Rapaport Magazine - June 2019. To subscribe click here.