Trade Shows in General, Denver, SIA, ShopTalk, and Other Random Musings

There is a certain level of irony in my having left the Outdoor Retailer/Snow Show in Denver last Friday as the temperature was approaching 60 degrees and come home to Seattle where, today- so far (still coming down hard)- there’s three plus inches of snow on the ground and the temperature isn’t projected to get over freezing.  Hope it continues in the mountains as it slacks off here.

Trade shows- whatever shall we do with them.  It’s not just our industry that’s wondering.  Emerald Expositions, the owner of Outdoor Retailer, Surf Expo, Interbike, and the Snow Show as well as shows in multiple other industries has to be wondering.

Emerald went public (symbol EEX) on April 28, 2017 and closed the day at a price of $19.50.  As I write this on February 7, the price is $14.25.  Emerald’s strategy, as described in their SEC filings, is to consolidate the highly fragmented tradeshow industry.  It’s a good strategy as long as they can find trade shows worthy of being consolidated in an industry experiencing high uncertainty and change.

What do we go to the show for now?  One successful retailer said to me, “Jeff, where else will I find new brands?”  As long as the small, really new brands are actually at the show, he’s right.  From that point of view, I suppose bigger is better and more efficient.  Wonder where the bike show will land.

Face time with people you don’t see that often to solve problems and build relationships is the other reason I can think of.  I also like seeing friends I don’t see often enough.

As I’ve said before, SIA’s timing of the sale of the trade show to Emerald Expositions was absolutely prescient.  They would never get now the price they got then.  But now what do they do?

I guess SIA has north of $17 million in the bank and have to figure out how to use it to the benefit of the industry.  They’ve cut membership fees since they are no longer subsidizing a trade show.  We certainly need an advocate that represents the brands and retailers in the winter sports business.  SIA members who exhibit are getting a $2.00 per square foot discount off standard show rates.   I haven’t been to the on snow in years but think it’s valuable. Reliable research (I stress reliable) is valuable and necessary as well.  There might be a role for SIA teaching it’s members how to make good use of it.  My experience, as well as what I’ve heard, is that many member companies are resistant to using it.  Once that might have been okay, if kind of hard to understand.  Now, I don’t really think you have a choice.

Getting value from SIA no longer means the kind of cost-effective trade show we had when SIA ran the show for the benefit of its members.  How does that old song go?  “You don’t know what you’ve got ‘till it’s gone.”  Not to carry the analogy too far, but we’ve kind of “paved paradise, put up a parking lot,” trade show wise.

Consolidating SIA with OR was long overdue.  We save money going to one show instead of two and we all figured out long ago that snow sports are part of the outdoor industry.  Maybe that makes up for the fact that it’s getting more expensive to go to the show.  Emerald Expositions, remember, is a for profit public company so what did we expect would happen since we don’t really have an alternative?

Last spring, I didn’t even get the usual invoice from SIA.  But I’m so well trained after so many years that not getting that invoice caused me anxiety.  I renewed on the web site, then found out that free entry to the show was over.

What will I do this spring?  Not quite sure.  Neither are some other people given the conversations I had at the show.  SIA is supposed to be working on some new initiatives and I will look forward to seeing what those are.

SIA and its members are figuring out what the mutually beneficial value proposition is.  That wasn’t necessary when you had to join to exhibit at a show you really didn’t have a choice but to be at.

Meanwhile, at the show:

Burton wasn’t exhibiting, but this isn’t the first year that’s happened.  Wonder if they had a show room/place for a party like in past years.

Mervin (Gnu/Libtech) wasn’t there either.  Years ago, I made the argument that their competitive positioning and distribution didn’t require them to be there as long as they announced it in advance and made it clear it was a positive, marketing strategy, step.  They didn’t do that.

I might argue that Never Summer could do the same, but as a Denver company, the cost is way lower for them to attend the show.  I love brands who’ve been careful to maintain the same strategy and distribution philosophy forever.  As long as it’s one that working.

Speaking of companies that have had the same (in my judgment correct) positioning strategy forever, Arbor won REI’s brand of the year award.  It was announced at the show and founder Bob Carlson made an excellent speech.  Wasn’t there- I read it.  I thought the most important thing he said (besides “thank you”) was that Arbor had always considered itself as part of the outdoor industry.  That ethos has always guided the brand and continues to allow it to move beyond its action sports roots.  Also makes it a hell of a fit with REI.

Bob was my first consulting client back in 1995.  I must have done a great job.

Hey- was I the only one who thought the show was full of dogs?  Just curious.  Retailers with emotional support animals maybe?

The Ride Snowboard booth was really small, where it historically hasn’t been.  Good for them.  I imagine they gave up nothing except the opportunity to waste some money.

Sector 9 longboards were there in a booth labeled “reconstruction.”  The exceptionally good news was that co-founder Steve Lake is back running the brand.  Some fool gave Steve, and everybody else in the booth, hammers.  They were all wearing red highway construction vests and hard hats as an acknowledgement that the brand had some rebuilding to do.

As long as Lake is careful with the hammer, I think they can pull it off.

Igloo, the cooler company, was showing the soon to be introduced Recool cooler.  It’s “…comprised of 100% biodegradable materials and is made in the USA from molded pulp.  The product was created to provide consumers an economical and environmentally conscious alternative to single-use Styrofoam coolers.”

You’d recognize the material if you saw it, though of course it’s reinforced with a binder to make it hold up.  It won’t last for centuries like Styrofoam (mostly in a landfill), but it will get you through your trip and at $9.99 seems like a great idea.

Finally, back on the subject of the future of trade shows, how many of you have heard of ShopTalk?  It’s not active outdoor focused but appears to have something to offer retailers in any industry.  “ShopTalk,” the web site says, “is where the entire retail ecosystem comes together to create the future of retail based on the latest trends, technologies and business models, including changes in consumer expectations.  You’ll learn in both small groups and large, including sessions, roundtables, dinners and one-to-one meetings. We’ll ensure that your voice is heard and that you get to hear other important perspectives. You’ll connect with your peers as well as potential new partners and engage with a large and diverse audience. We enable much of this with an industry-leading agenda and speaker lineup as well as with networking and collaboration programs powered by technology that brings thousands of you together for tens of thousands of personalized interactions.”

Many retailer issues are not industry specific.  In any event, there can be a lot of value in talking with people who don’t share your perspective.  Take a look at the web site.  Perhaps this is part of the answer to how trade shows should evolve.

Okay, I assume that’s enough random musings.  See you at the next trade show, wherever that is and whatever it looks like.

 

 

 

 

 

 

 

 

 

 

 

 

What Caused Shopko to File for Bankruptcy? Two Parts to the Puzzle.

Last Wednesday Shopko, a general merchandise retailer with 333 stores, filed for chapter 11 bankruptcy.  On January 17th, SGB Media published an article on Shopko and the filing by Thomas J. Ryan with the title, “Shopko Becomes Latest Casualty Of Online Disruption.”

I took umbrage at the suggestion that online disruption was the primary cause of the filing.  It’s not that there wasn’t any online disruption.  Every retailer is dealing with some online disruption and how they manage it will determine if they survive.

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What Happens When the Apparel You Buy Fits Perfectly Every Time?

Technology that has value tends to get better and cheaper.  I can’t think of a reason that won’t be true for the Zozosuit.

“Japanese retailer Zozo, which operates Zozotown, the country’s largest online fashion marketplace, has developed a figure-hugging bodysuit featuring lots of uniquely patterned dots.”

“As you turn slowly round, your smartphone takes photos, building up a 360-degree image of your body shape. Then you can order clothes that really fit.”

There’s one problem with this new technology.  As you’ll hear when you watch this short explanatory video, it doesn’t quite work.

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It Probably Wasn’t the Plan; Abercrombie & Fitch’s November 3rd Quarter.

Back in 2012 A&F had 946 U.S. stores.  They ended the most recent quarter with 684 (plus 195 international stores).  In the immortal words of Gary Schoenfeld in his first earnings conference call as CEO of Pac Sun however many years ago it was, “Nobody needs 900 Pac Sun stores.”

Nobody needed 946 A&F stores either.  Given how the retail market is changing, the 28% reduction was probably a great thing, if not part of the plan.  It’s even more interesting to note that 400 of the U.S. stores are Hollister and only 284 are A&F branded.  Those of you who have been around a while may remember, when Hollister opened (the first store was in 2000), that as an industry we were pretty dismissive of the concept.  Don’t know if that’s because we didn’t think it would work, were afraid of it, or wished we’d thought of it first.

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Popups, Extra Week, Higher Costs; Tilly’s Quarter

Tilly’s sales for the quarter ended October 28th were down 3.9%, or $6 million, to $146.8 million from last year’s quarter.  However, the decline was due to “…the calendar shift impact of the 53rd week in fiscal 2017’s retail calendar, which caused a portion of the high sales volume back-to-school season to shift into the second quarter this year versus the third quarter last year, reducing last year’s comparable net sales base for the third quarter by approximately $14 million. This calendar shift impact was partially offset by higher comparable store sales and net sales from seven net new stores totaling approximately $8 million.”

Keep that $14 million in mind as you think about the quarter over quarter comparison.  That decline for the quarter was partly offset by seven new stores and higher comparable store sales (4.3%-  includes e-commerce) totaling $8 million.

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Attacking the Retail Challenge: Zumiez’s Quarterly Results

I’ve decided that my best recent article was “How Brick and Mortar Retail Has to Change,” written last June.  I was surprised it got so little feedback.  Probably because the list of what customers don’t need us to do anymore is a little intimidating, and we aren’t sure how to respond.

Even if, like Zumiez, your plans are responsive (as I see it) to the changing conditions, there’s still going to be a recession (not just in the U.S.), there’s too much product and manufacturing capacity, too many brands, too much retail space, too little product differentiation, and many customers have too little income.  And they have to spend more of that income on necessities.  I guess a cell phone is a necessity.  Certainly housing, food and health care are.

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What if Our Customers Just Don’t Have as Much Money to Spend?

We spend an awful lot of time trying to figure out how to sell our customers more stuff.  It’s been tougher lately and shows no signs of getting easier.  It’s the internet.  Or over supply and too much retail.  The customer wants experiences.  Poor distribution.  No product differentiation.  Too many brands.  A smarter and more cynical customer.

It’s all of that.  But maybe some of it wouldn’t matter as much if our customers just had more money.  For all of us the millennials, however we define that group, are an important group of customers.  But between lower wages, the gig economy, debt from college, health insurance costs, high rent and the requirement of having cell phones and sundry other necessary gadgets and services, perhaps they just can’t afford what we’d like to sell them.

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The New Company You Are Building as the Competitive Environment Changes (and Changes, and Changes)

Over years, I’ve written various articles about the evolution of our market and how we need to change to address it.  I’d decided it was time to pull all those ideas together in one, hopefully, thought provoking, insightful, action motivating piece.

Then a friend sent me Robin Lewis’s outstanding article on just this issue and I had no idea if I was relieved I didn’t have to write it or disappointed I didn’t get it done sooner.

Mr. Lewis’s article is called “First, The Bad News. Then 2019: Tough, Tougher or Toughest,” so don’t feel like you’ve escaped my occasionally urgent and cautionary tone on this issue.  He’s not precisely all sunshine and rainbows either.

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Looks Like Amer Sports is Going Private

Back in October, there was some speculation that somebody wanted to buy Amer Sports and Amer said, “Yup, it’s true.  We’re talking.”  I wrote a short article about it at the time.

On December 7th, they confirmed that there is, in fact, a cooperative tender offer coming beginning around December 20thHere’s the link to the press release on the subject.  At that time, a tender offer document with full information will be available.

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Emerald Expositions Cancels Interbike for 2019

Emerald issued a press release today announcing that the Interbike show scheduled for September 2019 was a no go.  Here’s the press release. I excluded the part at the end describing who Interbike and Emerald Expositions are.

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