Trade Shows. There Can Be Only One?

 So let me see if I understand this. At a time when economic conditions are leading us to fewer brands and fewer shops and consumers spending fewer bucks, and those brands and retailers that are left want to spend less money and send fewer people to trade shows, we have more trade shows.   Will somebody please explain to me the economic model that says you increase supply when demand is falling?

I’m sure the people who bring us all Agenda/ASR/Crossroads/Surf Expo would all agree that one show is a great idea- as long as it’s theirs. The snowboard/ski industry can be more efficient in their approach. They have one national (and they might argue international) show followed by smaller regional shows. They can do that because a) SIA owns the show and b) they are a one season business. Never thought I’d hear myself giving a reason why the snowboard industry’s seasonality was a good thing.
 
Over on the skate/surf side of things we’ve got two sports, shoes, and a lot of apparel sold to non participants, and shorter product cycles, so if somebody wants to suggest that those differences might justify other shows, I can imagine they can make a reasonable argument.   Still, it seems like a good time to talk about the role of trade shows and how it has changed. And how it hasn’t changed.
 
It’s Still About the Retailer- Isn’t it?
There wouldn’t be any trade shows if retailers didn’t show up. I know there are other reasons to go to trade shows, but without the chance to see and sell to customers, brands aren’t going to want to shoulder the cost and effort of a show. That, at least, should be pretty non controversial. Let’s talk, then, about how retailers are best served.
 
At the risk of oversimplifying, they are best served by having to go to the fewest possible shows for the fewest days it takes to get their work done and seeing the most brands in the industries they are in. As I said, that doesn’t necessarily mean one show- issues of seasonality and geography may make it logical to have others, but having shows in related industries that run essentially at the same time and in the same place seems counterproductive. If you’re a local retailer, maybe this isn’t too much of a hassle. I once heard a retailer tell an industry person, “Hey, if you put on that show, we’ll come.” He wasn’t saying, “That’s a great idea! We need another show.” He was saying, “Oh what the hell, we’re located here anyway, it’s not much of an inconvenience, it won’t cost much, and I need to see those brands, and these guys seem determined to do it whether I want them to or not.”
 
Retailers also want to see new brands and get the “vibe.” I wouldn’t want to have to define that, but we all know what I mean. I think they can do that better in larger shows with more brands and retailers. And while I acknowledge that the vibe is different in skate than in surf, I’d remind everybody that the skate shoe business has become the casual shoe business, we’re increasingly in the fashion/apparel business, and most of our sales as an industry are to people who are not participants in the sports- especially in surf. That’s the reality of the selling environment most of our retailers deal with. If shows are going to help retailers make good buying decisions, and thereby stay relevant, doesn’t it seem logical that they should reflect the selling environment the retailer has to operate in? All trade shows might start from that perspective as they consider changes/improvements in their shows.
 
Trade shows have also become less important to big brands and retailers, and more important to small ones. I guess I should say that’s my perception and not state it as a fact. Less buying for large brands and retailers happens at shows because large brands are servicing large retailers much better outside of trade shows than they use to. The internet and cheap to free communications has played a role in this. It’s also true that the percentage of sales to small retailers has declined for big brands.
 
The trouble is that the big brands, with their huge footprint and big trade show budgets allowed the trade show producers to spread their overhead and effectively subsidize the smaller brands. But the recession, and the evolution I describe in the paragraph above, changed that.
 
How Did We Get Here?
IN THE BEGINNING there was ASR (I don’t know what the first show was- just go with me here). And the snowboarders, skateboarders, and surfers looked and saw that it was good. Also, it was their only choice. And they said, “Let us go forth to the temple [convention center] and use our many shekels to build altars up to the sky [trade show booths] that we may convert the consumer, gain market share, impress our competitors, and act 10 times bigger than we really are. And they smoked burnt offerings and saw that it was fun.
 
Then the prophet Ingemie came down from the snowy mountains and spake to the snowboarders saying, “Nothing shall ye sell in September, and only one show can you afford anyway.” And they saw that he was righteous, and made a great pilgrimage unto the desert, and lay down with the ski companies and made offerings to the gods at the many altars there, for the acolytes gave them free sacramental wine.
 
Then the God of Commerce sent the twin plagues of oversupply and lack of product differentiation, and they were laid low. Most of them had just been hoping to get laid.
 
But the skaters were unafraid. “For the third time, we have risen from the dead, but we have been perfumed and no longer stinketh, and are beloved of parents and park and recreation departments everywhere.” They chose as their symbol The Hawk, and it was much worshipped in the land. Their followers multiplied beyond reason, for the skaters were cool.
 
In their sanctuary in the land of Cabo, the surfers gathered and were troubled. “Who are these skaters who are said to be cooler than we and who try to take from the people the offerings that were surely meant for us?”
 
They didn’t have to be troubled for long.
 
For the high priests of the skaters had sent forth a decree so that all would know and love the skateboard. “Of Canadian maple shall thy deck be made with from 7 to 9 plies. Neither six plies nor ten plies shall it have.   Of no other wood shall it be constructed and whoa be to he who uses other materials or technologies.” And the high priests sent out unto the land the lesser priests (team riders) to carry the message to the faithful. There was a plague of advertising and promotion and the high priests grew content.
But the God of Commerce saw their hubris and said, “The high priests of skate have turned their faces from me. For I have sent unto them a great market, and they have prospered, but have forgotten the humble consumers, who are the true gods of commerce and always get what they want.”
 
Then the God of Commerce did send forth a disciple to the Land of Buddha. And he gathered followers and lifted up their faces saying to them, “Behold! I bring you great tidings of a new market. Surely you whose labor costs are lower than the belly of the serpent crawling upon the firmament can help the humble consumer?”
 
Then the people of the Land of Buddha saw clearly. And so they spake: “If we can manufacture integrated circuits, we sure as hell can make a skateboard.”
 
And they made many. And the prices were low. The high priests of skate were visited by a plague of blanks and shop decks. And they saw that they were fucked. There was much wailing and gnashing of teeth. But many consumers rejoiced. For they could spend fewer shekels to do what they loved.
 
Then the surfers rejoiced. “See!” they said. “The skaters are struck down but we are still mighty and definitely cooler than they are for people still flock to join our church though they live in Oklahoma.”
 
The God of Commerce heard this and sent surf boards from the Land of Buddha as a warning, but it was not heeded. And when skate, surf, and snowboard product had covered the world, even unto the land of Costco, the God of Commerce said, “Oh the hell with it,” and he sent The Great Recession.
 
Reboot
I’m sorry about that. I wrote “in the beginning” actually meaning to talk about trade shows but it just got out of control. Can’t wait to see what the editors do about this. How can I recover?
 
Trade show companies want to make money.   So do brands and retailers. So do I. Nothing wrong with that. How do you make money as a trade show? One way to do it is to charge more (and provide more services) when times are good and everybody is focused on revenue growth and market share and not quite so focused on expense management. You can be more efficient because you’ve got more exhibitors taking more space and you’re spreading your overhead. We all spend a lot of time figuring out pricing and try to charge a little more from time to time if we think conditions permit it. Why wouldn’t a company putting on a trade show do the same thing?
 
Suddenly times get a little tougher. Either for skate, or for surf, or for snow, or for everybody. Some brands decide to reduce their booth space. Retailers don’t bring as many people. Maybe one segment of exhibitors feels that the show isn’t quite supporting their needs or is favoring the other segment. Not that that would ever happen in our industry.
 
The trade show, with its revenues squeezed, may initially raise its prices. This, of course, just makes the problem worse. This is an especially big problem for small and new brands that had previously, to some extent, been subsidized by the larger brands. Ultimately, the show has to cut services. Brands who already thought the show was too expensive or that it wasn’t meeting their needs see this as proof that they are right. They may pull out or reduce their presence further.
 
You can see we’ve got a huge negative feedback loop going here.
 
Meanwhile, to meet what they see as a demand, somebody rents a hotel or puts up some tents and has a trade show. The brands say, “Hey, we can afford this!” and some of them who are unhappy with the big show or don’t think they can afford it, flock to these shows. This, of course, makes it even tougher for the big show, reinforcing the negative feedback loop and, by the way, making it tougher on the retailer.
 
Maybe at some point the big show starts to lose money. They don’t like that. They cut everything they can, invest as much as they can afford, but the negative feedback loops keeps working. Finally they say, “That’s it, we’re done.”
 
When that show goes away, you have probably lost most of your retailers who came from out of the country or even from out of the local area. And I am certain there would immediately be pressure on some small show to expand to meet demand. Guess what will happen?
 
The growth process will be painful, and when it’s done the little show will have to be in a convention center somewhere and guess what their cost structure will look like? It will be just the same as the old big show and the whole thing can start over again.
 
And the retailer, who’s suppose to be the most important reason for having these shows, will have been jerked around and inconvenienced. Don’t we want to make it easier for them to see and buy product- not harder?
 
I don’t care how it happens or who does it, but there needs to be one main trade show. If you believe that shows are for the benefit of retailers, I don’t see how you can disagree with that.

 

 

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