Tradeshows, Millennials and Other Hopefully Related Topics

SIA’s show in Denver last week was the third trade show I’ve been to this year (the only three I’ve been to, and that’s quite enough) where the millennial generation was discussed and analyzed and their importance acknowledged.

You should know I was one of the people discussing them at a speech I made in Denver. In my defense, I acknowledged that while I was willing to offer some conjecture as to their circumstances, motivations, importance and impact, I really didn’t have much of a clue about what a group of 18 to 34 years olds wanted or thought.

This was driven home too me when I had lunch with a client. He’s 32, and described reading about how some 18 year olds were using certain apps and/or social media. He said he had no idea what they were talking about. What, then, is my chance of “getting it.” Or yours if you’re even within a decade or two of my age.

This was further highlighted when I attended The Assembly the day before the show opened. Put on by the winter resort community, the purpose of the daylong conference was to discuss the issues and opportunities that winter resorts face. One panel included four older white gentlemen (I’m one of them, though I wasn’t on this panel) talking, in part, about millennials. They had the same problem I have for exactly the same reason.

So my question to them, and to all of you, is “Where were the millennials? Why aren’t they the ones on the stage?” It seems an obvious thing to do. I would love to run a panel with one millennial from an ad agency, one responsible for marketing at a company, maybe the web/mobile designer from another, and perhaps some random hipster from off the street. I think I know what a hipster is. And if some of these panelists weren’t white and weren’t male, I’d be fine with that too. In fact, we need a bigger panel and more time than is usually allocated to these things if the topic is as important as I think it is.

My first question would be, “Is there any chance I’m likely to ask you a relevant questions?” No idea what I’d do if they say, “no.”

Meanwhile, the show itself was busy, but subdued. That’s my word, but I got a similar characterization from enough other people to think it’s a valid characterization. That doesn’t necessarily bother me. The role of trade shows in getting orders has changed.

In the first place, I’m told and have seen that the quality and value of the regional shows has increased. Then there’s the fact that there are simply fewer independent specialty winter sports retailers to show up. We all know about the extent of the fallout there. I also know that much of the business between brands and larger chains is done before the show or in other venues.

That doesn’t make SIA less important. It’s the only national winter sports show where you can see the whole industry represented, and it’s critical and cost effective for new and smaller brands. I understood there was something north of 150 new brands at the show.

Speaking of cost effective, we all noticed that Burton, Mervin Manufacturing and Billabong chose not to exhibit at the show. Mervin, I’m told, rented a couple of hotel rooms at the Hyatt to do what business they had to do and Burton took over a club called City Hall that’s a 15 or 20 minutes’ walk from the convention center and basically set up their booth there.  I went to the party they threw Wednesday night, and it was quite an impressive space. But not, I’d have to say, convenient for retailers.  Anon did have a booth at the show as did Burton’s Learn to Ride program.

Given the changing role of trade shows, I’d have to believe there was a financial component to the decision. We don’t have any public numbers for Burton, but we have some for Mervin which Quiksilver released when the company was sold to Altamont. Here’s the article I wrote about those numbers at that time.

We don’t get to see how much they spent on trade shows, but we do see they had a gross margin of 52.7%. Just to pick a number- and this is my wing and prayer, off the cuff, wild guess number based on some experience with trade show costs- let’s say Mervin spends $220,000 all in to go to the show. They need sales of $417,000 to generate that much gross profit.

Given their customer base, the regional shows, current buy/sell cycle, the utility of the internet, the decline in independent specialty retailers, and the market position and perception Mervin has built up over 25 or so years, how much do you think Mervin’s sales will decline by not being at the show?

It’s not quite that simple of course. They had people walking the show, spent some money on the hotel rooms, and even if there’s no impact on sales this year, is there a longer term importance to attending? On the other hand, aside from the hard dollar costs of attending the show, the process of getting ready for it requires many, many hours of employee effort.

I see the hand of Mervin’s new owner Altamont in this decision. They might tend to be a bit more financially focused and require more convincing to see the trade show value proposition if my numbers are at all reasonable.

Back at The Assembly, Bill Jensen, former Intrawest CEO, presented some troubling numbers on the 470 U.S. winter resorts. He’d classified them into five classes based on certain financial and operational characteristics. At the bottom of his list were 150 resorts he classified as “Sunset,” by which he meant they weren’t likely to make it in their current configurations. No, he didn’t say which ones they were.

Obviously this is troubling as I suspect these 150 include a lot of resorts where people initially learn to board and ski. But it was refreshing that somebody of Bill’s stature in the industry was willing to put something that ugly front and center.   As you know, I’m also in the group who believes in speaking unpleasant truths. You can’t deal until you acknowledge.

Finally, the show brought the announcement that David Ingemie was stepping down as President of SIA next year after, uh, well, a whole lot of years in that position. 39 I think. He says it’s not retiring, and that’s fine with me. David cannot retire.

I’m not sure when I first met David, but I first became aware of him in 1991 about a day and half after I’d started working for Nitro. The marketing guy came in and told me I had to sign the check to secure our space at the trade show next February. This was in May I think.

I was new to the industry, but one thing I had quickly figured out was that it was spring in the snowboard industry and we were broke. And some guy named Ingemie from some group called SIA wanted the egregious sum of $3,750 for something that wasn’t going to happen until next year.

After they talked me down, I signed the check. I think I managed the cash flow issue by not paying Transworld for some ads for a while- an honorable industry practice at the time.

Anyway David turned out not to be trying to bankrupts us and to have the best interests of the industry at heart and be available to help however he could. I know David won’t disappear, and I will look forward to what he has to say once he’s no longer President. David, I’m available to help you edit your book.

 

10 replies
  1. Carlos R
    Carlos R says:

    Great observations Jeff. I wonder what you think about the message that Burton, Mervin and Billabong are sending to SIA? Is the model not sustainable or efficient for brands, even big players?If it is not a place of business because brands get their big orders in different venues and times, is this more of a display for the industry to see what is new and trending? I feel what is happening is this industry thrives on creativity and innovation and a large exhibition center does not allow for much of that. In my experiences at SIA I felt that there were a lot of people not stoked to be there and with good reason, these are outdoors men and women and you have them caged for 3 days with crappy, overpriced food and artificial light. I have some ideas but I am curious about your opinion 🙂

    • jeff
      jeff says:

      Hi Carlos,
      Well, yes it’s partly about getting everybody together and seeing what’s new. Always has been. And business gets done even when it’s not just retailers buying from brands. SIA is different from other shows to the extent that it’s owned by the members and is the only national, winter sports only show. The problem, as I’ve said before, though perhaps not recently, is that there are simply too many trade shows. If some of these shows went away, I don’t know that the industry would feel a need to replace them. I wonder if the decisions of Mervin, Burton and Billabong aren’t an indication of companies starting to understand that. Yes, bad food in the convention center.

      Thanks for the comment,
      J.

  2. jurgen
    jurgen says:

    Great view point Jeff.

    Trade shows were always about established and new retailers connecting with management of existing vendors and looking for new up&coming brands. I wonder if there were as many new retailers as new brands at the show? If the big brands can take care of biz with existing dealers outside of the show and there are not enough new retailers to sell to, why be there?

    Good seeing you at expo!

    • jeff
      jeff says:

      Hi Jurgen,
      AT least in the case of SIA, because it’s the only time the whole industry gets together (especially when the resorts were represented as they were this year). But your point about new retailers connecting is a good one and I have to believe there’s less of that going on. Yes, I was glad to run into you at Surf Expo.

      J.

  3. Jeff_Fan
    Jeff_Fan says:

    I come from the bicycle industry, and love reading this blog…we have had the same exact conversation about our U.S. show for years (It’s called Interbike). I have attended the show for over 25 years, it has gone through various owners and management teams, but the same issues are around. I am at a brand now where I made the decision to go back to the show this past fall, and while we technically ‘paid for it’ with pre books/sales, I am still on the fence of if it was a wise decision. In the bicycle business, (we cater to mountain bike cyclists) the wave of the future is events around the country, trail head rides, demos, visiting dealers with some millennial driving around in a sprinter, showing the products, letting real people touch and feel the products, go for a ride, etc…We do not have this, it is what I strive for as the marketing manager, but this, to me is really reaching the customers vs a trade show in vegas. A

    As you said, the show does give you a chance to network, strike deals with industry partners that you might not see otherwise, see some new products, etc…but, at what cost? We have other big race events that have a similar vibe, and we are outdoors doing it, I like this better. The trade show debate for us wages on, and they will always have customers, but, much like Burton, Mervin, etc, our big players have began to really bow out, in mass (Trek, Specialized, Shimano, etc…).

    As a mountain bike industry professional, I can’t help but see the silver lining for us, which is more ski resorts turning to bike parks to recoup the winter losses, it is has been happening a lot in the last decade, and has been great for business.

    Thanks again Jeff, for creating a dialog and letting us all have an opinion.

    • jeff
      jeff says:

      Hi Jeff,
      I attended Interbike two years ago. I like your idea about other kinds of events substituting, in some ways, for trade show. I wonder, though, if those aren’t more consumer focused? Not that consumer focused stuff is a bad idea, but I’m not quite certain how to mix that with the industry networking and mixing deals.

      Whether or not to attend traditional trade shows is a company by company decision. I am pretty sure they are less valuable to the larger companies, and it sounds like it is the same in the bike industry. I don’t see why it wouldn’t be. I’ve been saying for years that there needed to be a different kind of trade show, but I’ve never really come up with a cogent explanation of what that means.

      Thanks for the comment,
      J.

      • Jeff_Fan
        Jeff_Fan says:

        You are correct, in inter bike is an industry trade show (they recently added a consumer element, at the outrage of brands, some, but, you could count on one hand the consumers at the show) and right that those other ‘key’ events are reaching consumers (trail head demos, etc…) but there are events, like the Sea Otter Classic, which is a RACE event, that has grown into an industry gathering, a place for product launches, that I feel are a much better experience, that is real, tangible, and CHEAPER. Also correct in each company is different in their needs, trade shows will never die, but, old practices in place and grandfathering in old shitty trade show budgets seems to be the norm. I’d prefer to use our show budget on other things, but Sales and I argue about that, over beers of course. Have a nice weekend.

        • jeff
          jeff says:

          Jeff,
          I’ve made the argument, starting years ago, that the right established, respected brand could get by with fewer trade shows. But they’d have to announce right after the show that they wouldn’t be attending the next year. If you do it too close to the show, people think you’ve got problems. You do regional shows, Maybe one major show (sia if you’re snow) and meet you large customers somewhere else. I agree with you that show budgets are habits bordering on reflexes and people are just scared to change. The point of all the options you’re describing is that different brands need different venues. I guess the path of least resistance is going to the shows.

          Thanks for the comment,
          J.

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