Can’t Live With Them, Can’t Live Without Them; Trade Shows, That Is

Or maybe all of these.

 

Still, wouldn’t it be great if there were just one giant trade show a year for action sports? You’d go for a few more days and order all the snow, skate surf, accessories and apparel you needed for the whole year and arrange for it to be delivered when you needed it. And all the suppliers would make sure it all came on time and complete. And all the retailers would get their orders in on time and pay their bills on time.

 

But since I have a vivid imagination and it’s not going to happen quite as I describe it, let’s look instead at the current trade show environment and how retailers might react to it.

 

 

It’s a business. Let’s start from there. The people who bring us Vegas, Outdoor Retailer, Action Sports Retailer, ISPO, Supershow, the regional shows and the consumer shows want to make a buck. With the exception of SIA, they are for profit organizations. SIA wants to make a buck too, but they use the money they earn to support snow sports industry consumer marketing and that’s a good thing. Still, they all, including SIA, are to some extent competing with other trade shows and they all want to prosper.

 

When the number of snowboard companies exploded, SIA boomed. ASR lost exhibitors who decided they didn’t need (couldn’t afford?) both it and Vegas. ASR took off again when skateboarding went crazy, and SIA shrank as the winter sports business consolidated. Outdoor Retailer drew some snowboard business as the action sports business homogenized a bit and brands wondered how to reach a wider market.

 

SIA moves the Vegas dates to January 29^th through February 2^nd to make it a kickoff show. Suppliers wonder how to do Vegas, ISPO (February 2^nd to 5^th), and NSIA (February 10^th to 13^th). I heard a rumor that cloning of sales managers is under active discussion. When’s the main Japanese show anyway?

 

The SIA move, of course, changes the dynamic for the increasingly successful regional shows if they are no longer the first place a lot of retailers see new product. But of course SIA isn’t the first place where major retailers are likely to see product. Suppliers will arrange private showings for selected customers even earlier. Meanwhile, too many retailers aren’t making enough money and there’s a recession brewing (maybe) with its potential impact on consumer spending.

 

To top it all off, Surf Expo, known for its East Coast shows, is planning a new surf apparel show for Anaheim, California in March 2002 and ASR, apparently in response, announced it is planning a new show as well for the same time. What a coincidence. Both would be focused on retailers writing back to school orders. Magic, of course, has been trying to add a board sports section to its show.

 

But wait! As I write this, a press release from SIA dated May 23^rd has announced that SIA Board Chairman Hugh Harley and the SIA staff has held a meeting with the five professional sales rep associations “…to review the revised show schedule for 2002 and to work through various issues regarding the new buy/sell cycle.”

 

SIA President David Ingemie says the meeting focused on how a beginning of the season trade show is different from one at the end of the year. “It was nuts and bolts oriented,” Ingemie said. Teams of suppliers, retailers, and reps focused on ways to make the show better for everybody. Since there’s general agreement Vegas won’t be a writing show, they discussed things like digital workbooks that retailers could take with them to use in reviewing and managing product line information prior to ordering. They worked on getting food delivered to booths if desired (Say, if we could just get cots and portapotties in there, nobody would ever have to leave the booth, and think of the money you’d save on hotels).  

 

Trade show organizers have two sets of customers. The exhibitors, who pay the bills, and the retailers, who the organizers have to have show up if they want the bill paying exhibitors back. But the interests of those two customer groups aren’t necessarily the same.

 

So- more tradeshows, more complex customer groups based on broader lifestyle considerations and not just a sport, a possible recession, and retailers interested in cutting the cost of trade shows- not increasing it.

 

Doesn’t more tradeshows for the same products if the number of retailers isn’t growing and business is very competitive translate, on average, to fewer retailer days at each show?

 

In the mid 90s, snowboard companies sprouted like mushrooms on damp, warm, spring days (you should see my lawn). Each knew there wasn’t enough room for everybody, but assumed it would be the other guy who would take it in the shorts. People rush in when there’s perceived money to be made- in snowboarding or in trade shows.  

 

I’ve talked before in Market Watch about competitive dynamics, and the possible dangers of competitors reacting too much to the action of other companies instead of focusing on what their end customers want. A new show gets announced. Some suppliers commit to going. Other suppliers worry that people will talk if they aren’t there, so they decide to talk. Retailers start to wonder if they will miss seeing new styles and products they should have. Pretty soon we’re all off to a new show.

 

What is the cost of a new show to suppliers? Travel and lodging, the booth, rep time and expense, the development of a new product line and samples for the show, loss of time. That’s a lot of money. If you’re going to, defacto, create a new product cycle and introduction you better feel strongly that it will increase sales.

 

And there’s the rub of course. It may not increase industry sales, but it may increase your competitor’s sales if they attend and cost you sales if you don’t. What’s a retailer to do?          

 

 

Retailers, of course, aren’t just snowboard retailers. They are selling skate as well. Or surf. Or camping. Or rock climbing. Or skiing. Which means they have more than just winter shows to go to, and that complicates the picture. Still, there are some things they are all doing, or ought to be doing, to make management of their trade show schedule and open to buy a little easier, and maybe less financially painful.

 

That process begins with the recognition that things aren’t changing in snowboarding as quickly as they use to. You don’t have to go to Vegas to figure out which of the 150 new brands you are going to carry. In fact, you probably know right now (it’s May 2001) most of the brands you will be carrying in the 2002-2003 season.

 

John Coffaney, the Vice President of Merchandising for Any Mountain, a ten shop retailer in central California, agrees that the process of selecting among brands is a lot easier than it use to be. “Twenty percent of the brands we carry get eighty percent of our open to buy, and we know who they are well before the shows.”

 

So you start out knowing most of the brands you are going to buy and having a pretty good idea how many dollars you are going to commit to each. When you go to Vegas in January, what’s your job? Not to place orders, according to Coffaney. For Any Mountain, it will be strictly a looking show. If he buys anything, he expects it to be current year merchandise he’ll use to finish out the season. He’ll meet with supplier executives to discuss marketing issues like coop advertising.

 

The big suppliers he’ll see again at regional shows or at their showrooms, so he’ll spend his time in Vegas checking out other than the usual suspects.

 

Retailers in Any Mountain’s situation should focus in Vegas on the small brands they won’t typically see anywhere else and expect to accomplish two things. First, they can figure out how to use that twenty percent or so (it may actually be a lot less) of open to buy that isn’t already committed. Second, they can troll the backwaters of the show to find the small and/or new companies that offer new products or styles that will help differentiate the store and keep it on the leading edge.

 

SIA President Ingemie points out that seeing new products and brands early in the season, rather than in March, gives you the information you need to accurately do your product planning.

 

Derek Miller, the owner of Bad Boyz Toyz with four shops in the Chicago area, says that’s how he came to order Capita. It was the only place he could have seen it. Besides seeing new brands, what does he get out of Vegas?

 

“Long nights and no sleep,” is his first response. Obviously, I have no idea what he’s talking about. “We look to Vegas to see what’s going on. We’ll write some large lines there, but we’ll lean on the regional shows even harder.”

 

The good news for snowboard retailers may be that if choosing lines has gotten simpler (because there are fewer choices), and this is a preview show where not as many decisions have to be made and orders written, then maybe it gets cheaper for retailers to go there. You don’t need as many people and they don’t have to stay as long.

 

By anybody’s measure, for supplier or retailer, trade shows are expensive. Retailers are looking to reduce that expense. Bad Boyz’s Miller claims he doesn’t know how much it costs to go to trade shows each year. “I’m afraid to add it up,” he says.

 

Any Mountain’s Coffaney has cut trade show expenses using in store presentations and similar mechanisms. He says that as a result, some of his soft goods buyers have not had to attend Outdoor Retailer.

 

He also points to a longer selling season that is emerging for Any Mountain. “February,” he says, “is becoming as big as December. Our open to buy goes up tremendously after President’s Day weekend.”

 

Retailers, of course, don’t want their key people at trade shows during the midst of the selling season. They think they should sell what they’ve already bought before committing to buying more.

 

Originally, I thought the new Vegas dates would be most beneficial to SIA because it made the show a kickoff show and the foundation of the buy/sell cycle. It made the show more relevant again. The exhibitors, I thought, would ultimately benefit from having to get their product acts together sooner and perhaps from some earlier orders from retailers. Retailers would be inconvenienced.

 

But if the retailer’s buying process has changed as I’ve suggested, the regional shows are continuing to improve, and the large suppliers are finding more ways to make it convenient for retailers to see and order product, then maybe we have a win for everybody. Retailers can spend less time and money and do just as good a job ordering. But as you strive to control trade show expenses, make sure you do go to Vegas. If you are a snowboard retailer, this is your show, you need it, and the competitive chaos in the trade show business doesn’t change that.

 

Oh, but then there’s the poor sales managers, who have to figure out how to be in at least two places at once. Maybe for the next Market Watch I’ll check out all those rumors of clones.

 

Jeff Harbaugh has spent 20 years finding solutions for companies managing transitions, the last 10 in action sports. Reach him at (206) 232-3138 or at jharbaugh@email.msn.com.

 

 

SIDEBAR

 

Then there’s the Nixon model of trade show management- don’t exhibit at trade shows.   Since people have no expectation of their exhibiting, not exhibiting doesn’t cause various negative rumors. Of course, they are always there and the product (watches) lends itself to being shown while walking the floor. And even though they don’t have a booth, they have a major presence by being associated with the most important piece of paper at the show- the party schedule.