Speaking of Things That Might Change: Trade Shows and Emerald Expositions
When we do get through the virus and at least some of the economic disruption, I’m wondering what the trade show environment might look like. It had already been changing and it seems pretty clear those changes are going to accelerate.
Emerald Expositions, owner of Outdoor Retailer, Surf Expo and other trade shows, put out a press release April 6 similar in content to those by other industry and non-industry companies. The company said, as previously disclosed, that it was:
“• Carefully managing its expense structure across all key areas of discretionary spending.
- Drawing down $50 million from the Company’s revolving credit facility to bolster cash balances.
- Temporarily suspending the regular quarterly cash dividend; and
- Halting any incremental share repurchases.”
It went on to describe the impact on its business so far:
“To date, Emerald has postponed 14 events, equating to approximately $12 million of 2019 revenue. To date, Emerald has cancelled 23 events, including, most recently, Couture, Retail X, and Outdoor Retailer Summer Market, which accounted for approximately $116 million of 2019 revenue.”
Wonder how many of the postponed events will ultimately be cancelled. Even if they ultimately happen, certainly the schedule of these events in the future will be disturbed.
Trade shows happen tend to happen at a certain time of year because it works for brands and retailers. Would you hold them at another time of year or just postpone to the next scheduled date?
Emeralds total reported revenue for 2019 was $361 million. The postponed and cancelled number of $128 million of revenue is 35.5% of 2019 total revenue. They have event cancellation insurance and are pursuing recovery as allowed by their policies. Apparently communicable diseases are covered. Love to see how it goes when it’s time for those policies to be renewed.
But I guess in the longer term I’m wondering how many of us are going to rush back to trade shows just because we get given the all clear. That won’t just be a personal safety issue. We are all in the process of learning and getting comfortable with new ways to work with each other, and I’ve got a hunch some of those new ways are going to stick, possibly to the detriment of trade shows but arguably to the benefit of the industry.
It was years (many, many years I’m afraid) ago when I first suggested that perhaps a solid company who knew its market and customers might forgo some shows, announcing right after they had attended for the last time and that the money they were putting towards a given show would be reallocated to customer support. Serendipitously, the company I used as a possible candidate for this strategy was Mervin Manufacturing, which for the first time wasn’t at Outdoor Retailer last January.
To some extent, we go to trade shows because our competitors go. As there get to be fewer competitors, social dynamics change, and we get more comfortable with distance working tools, I wonder if we will feel as compelled to go. Even before we got virused, there were fewer, shorter shows, some companies didn’t feel the need to attend and there was a growing consumer orientation.
I thought, and I guess I still think, that actually being across the table from somebody you do business with from time to time is important. But I wonder- if I were 20 or 30 years younger, would I still feel that way? Perhaps this recession (and let’s hope that’s all it is) will accelerate the trends we’re already seeing in trade shows as the millennials assume the management positions.
The other night, I had a Zoom meeting “attended” by, I think 8 people. This was a group of baby boomers and only one person had to be reminded to unmute their mic when they wanted to talk. Okay, it was me, and it’s not my first Zoom meeting.
It’s interesting to watch as people become aware of the dynamics and etiquette of online meetings. Pretty soon, it becomes more normal. Like having somebody else pick out your produce in the market. Which I still think is weird.
The point is, we resist change until we can’t then we get used to it. I wonder what changes in trade shows we’ll adjust to. I wonder when I’ll let somebody else pick out my produce.
It’s funny. Much as the dawn of the Internet in the late 90’s was feared to mean the “end of the retail store or mall” – that is far from what happened, and the mall model evolved to one of entertainment, dining and other attractions for which browse shopping was now less of a draw but still important business. Here, there will be forays into digital events but I will go on a limb and declare boldly that I predict the tradeshow business comes back in a HUGE way – here’s why: people crave human contact now more than ever, and this period of isolation will cause a hunger for personal connection and interaction that, when finally allowed, will be almost malignant. If businesses start relying more on “work at home” and Zoom meetings instead of sales calls, the annual or semi-annual “gathering of the tribe” (of whatever shared experience or business that is – apparel, footwear, electronics, music, etc.) will become even more “not to be missed” – less for perhaps the business to be written there but for the networking, the humanity and honesty of dialogue with customers (especially over a beer or two) and the like. I have no horse in this race but that’s my pretty out there prediction.
Hi Ian,
We seem to agree on some things. Like you, I am pretty sure that personal connections will come back in a huge way. Or at least, I want that to be what happens because I’m of a generation that believes in it. I just don’t think it will be through the traditional trade shows. As I see the industry evolving, I have a hard time seeing them, in their traditional format, have the business value they used to have. Remember what I’ve been saying was going to evolve. Fewer brands, fewer brick and mortar stores, the end of massive unnecessary oversupply. I would add to that the decline of fast fashion and the importance of sustainability and reuse. The basis of competition is going to change. Fewer “me too” products. Actual differentiation based on actual features. More expensive products that last longer. Economic conditions where people are more thoughtful about what they buy. Remember, these were already the trends before the virus- they’ve just been accelerated. We’ve already got fewer shorter shows. Don’t let what I hope is the comparatively short term trend of the virus obfuscate what was already happening in the industry and with trade shows.
Thanks for the comment,
J.
Definitely appreciate the perspective and the intel that you bring to the table, Jeff.
I personally agree with Ian on his points for sure. I also expect that the better Trade Shows including the Surf Expos scheduled in September and January as well as the Outdoor Retail Snow Show in January will cater even more to what the industry and retailers need in the form of outstanding well attended shows. The Stand Up For Retail Webinar series that Emerald is backing sends the clear message that they are here to help retailers and brands in these uncertain times and beyond. We (at Board Retailers Association) are really looking forward to seeing everyone (including you) at the Surf Expo shows and the OR Snow Show.
Doug Works
Executive Director
Board Retailers Association
760-500-5716
doug@boardretailers.org
Hi Doug,
See what I said in reply to Ian’s comment below. Ignoring the virus for a moment, if such a thing is possible, what do you think about the trends I list? Am I out of my mind? Please feel free to disagree. I love a good disagreement! I also hope to see you at one of the shows.
Thanks,
J.
Jeff great take as always. Are you saying the days of spending a couple of thousand dollars to head to the trade show to throw high fives and drink sub-par beer are going away? I feel like I have said this before?
It seems to get harder and harder each year to justify going tradeshows. On the media side of things, all the products have already been seen at regional shows and announced online. I rarely see anything “brand new” at the show anymore. Shorter shows, smaller booths, and major players stepping away should be enough writing on the wall for everyone to see this isn’t working anymore. Did it really ever?
I’m not on the brand side of things but it seems a majority of orders are already placed before the actual tradeshows.
The “Cool” trend over the last 5 years is for brands to forgo their booth cost entirely and exhibit offsite in nearby hotel rooms instead. Mervin as you mentioned left the show a few years back, had a hotel room across the street for “private” showings of their gear. They went back to the shows for a few years, and honestly not sure what happened in 2020. Maybe I didn’t get the invite, maybe they were in Denver? Nobody seems to know who handles their marketing efforts these days?
The Big B, Burton seems to do their own thing and has been for some time. Burton is another brand that said no thanks to spending money on the show. But Emerald or whatever company allows them to still be members of the trade organization? While exhibiting offsite taking business away from the show?
Some of the brands that I have met with offsite include:
Mervin
Nike
Icebreaker
The North Face
Plus another 20+ invites over the last few years. I guess the brands don’t realize its actually hard to leave meetings on the show floor to head to a hotel to walk through a product line.
I just chuckled today. ~ Did you get the Emerald email about booking 2021 OR winter lodging? That feels like a lifetime away and sort of bold to be scheduling my guess is the show doesn’t happen. Why would it actually need too?
Are trade shows done for good?
Hi Mike,
Well, I pretty much agree with everything you said, so I guess this will be a short response. I think/hope there will still be come kinds of gathering, called trade shows or going by some other name. Oh- and I guess we disagree about it costing a few thousand dollars to attend. I think it costs more than that. Unless the organizer gives you free booth space to make the show look better.
Thanks for the comment,
J.
Hi Jeff,
Nice article and I commend you on publishing. Its a difficult time for most to cross into this realm. I have a different perspective as I have been involved with many shows on many different facets, for many years (more than the grey hair and bald spot can show).
The Outdoor Industry is one that I find as an anomaly. I truly believe the industry did it to themselves with the show. If you look back to SIA for example when it was end of March, the draw of the show was to see and experience latest industry trends, speak to the developers and meet your sales team in the competitive environment. Once the show happened a buyer could actively absorb what they learned, bring it home and create their buying strategy for their next year, understanding the seasons trends and what came through the registers. The manufactures drove earlier timelines to fulfill delivery and manufacturing timelines that turned the shows focus.
As Ive seen in other shows that ignite the industry trends, focus on releasing product and seeing a buyers response, I look back on this particular industry, and have lost my luster for attending, unlike other shows. At most of the bigger shows, there is much to see that I cannot do in the time a show has on my calendar.
Since the pandemic started, its changed of course how we all feel about shows. Most of the panels Ive been participating on, have one common statement – People go to a show to be immersed in their business. New trends are seen, people are able to have real time interaction with product, see how the team is with the business they are doing, understand deliverables and meet the members they will be doing business with.
CES for example, is a show that is dedicated to introducing new products that the market has never seen (or glimpses of), that I feel the OR market has lost. I find it horrid that companies can ride the coat tail of the show draw, yet create their own off site experience. Trade shows are a resource that will have a hard time being replaced by Zoom meetings or other avenues as its a time management perspective. We definitely need to change the strategy of the show, but even the new generation can have access to educational tools for their business that they wouldn’t see, in a normal 2-3 days.
Granted I go to shows for improving my companies performance and seeing a market place under one roof, and being able to do it all at once. I can gauge what the brands are making moves, directly go to the competitor and see if they are leading the trend, and then move to a more educated decision. I also learn in a matter of hours, what I need to pay attention to coming down the pipeline. If the sales team Im meeting for a new product doesn’t jive, and a competitor does, well my decision is swayed. This can happen in less than a few hours going from booth to booth.
Yes there is also the social aspect of seeing friends and other entities that you typically dont get interaction with, and the industry all being under one roof that drives some of the non business nonsense elements, but when do we all get to chat in the epicenter of our business with our colleagues?
Envision lots of change needed to bring the model of a trade show back to something we value.
I cant foresee how the changes we are facing today will effect tomorrows outcomes, but I know I will be attending shows to continue seeing how business can benefit. Granted for the time being, will be wearing a mask and a badge that has my smiling photo on it.
Respect all that have commented and look to the show providers to facilitate a show that can bring products to market that really improve business and are not about the hype or trying to make their show feel better than others. I feel the costs of concrete at a venue have really caused a dissatisfactory taste. Lets make shows great again.
All my best to you all and sending vibes of good juju and good health to all.
Kindest regards,
Hi Jay,
Great to hear from you and thanks for taking the time to write this.
We agree that some kinds of industry gatherings are important, but I hesitate to necessarily call them trade shows. Like you, I’m not certain what they will look like. I don’t think they will look like the ones we have had until now and I don’t think they are going to serve the same functions. I’ve never been to CES, but my understanding is that’s where you see actual new products with improvement and differences compared to what’s offered by other companies in that industry. That used to happen at our shows, but I think it’s been fairly rare for years now. Fundamentally, we’re an oversupplied industry where almost all product differences are created with marketing/branding. As long as that’s true, our trade shows, and the process you described that we’ve traditionally gone through at them, will be less valuable than in industries that offer new products and functionality. Given the companies who have stopped attending, or reduced their presence, I’m pretty sure I’m not the only one who feels that way.
Thanks for the comment and hope to see you at a show- whatever it’s called.
J.
Another thought provoking post that I am happy you still take the time to write.
As the person that would make the call to attend shows and events, I will struggle to find reason, but more importantly the budget to attend shows like we used to. Our brand stopped exhibiting years ago at our industry trade show-we still attend as a team and browse, but even that has been ripped from 2020 budgets (if shows come back online). I can’t imagine we’re the only brand to have decimated the spreadsheet on 2020 expenses.
Hi Stik,
Oops, a little late in responding. Yeah, the days of “Oh gee, everybody else is going so we might at well” are over. You’re going to need really good reasons to spend the money. If there’s one thing that’s been shattered by the virus and economic impact, it’s the tendency to do more of the same.
Thanks,
J.
OR has been a questionable expense for years. I say “expense” rather than “investment” for a reason. I hope emerald folds completely. Time for a restart.