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Surf Expo from the 10,000 Foot Level- Literally

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Yesterday morning, I was in warm, humid, sea level Orlando for Surf Expo. After 14 hours of travel, I found myself at the cold, dry, and 10,000 feet high Keystone resort for the Zumiez 100K event. Whew. One beer was my limit with dinner last night, and then I went to sleep early. 

Agenda and Surf Expo are two very different shows, with Agenda more urban and apparel and Surf Expo more beach and surf. We need them both but not, if I may say it again, overlapping each other.
 
The thing that almost caused me to keel over at Surf Expo was the stand-up paddle section. I regret not counting the brands. There were a lot. In conversations with a couple of them, I heard that there were perhaps 200 “viable” competitors plus maybe another 100 who just have product made and printed with their label in China. The size, shape, and prices of product varied widely. Incredible number of choices. Amazingly, I was told that the SUP section is about twice this size at Surf Expo’s September show.
 
I know some of you have had the same thought I had- “Oh lord, it’s the SIA snowboard section in Vegas in 1996.” We know how that worked out. Honestly, I expected a consolidation sooner. It was two years ago I saw a $400 SUP board at Costco and there’s never been the manufacturing learning curve and lack of capacity issues we had with snowboarding.
 
The reason we haven’t had a consolidation yet, I hypothesize, is because SUP has a much larger potential market and is easier to learn than surfing or snowboarding. And it doesn’t require a mountain or a wave. There are lots of lakes.
 
I couldn’t help but notice how many people involved in SUP had been through the snowboard business cycle. Hopefully, they haven’t come down with a case of selective amnesia. This time will not be different. There will be a consolidation, margins will drop, there will be too much product and production capacity. I don’t know when, but I recommend that you build your balance sheets and not assume it will only impact your competitors.
 
But damned, it’s great to see a new category with some legs.
 
The skateboard section was intriguing. The skate ramp was packed (I love watching the etiquette that skaters use to keep from running over each other). Volcom was the sponsor, with its booth opening on the ramp. Every kind of skateboard was represented. Long, short, narrow, wide, various shapes, wood, plastic, metal. I particularly liked Beercan Boards, made from scrap aluminum by an auto parts manufacturer from Georgia. They readily acknowledged that they didn’t know anything about the skateboard industry, but they seemed to be having fun. It felt a little like the bike show, where anybody with a new idea is welcome and encouraged to try something different.
 
While one end of the show was dominated by skate, the other end was what I guess I’ll call resort focused gifts, for lack of a better term. I more or less walked the whole show, and found it interesting how the energy built from one end of the show to the other. Kind of suggested that they have it organized right. At first, I found it interesting that beach and surf were separate, but as you walked the sections it became clear why. Their products mostly wouldn’t sell in each other’s channel. Surf industry consumers want technical board shorts. Beach market customers want a bathing suit.
 
Oh- and I want to thank Surf Expo for giving me a badge that said “buyer.” People in booths were nice to me, and I actually had an apparent reason to stop in my tracks and check out the models because, obviously, I was a buyer with an interest in the swimsuit business. My favorite booth had to be a little one with a guy sitting at an unadorned table with some apparel hung on the back wall. The sign over the front of the booth just said “DEALS.” I thought that was refreshingly honest.
 
A company called New Trick Sports was featuring a 45 pound electric wench fitted with an 1,800 foot line that can be easily attached (and detached) from a pickup truck and can pull a wakeboarder. The videos on the web site make it look like it’s plenty fast. I guess one potential inconvenience might be that you have to swim the line out. They are working on a gun that can be used to shoot the line out for rescue purposes, but I doubt that will be available to consumers. Too bad.
 
There were some pretty large booths in the surf section. Billabong, Quiksilver and Vans come to mind. Shades of the old ASR. No second stories though. I understand The Endless Summer showing the first night of the show was a big success, though I didn’t get there to see it due to my being efficient and planning too far in advance. Do something that cool next year and I’ll be there.

 

 

Surf Expo; The Report of the Death of Trade Shows is Greatly Exaggerated

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Apparently, if you get a whole bunch of retailers who need to buy stuff together with the brands they want to buy from there’s still every reason to have a big old trade show.   Maybe, in fact, the bigger the better. The more brands and retailers, assuming they are the right brands and retailers, the more can be learned and the more business done in the most efficient manner.

Surf Expo struck just the right balance between a positive, upbeat environment and a focus on business.   Noisy, but not loud. You could talk. Active, but not frantic. Fun, but professional.  

Not that trade shows and the ways they provide value haven’t changed. Technology, the economy, and the way the retail environment is evolving have seen to that.  You don’t compete against other brands for the biggest booth prize any more (though that was sure fun!). Retailers tend to bring fewer people. Shows don’t need to be quite as long. More buying is done outside of the show environment. And brands from one industry don’t fret any more about having other industries at “their” show. We’re all in this together.  In our industry, we think of Surf Expo as surf, skate, and now, SUP.  But the resort and gift people are there too and that, I think, gives Surf Expo the size and resources to do some of the things they do. 
 
Internet at the show was free, which I really appreciated. I’m used to doing without given the simply unbelievable prices that have been charged at other shows. “Unbelievable” is a much kinder word than I first thought about using.
 
In terms of which brands exhibited, the surprise was the absence of Volcom. Still, I’m not certain that Volcom, as what I’ll characterize as an urban/youth culture brand, really fits at Surf Expo, though it’s certainly convenient for their East coast retailers to see them there. I didn’t talk to any brand that was sorry they weren’t next to Volcom’s booth. Maybe that’s a good decision by Volcom.
 
I thought one of the most consistently busy booth was Sanuk, though John Vance is a friend of mine and I probably spent too much time standing around his booth bullshitting with him. I’ve frequently written that the biggest risk for a business is to not take any risks. Sanuk is doing some management things that are not traditional for our industry. Some people might call them risky, but I think they’re responsible for a lot of the brand’s success.       
 
Traffic Thursday was deemed by most people I talked to as a little light, but it picked up nicely on Friday and I’d characterize the show as busy. I have to confess I left on Saturday. Show management tells me that Saturday was stronger than they expected, and that retail attendance exceeded last January’s show by 9.2%. Don’t quite know if that’s 9.2% more stores, more retailers, more days stayed, or more beer consumed.
 
The skate park was very well done. I’m not qualified to discuss its technical attributes but it was big enough to keep things moving, and located where it wasn’t in the way but was still part of the show. There was plenty of room to stand around and watch and you could move past it without getting trapped in the crowd.
 
But the undisputable highlight of the show had to be the Quiksilver sponsored All 80s All Day Vert Challenge with skating by Tony Hawk, Andy MacDonald, Christian Hosoi, and about 15 other skaters. It happened Friday evening after the show closed. They set up the huge ramp in a part of the convention center the size of the trade show, but where the trade show wasn’t. Basically, nothing in it but the concrete floor, ramp, the Quik van, and some crowd control barriers. The industry came in from one side and the public was allowed in from the other. No clue how many thousands of people were there. It felt a little like Quiksilver’s coming out party announcing that their problems were behind them.
 
In the past, there has been talk and some attempts to integrate the public with the trade at a show and it either hasn’t happened or hasn’t worked out. This worked spectacularly well. I managed to get in a little early (thanks Doog!) and could stand right next to the ramp and watch them warm up. If Einstein were alive, I’d let him know that a bunch of people were violating his laws of physics on a skate ramp. I look forward to Surf Expo thinking up new ways to involve our customers in the future.
 
My next challenge at the Vert Challenge, in the best industry tradition, was to figure out a way to get into the Quik VIP area where they had the free beer and food. I was stopped at the entrance for lack of a wrist band but some guy I didn’t know said, “Here Jeff, I’ve got an extra one.” Turned out to be Kevin from the Quik marketing department and am I ever glad I put my picture on my web site. Thanks Kevin.
 
I didn’t know much about the standup paddle market before this show, but I learned a bunch. There were, well, a lot of SUP companies and Surf Expo had installed a shallow pool where you could take a lesson. But the real eye opener was the SUP industry discussion group I went to Friday evening after the show closed.
 
The meeting was past standing room only. Those of you who have been around a while know that in the mid 90s I rained on the snowboarding parade by suggesting that it was possible all 300 or so hard goods companies might not make it and that the industry would go through the usual growth, maturity, consolidation cycle every industry goes through. Around 2004 I told the skate industry that Chinese product was coming, there wasn’t anything they could do about it, that distribution issues weren’t going to go away, and that shop decks and blanks were here to stay.
 
It seems that every eight years or so I piss off some segment of our industry and it must be time again.
 
What the SUP industry has going for it is that it’s a sport for the whole family with an easy learning curve. But that doesn’t make it immune to the usual industry cycle that snow, skate, and surf all went through. When somebody stood up to announce how “the industry” had to keep margins up and various heads nodded in agreement, I had a flashback to the IASC/BRA sponsored breakfast round tables at ASR. Those of you who have been to one of those don’t need me to say any more.
 
Here’s what I’d like to tell the SUP industry. First, the consumer is going to get what they want. If you won’t sell it to them, somebody else will. Ask the skate industry. Second, “the industry” is not going to keep margins up. It’s probably illegal. But more importantly, I guarantee you that every company in the business is going to do what they perceive to be in their own best interest. If there’s no meaningful product differentiation, margins will head to the point where marginal revenue equals marginal cost. There’s only so much advertising and promotion can do to prevent that. Ask the snowboard guys.
 
Like Boardworks’ Bob Rief put it during the meeting, “If you are in a low volume, low margin situation, you really don’t want to be because it’s a lethal combination.”
 
Please don’t kid yourselves SUP people. Make sure that many of the people you talk to aren’t your industry peers so you get some perspective. Run your businesses well and realistically knowing that you can succeed in spite of an inevitable business cycle if you do.
 
Strangely enough, I don’t think anybody complained to me about the show. Oh wait- one complaint about booth location, but they confessed they were late booking. The general attitude of the retailers and brands I talked with was:
 
·         Good show.
·         Things are better than last year but not good.
·         I’m still cautious and running my business that way.
·         We’re not going back to 2007 any time soon.
 
Except for the “Good show!” part we really can’t hold Surf Expo responsible for those sentiments. They’re doing everything they can to make their show easy to attend, functional, and valuable. Wonder what they’ll do next.