Predictions about where thebusiness is headed are mixed, but a number of experts seem to agree that, barring any extreme world or economic events, exhibitions will draw a modest increase in attendees and exhibitors in 2003. Despite that somewhat rosy short-term outlook, events of recent years have exposed some basic challenges to the way trade show organizers do business.
Technology advances, corporate consolidation, and restrictions on travel are all chipping away at the status quo, forcing associations to rethink their exhibitions. Here are some predictions for the coming year and changes making their way through the business.
Certain segments will thrive, while others wither. In the past, it was common to generalize about growth in the trade show business, but in fact some segments have taken a much harder hit than others, and that can make forecasting difficult. No one expects technology or telecommunications shows to rebound very quickly from the doldrums, but healthcare, construction, and manufacturing shows have continued to draw strong crowds. Pack Expo and The International Machine Tool Show, both of which suffered for several years, virtually sold out in 2002.
Association events seem to be benefiting from their group affiliations. Since the last quarter of 2001, association-related exhibitions have outperformed nonassociation events. “The community that exists related to those events and all the things they do related to the exhibition have buoyed those events and kept them strong,” says Douglas L. Ducate, CMP, president and CEO of the Center for Exhibition Industry Research in Chicago.
Most economists are predicting a recovery for the first or second quarter of 2003, but those same economists expected that recovery to happen in 2002. If the economy does take a downturn or the United States launches an attack on Iraq, Michael Bandy doesn't see either event eroding trade show participation any further. “I think the marketing dollars have been cut as much as they can be,” says Bandy, president of the Trade Show Exhibitor Association, based in Chicago.
One bright spot for expositions with a large international contingent: Overseas visitors should be more in evidence. Barring any terrorist activity, some observers expect to see the bottleneck in visa requests abating next year. “Certainly from the friendly countries in the industrialized world, we'll see a return to practices prior to September 11, 2001. I think what safety concerns there were have largely diminished,” Ducate says.
Attendee demographics are getting more attention. “I've heard from a lot of members that yes, attendance has been down, yes, they would like to see more, but the quality is very high. As a result, more business is being done at shows,” Bandy says.
With so many companies consolidating and major corporations going bankrupt, the number of large organizations sending people to shows is shrinking. As a result, the attendee base is shifting away from large organizations and more toward medium- and small-sized companies, and they are less likely to send an army of employees to a convention.
Fortunately, most observers agree that face-to-face contact remains an important tool in deals. “You need to be able to establish that trust and confidence in who you're doing business with,” says Brian Tully, senior vice president of conventions for the Washington, D.C.-based Food Marketing Institute (FMI).
But some critics suggest that the traditional trade-show arrangement pays too little attention to the attendee. “Most shows are seller-focused marketplaces,” says Doug Fox, publisher and editor of EventWeb, an Internet newsletter for the business based in Washington, D.C. “That makes sense, because the exhibitors are responsible for a much larger percentage of the profits. But the focus really needs to be on attendees.”
With so much information available on the Web now, potential attendees have less reason to bother with a trade show. Fox argues that exhibitions will need to reshape their structure and cater more to attendees if they are going to survive.
What might a more buyer-centric trade show include? Fox suggests creating directories with Consumer Reports — style ratings of products; providing booth traffic data to attendees so they can see what products and services are attracting the most interest; and facilitating appointments for attendees who are further along in the buying process than simply collecting literature.
Raising the quality of the average attendee — i.e., the buying power — is the greatest marketing challenge trade show organizers face, according to a recent survey by market communications and research firms Frost Miller Group and Jacobs Jenner & Kent.
“Trade show organizers are worried about two separate marketing problems,” says Wayne Jacobs, president of Jacobs Jenner & Kent. “Number one, how can we attract more first-time attendees? Number two, how can we attract more high-powered decision-makers?” Show managers say they think improving customer service will do the trick.
Show managers will double as matchmakers. If one accepts the premise that a trade show's main function is to put buyers and sellers together, then show producers are the matchmakers. With the Internet taking over some of that action, attendees are increasingly looking for a good reason to bother with trade shows, and exhibitors are putting even more pressure on show management to bring them potential buyers.
“We need to involve ourselves more deeply in bringing trading partners together and creating the right venue for them to discuss a range of issues,” Tully notes. “We need to know who our top exhibiting customers want to meet with, who our top retail customers want to meet with, and be a matchmaker, maybe go so far as to establish an agenda.”
The FMI Show, an annual event in Chicago, attracts large grocery chains, and FMI helps get attendees from those chains to the right places. “If Kroger [grocery chain] tells us they'd like to meet with 75 companies, it becomes our job to schedule those 75 appointments and get those people there,” Tully says. The show also polls companies sending large groups about what issues they want to see addressed on the educational side and tailors parts of the program specifically to them.
Increasingly, trade show Web sites such as the one for CONEXPO-CON/AGG Show are offering attendees not only a list of exhibitors, but a way to schedule appointments with those vendors. Fox cites this as a step in the right direction toward facilitating business between buyers and sellers.
Exhibiting costs will continue to be challenged. With so many companies trimming the fat, the cost of exhibiting has come under intense scrutiny. The issue drew a lot of attention in the summer of 2002 when the International Association for Exhibition Management hosted a summit regarding the future of the exhibition industry. One result of the summit was a manifesto, which raised concerns about perceived return on investment spiraling costs for exhibitors.
“The summit asked, ‘How do we preserve the cost/value advantage that exhibitions offer?’” Ducate says. “It's not just a numbers game, it has to be quality attendance, people with buying plans or with a role in the buying process. Just running in bodies is not the solution for any show.”
Drayage is another sore point. “It's a big problem,” Bandy says. “How can you explain to your company why it costs you so much money to get your booth off the dock and onto the floor?” And those high costs have raised suspicions among exhibitors. “I've heard rumors of contractors who give a percentage of their fees to shows to get the business,” Bandy says. “I've also heard of some that don't even get a bill from the contractor. So that means they're shifting those costs to the exhibitor.”
To combat escalating costs, Bandy says many exhibitors are starting to ship lighter-weight booth materials or bring less product to expositions. And some shows, such as Pack Expo and the International Machine Tool Show, have addressed the issue by assembling all-inclusive freight packages with a fixed price, which avoids unpleasant billing surprises. Increasingly, registered exhibitors are skipping the show entirely, a practice that Ducate has seen escalate as more companies track costs on a quarterly basis.
Thinking outside the box will be necessary. Creative show managers are looking at a number of innovations to make their exhibitions more successful. Technology, scheduling, even the classic pipe-and-drape booth structure are among the areas being re-examined.
E-mail pre-show teasers, for example, are a much cheaper way to reach attendees than the more traditional snail-mail method. “A pre-show mail shot from an exhibitor increases booth traffic 50 percent, while two shots can increase it 75 percent,” Ducate says.
At the show, exhibitors can use Internet connections to put buyers in touch with technical people back at the plant. And in the future, Fox thinks shows may offer software that would allow buyers and sellers to network through hand-held wireless connections at the show.
For years, many shows have operated in the same cities and during the same hours, but that “Don't fix something that isn't broken” attitude may be challenged as buyers' and sellers' needs get more consideration. If both sides are sending fewer people to a show, they may want shortened hours or fewer days. “Events will need to look realistically at whether they can just continue to meet where they want or whether they need to be sensitive to where their members or customers are,” Ducate says.
Co-location, which brings two or more overlapping but distinct crowds together for multiple events, is seen as a good way to make a trade-show trip more worthwhile for both exhibitors and attendees, particularly for shows with a large international component. The FMI Show co-located in 2002 for the first time with the National Association for the Specialty Food Trade's Fancy Food Show, and Tully says the experiment benefited both groups.
And the booth itself is taking on a new look: office-like spaces that offer a quiet, private place for discussions. That's the result of technology that allows buyers and sellers to schedule appointments in advance; it's also a reflection of the type of attendees many trade shows are attracting — those who have purchasing influence.
Despite innovations by some exhibition managers, Fox suspects that too many of their colleagues still have their heads in the sand regarding the future. “Not enough show organizers are monitoring the changes taking place in our economy, in technology, and in business consolidation across the board. [They need to look at] the impact those trends will have on trade shows — and what they can do to make shows better.”
More than a dozen years ago, Charles Allen launched the successful Birmingham-based American Exhibition Services, providing an array of exhibitor-marketing services to both association and independent shows. As someone who has had the advantage of working with convention centers, association show organizers, and exhibitors, Allen's perspective on trends in the exhibition industry is as 360 as it gets:
“I look for a return to the “new normal,” which will continue the heightened focus on event and facility security. Shows will also see an improvement in exhibitor and attendee participation as their respective industries experience economic recovery. Look for show size and duration to decrease while shows become more focused on helping their participants succeed in their objectives.
“This recovery will not be automatic. Show organizers need to work harder.…The attendee needs more value from the show as it relates to educational offerings, convenience of show hours, and reduced travel and lodging costs. As the attendee goes, so goes the exhibitor.”