2009 trade shows still draw a buying and selling crowd, albeit smaller ones

The outdoor, fitness and sports industries are not alone in commiserating about trade shows and declining attendance and exhibiting. In 2008, the exhibition industry, including all types of trade shows and conventions, declined 3.1 percent, marking the first annual decrease in business since 2002, according to the Center for Exhibition Industry Research (www.ceir.org).

Overall, four key industry metrics saw declines in 2008, with net square footage for shows dropping 2 percent, the number of exhibitors dropping 2.6 percent, attendance decreasing by 4 percent and revenue slipping 3.5 percent.

"Most trade show sectors are down," Michael Hart, editor in chief of Tradeshow Week Magazine, told SNEWS®. "The most significant problem has been attendance. It's not that companies aren't going, but where they used to send 10 people, they're now sending two or three." Hart added that smaller exhibitors are withdrawing from shows, while larger exhibitors are using smaller booths.

Hart said that the recession has hit some types of shows more than others. For market segments with multiple shows, the main shows are faring well, while smaller shows serving that particular market are hurting. "Some smaller shows have to cancel completely," he said. This holds true for trade shows serving certain sports markets.

"The shows that are annual and service a niche market, such as Interbike, have been affected less than a show that runs multiple times a year and is in a more competitive landscape, like ASR," said Andy Tompkins, group show director for the Action Sports, Interbike and Health & Fitness Business shows within the Nielsen Sports Group (www.nielsensportsgroup.com). ASR (Action Sports Retailer) not only has multiple shows, but also competes with Surf Expo and non-sports-specific shows such as MAGIC.

Smaller, niche shows suffering more
Tompkins said manufacturers and retailers are making hard choices and participating in fewer events for their particular market. While this has had a negative effect on ASR, large shows that occur once a year, such as SIA and Interbike, he said, are doing relatively well because they offer buyers the sole opportunity to reach their respective channels. What 2009 will hold has only begun to see a preview in shows in the first quarter of the year. For example:

>> Snowsports Industries America (SIA) reported buyer attendance dropped 5 percent for this year's January 2009 SIA show in Las Vegas. (Click here to see a Feb. 9, 2009, SNEWS story.)

>> Nielsen reported attendance at the 2009 Outdoor Retailer Winter Market show in Salt Lake City in January dropped about 10 percent (Click here to see a Jan. 29, 2009, SNEWS story, "Outdoor Retailer Winter Market light on traffic, big on smiles.")

>> WSA, a twice-annual shoe show, saw declines at its February show of 18 percent in overall attendance, which covers all attendees from retailers to exhibitors to media.

>> Also suffering, the January 2009 ASR show in San Diego was noticeably smaller this year, with 100,000 net square feet, compared to 131,000 net square feet in 2008, or down about 24 percent. Also, this year the show included 100 fewer brands than the previous year or about a 20-percent drop from 500 to 400 brands.

>> Not as bad as some nor as good as others, the IHRSA commercial fitness show in mid-March reported declines in attendance of about 15 percent, and in exhibitors and in the show's square footage about 20 percent. (Click here to see a March 23, 2009, SNEWS story on IHRSA and here to see a March 30, 2009, story on IHRSA, reporting square footage.)

>> Shows outside the boundaries of North America weren't immune although fared better. At the winter ispo sporting goods show in Munich, Germany, in late January, early attendance figures showed a drop of about 5 percent and exhibitor numbers were down less than 4 percent. (Click here to see a Feb. 5, 2009, story.)

Some of the declines began last year, with the niche FlyFishing Retailer Expo in Denver in September seeing attendance drop 10 percent, and the 2008 Health & Fitness Business seeing lower numbers of attendees by about 16 percent. In this case, the really striking figure out of HFB was in booth space, drayage and staff -- places where exhibitors may try to slice and dice when they still feel they have to be at a show. At HFB in July 2008, even with two additional exhibitors, the show dropped by nearly 13 percent in square footage, but exhibitors also sent 220 fewer staff members, and drayage declined significantly. Some show pundits feel this type of trend may continue across many shows.

Quality vs. quantity
Even when attendance drops, it does not always mean that the show is suddenly a waste of a company's time and attention. Experts agree that exhibitors and attendees remain happy as long as the show continues to draw a quality crowd. As long as exhibitors can interact with influential buyers and fewer tire-kickers, they find real value in the gathering. This was the case for the Eastern Outdoor Reps Association regional show held in February in Greenville, S.C.

"Morale was really good despite the drop in attendance," said EORA Executive Director Debbie Motz. This year the show drew 60 fewer buyers than last year (for a total of 588 buyers), but 291 stores were represented, which was four more than last year.

While the recession is impacting the trade show industry, there is evidence that it will not completely kill attendance and erode the quality of shows.

"Over the last six recessions, we've trended key performance indicators like the buying influences of attendees," said Joe Federbush, vice president of sales and marketing for Exhibit Surveys (www.exhibitsurveys.com). "We've found that the amount of square footage and number of attendees goes down, but the quality of the audience remains pretty strong." He said companies may be sending fewer people, but they're sending more of the final decision makers. "The value of the trade shows is still there for the attendees and the exhibitors."

Nevertheless, Federbush said that these days exhibitors and attendees are demanding more detailed information on their ROI -- the return they get from investing in a show.

"The show organizers really have to be proving the value to attendees and exhibitors," said Federbush. "More now than ever they need to be leveraging their registration data to come out with some more solid numbers. They need to be surveying the quality and quantity of attendees."

Tompkins said that trade show operators within the Nielsen Sports Group are working harder to better understand the buyers who attend the shows, how they utilize the shows and what impact exhibit presentations have on their purchasing decisions. "We've done a series of surveys about buyer behavior," said Tompkins, adding that more reports are generated to show things such as how much a buyer purchases and how many storefronts they are buying for. "Illustrating buying power and storefronts is becoming increasingly important to show producers because retail channels are consolidating," said Tompkins. "Fewer people are doing the buying. Whereas 10 years ago there were 100 specialty shops servicing an area, now there may be 50."

Outdoor Retailer recently sent a 38-question survey to 18,000 retailers and received 1,500 replies, including some surprising information. "Seventy-two percent of the retailers said they wrote orders at the show. That's much higher than we thought," said show director Kenji Haroutunian. "The results were really helpful, and we need to do these surveys every year."

While show producers are generating more data to satisfy customer demand, he and most other trade show managers have not had to offer deep discounts to exhibitors and attendees to draw them to shows. While ASR dropped its exhibiting space rates by 25 percent, other shows such as Outdoor Retailer, Interbike and HFB have for the most part maintained their pricing, meaning no price increases for inflation either.

"That has been possible because the cost of travel has gone down quickly," said Hart of Tradeshow Week. "The cost of hotel rooms in most cities and the cost of plane tickets have dropped in the last six months."

Also, many show producers were well-prepared to weather an economic storm.

"The last recession in 2002 really impacted the exhibitions industry, because people were afraid to travel (due to the 9/11 terrorist attacks)," said Hart. "A lot of the lessons the exhibitions industry learned then they have not forgotten. They've learned how to get lean very quickly."

What's next?
While the trade show industry is doing OK now, the big question is what things will look like later this year or next year. Hart said that many trade shows did not change in size and scope because exhibitors were locked into binding contracts made the previous year. Many of those exhibitors are likely scrutinizing their budgets and considering whether or not they will attend in 2010, or to what extent they will participate. "If your business is having trouble, you might not make a commitment to go next year," said Hart. "Of course, that could change if the overall economy picks up in the third and fourth quarters."

In any case, Hart and others do not think we're going to see the death of trade shows anytime soon. "Even if business is bad," said Hart, "trade show producers are not flipping out."--Marcus Woolf