Let’s start with this. Many of us have been going to OR for 20 years or more. A lot of business has been done. Thousands of relationships established. And many good times had. The Show remains relatively healthy despite the economy’s downturn.
Now, let’s address the new situation. Winter Market was not full. Tens of thousands of square feet lay vacant. Everybody, even the best friends of the Show, knew that the announced 5% decrease in attendance was a joke.
Many retailers did not come to Salt Lake City due to travel costs, and the simple fact that they don’t need to come to the show. Why? Reps will gladly come to their stores and present the lines. In fact, reps have been on the road showing the lines to both retailers who attended the Show and retailers who didn’t.
Media is also cutting back so coverage is thinner.
Consolidation is another force at work. The larger manufacturers continue to buy the smaller brands in hopes of filling holes in their product offerings. Often the larger manufacturer is seen as not authentic in a certain area, and thus the bucks fly.
Retailers are also in the act, buying up smaller retailers to either eliminate competition or expand into other geographic areas, or both.
What does this consolidation mean? It means a chance for manufacturers to cut down on booth space. It also means a chance to scale back on the number of people going to the show, which both brands and retailers are doing.
Just last month that very conversation about booth space took place at one company that had purchased a smaller brand. Should we consolidate into our booth, but give them their own identity? Or should we continue to have that brand autonomous and have them keep their booth space? Well, dollars and cents will settle that debate. And that probably means consolidation into one booth.
Another company opted out of WSA. It figured that each rep appointment with retailers would cost the company $1,000. No way to recoup those costs.
Trek and Specialized have pulled out of Interbike. Cannondale did too and used the savings to bring retailers to the factory for several days of hands-on product introductions, business discussions in a calm setting, and entertainment.
One of the largest line items in any manufacturer’s budget is Outdoor Retailer. OR charges a lot. And it says it delivers a lot. And it does. Show starts on time. Runs smoothly. Great programs. So far, the value falls on the side of OR. However, during a recession hosting a smaller group of retailers and presenting empty space or the perception of empty space means trouble. That leads to further examination of the return on investment. With a dwindling return comes manufacturer and retailer defections and that eventually will lead to failure, ala NSGA and the Super Show.
OR needs new excitement. New energy. It needs to update and expand the business model and increase the return on investment…for everyone.
We present that idea next time on Channel Signal.
