Thursday, July 12, 2007

Who shot J.R.? (aka part 2 of the tradeshow discussion)

Now what was I saying? Ah, yes, the questions!
1. Will people pick one show over another to attend next winter?
2. Can the industry handle three major tradeshows a year?
3. Is the coexistence of the PMA and MemoryTrends show going to benefit either show or the retailers and manufacturers that attend?

I promised yesterday that I would give you the opinion of yours truly! And here it is!

1. Will people pick one show over another to attend next winter......yes. I think most people will, especially because they're so close together. Especially retailers, considering they have a limited budget to work with.
2. Can the industry handle three major trade shows a year. Many people may disagree with me, but I say, YES! We've seen this industry get bigger, get broader, and our tradeshows have done the same. It's important to note that CHA and Memory Trends are very different shows. Sure, there's buying to be had for retailers at both, new products to show from manufacturers, but CHA is "the big boy"....everybody knows that. Memory Trends though is an a more intimate show, JUST for scrapbooking. As a retailer or designers you don't have to wade through the many booths of fabrics, yarns, paints, woodworking etc. Don't get me wrong, all those things are great--but they apply to the broader craft industry and not to scrapbooking. Also Memory Trends places a bigger emphasis on education.
There's talk of quite a few manufacturers pulling out of Memory Trends this year, and their future commitment is unsure. There's various reasons to pull out of a show for a manufacturer. Many people don't realise the cost that goes into attending a show for a retailer. First there's the actual cost of a booth, which depends on the square footage, then there's the cost to ship your booth and product there. Once it's there there's something called "drayage." Drayage is essentially another shipping cost tacked on by the convention center staff to bring your booth from the dock to your booth space, a whopping couple hundred feet in most cases...this can cost thousands of dollars just for that! There's cost associated to have your booth set up. (many booths can't be set up by manufacturer themselves, either because they are too large or because of Union reasons depending on the location of a show) There's the carpenters that set up, the electricians that do the lighting, the people that lay the carpet...there's a different person for everything--and everything costs money. Once that's done, you have to get the manufacturer employees there to work the booth, so there's their flight costs, their hotel costs, their meal costs. So say that you spend $20,000 to go to a tradeshow as a manufacturer, all costs actually need to make far more than $20,000 at that show to make it worth it? Why? Because in most cases, the manufacturer puts out new product just for that release, which means design and manufacturing and distribution costs, and even if there is a good markup on this product, when all costs considered, they may only be making 10-30% on those initial launches. That being said, for a $20,000 show, a manufacturer really needs to have $200,000 in new product sales to make up for it........................................that being said 3 shows a year may not pay off for all manufacturers. Some smaller and new manufacturers simply can't afford more than one show a year, with out the risk of bankrupting themselves. I've seen it happen with small companies.
Back to my original point though, I still think the industry can handle 3 shows a year. Anaheim is a locked location through 2011 for CHA Winter, and Chicago will remain for at least a couple years, although there's rumor about summer becoming a traveling location in the future. Different Geography presents opportunities for more retailers/buyers/designers to attend a show at some point during the year. I do think that manufacturers will slow their releases in the future though, as a combined response of it getting to be to expensive and cumbersome to have 3 show based releases a year, and consumers becoming overwhelmed .
and finally question 3.
3. Is the coexistence of Memory Trends and PMA going to benefit either show or the retailers and manufacturers that attend?
Well, sure it will benefit the shows, especially PMA. There's another vertical market suddenly walking through the door, listening to manufacturer's pitches and placing based products will work perfectly in scrapbooking stores and merchandised areas. But, will the same thing work vice versa? Most photo stores are very small, and additional merchandisable space is hard to come by. In my opinion, I can't see many photo stores dedicating much more than 2 linear feet to scrapbooking, or a possible walk around kiosk if space allows. What would work best in those locations then would be kit and album based. Most likely the photo store consumer will not be an advanced scrapbooker, and if they are, a photo store will not be a destination location for them for scrap-supplies, unless that owner can dedicate sufficient space to product and rotate it often, which isn't likely. The store owner could however rotate less often, have a small amount of space and count on 1-up sales of beginner scrapbookers or gift buyers.

And in the words of Forrest Gump, "that's all I have to say about that"

Feel free to let me know your thoughts--even if they're not the same!



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