CFA, WELLS FARGO: Invitation to next "Crystal Ball" breakfast session, "Private Label vs Branded Manufacturing."
STOKES ME: SIMA Humanitarian Fund campaign kicks off this week with "Add-A-Buck" promotions in 76 core-store doors.
Details on Industry Insight.
Today, Andy Tompkins answers questions about how ASR is being impacted by the economy and other issues. January is traditionally a smaller show for ASR, while September is the bigger show.
AT: There is no doubt we are in difficult economic, and in many ways unprecedented, times given the state of the stock market, credit lines, and petroleum costs. Retail has been hit the hardest so far given low consumer confidence and restricted spending, so many of the businesses that comprise the action sports industry are challenged to generate revenue, have strained cash flow and are concerned over sales prospects in the short term future.
So in general, exhibitors and attendees are adopting a cautious approach, only investing and traveling when absolutely necessary.
AT: As you can imagine we are actively selling January right now so any answer I give to your
question is speculative, but for ASR January I expect about a 15 - 20% reduction in overall floor space with approximately 450 brands vs. 500 in 2008. But it is a very fluid situation that is changing by the day.
In difficult economic times, brands need to solidify relationships with top retailers and ASR provides a platform to connect buyers and sellers in a very meaningful way. Retailers want to meet with brand executives and hear their plans for the future - what will payment terms be, what new products or lines will be introduced or altered to boost sales, what distribution channel decisions will brands make?
A rep visit can't accomplish this, retail operators want to hear these ideas from company executives directly. Especially now, retailers need to know that brands will stand by them and work together to get through this downturn. So, while we expect ASR January to be smaller than last year, top brands are still supporting the show and are investing in their future. If a retailer sees a brand absent at a show that they have traditionally supported, buyers may draw unwanted conclusions like the brand is in financial trouble, or worse, doesn't care about the needs of specialty retail.
While brands have scaled their spend at ASR January accordingly, the best names in the business understand that a certain level of investment is necessary to propel a brand through a challenging sales climate and short term financial decisions are not always in line with long term strategic positioning. Even with a great rep force, and executives meeting with dealers as much as possible, brands just can't physically see as many retailers as they can at a trade show. If one or two dealers make product purchase decisions based on not seeing a brand at an event well then the marketing dollars saved were in vain as opportunities have been lost,
AT: ASR is being more aggressive this year than ever in reaching out to retailers of all kinds, but especially leading specialty shops to make sure we do everything possible to ensure their trip to ASR. This includes leveraging hotel rates in San Diego, working with airlines to provide the lowest travel fares, and providing on-site services such as food in our VIP area, free parking, and restaurant coupons.
AT: We are still working with the skate community to determine the best way to meet their sales and marketing needs. But on average, January is well timed for skate vendors, so skate manufacturers join the rest of the action sports community in their concern over the issues outlined above,
AT: The trade show industry, like many other forms of media, is in an exciting state of evolution. As show producers we will need to look to new models and different exhibit solutions in the future. It starts with adopting the buyer's perspective - what do retailers need to accomplish at trade shows and how can we deliver these solutions. In addition, from the exhibitor point of view shows must be well timed in an industry's sales cycle with ROI metrics in line with costs to participate. In the future, we expect that strong shows will need to offer different options to exhibitors, understanding that not one sales approach will fit all. This could manifest in more turn-key booth presentations and additional ways to market and develop brand identity,
AT: ASR is a direct reflection of the marketplace, and we want to host a dynamic show that keeps the dream alive for specialty retail and the action sports lifestyle. Now more than ever we need to come together as a community/family to share ideas and collectively figure out a way to keep action sports strong.
ASR is investing aggressively in special events, new neighborhood features and in-depth business seminars. We hope the show will extend the stoke, and provide business leaders with tangible ideas to survive and maybe even thrive in the downturn. If brands and retailers don't come together the results could be disastrous. In today's completive landscape the barbarians are at the gate, and in our case this means the continued march of mass merchant interest in the action sports market.
As an industry we need to continue to innovate on the retail level, support athletes and contests, and provide consumers with an understanding of products and the lifestyle. We need to help consumers understand that product is not only price-point-based and that support of specialty retail is a must. Brands supporting ASR to meet with their top buyers is a platform to accomplish these goals, and fortunately the industry still seems to agree that ASR is a relevant and meaningful part of their business. Many retailers tell me that the relationships they have developed through ASR are a cornerstone to their business success.