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Your Business Commentary

Mike's often irreverent, thought-provoking analysis of the industry-- with an occasional guest columnist.

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Some Thoughts on Consumer Shows

Some help retailers, some don't.

by Mike Hartnett (March 19, 2012)

About three years ago, CHA announced it was sponsoring consumer shows, but did not mention which exhibitors would be allowed to sell. Many retailers assumed everyone, including manufacturers, would be selling directly to consumers and were furious, convinced consumer shows would hurt them.

During the uproar, I researched the effect of consumer shows in other categories. Shows that allowed all exhibitors to sell to consumers – did they, in effect, hurt retailers?

There have been consumer shows in virtually every product category, and so I talked to numerous people on the subject, and the answers seemed to depend on the category.

Finally CHA announced only retailers could sell at the shows, so the furor died down, and the research I did on the subject was moot. But here are some results.

Ceramic shows.

Ceramics – painting "greenware," then firing it in a kiln was a large part of the early craft industry. Numerous ceramic shops – and consumer shows – popped up across the country.

According to industry veterans, there's no question that the shows hurt retailers. Some times "exhibitors" didn't even exhibit; they would park their truck in the show's parking lot and sell off the truck.

Miniatures.

Most of the exhibitors at these consumer shows were true artisans, selling incredible items such as miniature crystal chandeliers and wrought-iron fences. They could never produce items like that in enough quantity to sell to retailers, so consumer shows merely inspired consumers, which had to have eventually boosted retail sales.

Painting.

At one time they clearly helped retail sales. For example, the Society of Decorative Painting's annual convention attracted consumers from around the country and offered classes that provided new challenges to attendees. Certainly attendees spent money at the shows that could have been spent back home, but when they did return home, they probably spent more money during the year than they would have if they had not attended the SDP convention.

Exhibitors did sell at the consumer shows, but for many years at the suggested retail price, so they weren't undercutting area shops. Then the crowds, especially from around the country, began to slip and the price cutting by exhibitors began. That definitely may have hurt brick-and-mortar sales.

Counted Cross Stitch.

Consumer shows probably hurt retail sales because of the nature of the category. Buy a few charts and some floss and fabric, and you're busy for months. For example, a publisher produces a new chart, prints 10,000, and sells out to retailers eager for something new. So the publisher thinks it's a hot seller and reprints another 5,000. But retailers only re-order 2,000 because it's no longer new.

Now the publisher sits on 3,000 copies. What to do with them?

But there were sooo many charts released into the market that no consumer could see all of them. So the publisher exhibits at a consumer show and sells them at a sharp discount. The chart is still new to many consumers, who scoop them up at closeout prices.

That doesn't leave much for the area retail shops to sell.

Bead Shows.

I saw the effect up close and personal. My wife Barbara, a notorious non-crafter, was intrigued with jewelry-making but hadn't really done much until she and I attended the Bead&Button show in Milwaukee a few years ago. When she saw all of the amazing stones and beads, she was hooked. She bought a lot of supplies that day and we've returned to the show every year since.

Since then she has spent substantial amounts at consumer shows, but she's also spent a lot at retail stores, too, money she'd never have spent if not for the inspiration and education at the Bead&Button show.

When I was researching the effect of consumer shows, I asked execs at Michaels and Jo-Ann what effect the Bead&Button show has on the sales in their Milwaukee-area stores. Both said sales drop during the show but increase after the show.

Most bead show exhibitors are small bead makers or importers who are not equipped to sell to retailers who require packaging, UPC codes, etc. They are the industry's gypsies, traveling from one consumer show (there are 150+ each year) to another.

One problem: one year Barbara bought what she was told were small silver spacer beads and made a bracelet for me. Within a month the "silver" had worn off and lo and behold, the beads were brass. If she had bought the beads at a local retail store, she could have returned them for a refund. But the gypsy she'd bought them from was long gone.

A Retailer's View.

I asked Scott Remmers, of Brea Bead Works in Brea, CA for his take on consumer shows. Scott is also head of the Southern California Local Bead Shops Assn., a group of 20-some bead shops. Here's Scott's take on the subject:

"When there are local bead shows going on, sometimes we are slower, but other times we are busy. Many times people buy at the shows and come back to us for miscellaneous items like head pins, stringing materials, etc.

"Lately, we have them coming from a show and asking us to put it together for them. Even though that it is hard to take, since they did not buy it from us, we turn the situation around and tell them we have a workshop to help them design. Or we will create a bracelet or whatever, but there is a fee. Many times the customer doesn't understand why they have to pay $20 or higher for us to put it together, so we go through the steps, including that it will also take up to two weeks or more because of other repairs and projects ahead of them.

"The typical response to the shows are that we can't carry everything. So hopefully our customers will just create more projects with the new purchases and come to us for the other items. Maybe others who attend the shows don't know that much about beading, so they search out their local bead stores to learn more.
"What all the LBS (Local Bead Shops) owners get ticked off about, and this is no secret, is that so many of the gem show dealers raise their prices way too high, discount the prices  50%-80% off, and it comes down to retail or just below.

"So the customers are duped into believing it's a great deal. They come into the stores and think the LBS is over-priced. It's the pricing issue that I believe is hurting us. So many times when I have talked to customers, they say "I can get a strand of pearls for $18 at the show because they are 80% OFF and yours are $20." I ask them if the quality and style of pearl is the same and they come back with "No but…." So many times the comparison is off but the perception of higher prices stay in their mind.

"The ugly part of so many of these gem shows are that it's not all gems/beads/findings. It has become a swap meet! The quality of gemstones has come down a lot at these shows. "Not all vendors, but many of them, are selling average and below-quality strands. So they are blowing them out and people again get a perceived value that everything should be cheap.

"The last couple of shows I have been to here in Southern California have people selling bed sheets, sunglasses, and even some health-care, vitamin stuff.
"Just like every master retailer has said, the shopping experience in the stores will win the customer over. That is what we have to trust will happen."

xxx

 

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