Needs a little shaking up: the future of the biggest duty free trade show in the Americas
It’s probably safe to say the main topic of small talk during IAADFS wasn’t small at all; it was the future of the event itself. At booth after booth, party after party, veterans of the industry spoke of the old days when the aisles were busy and new exhibitors were asking, “Is this normal?”
Quality vs quantity
This was the second consecutive year in which numbers fell, and yet in the next breath after discussing the decrease in numbers, most people who had booths said it was one of their busiest years to date, and these booth operators said the quality of the visitors was profound, with many new deals.
President and CEO of IAADFS, Michael Payne, had a similar experience. “I expected to get an earful when I stepped on the trade show floor,” he says, “but for the most part people were very pleased with the way the show was going for them.” Certainly, the majority of booth operators that Americas Duty Free representatives spoke to were in agreement, saying their days were busy, their appointment books were full and the visitor quality was high.
Be that as it may, a quiet trade-show floor is never a happy thing, especially for smaller brands, which may not have the opportunity to pre-book with their customers. Sure, there are some obvious reasons for this slowdown:
• Acquisitions in the industry have decreased the number of buyers
• The economy in LATAM has been down greatly, and so retailers from that region send fewer representatives
But it’s also important to note that many of the usual people seen wandering the aisles are irrelevant to brands and other booth operators. Those numbers are made up of booth employees on a break, hosts, hostesses and others just checking things out. When you decrease the number of people you send to a show as a brand, you decrease the number of people at the show. When a number of brands make the same decision, the outcome is inevitable. This brings to mind the person who is sitting in traffic complaining about the number of vehicles, not taking into consideration that his vehicle is one of them.
Indeed the respective numbers bear this out: Whereas allover delegates are down from a high of 2680 in 2015 to 2034 in 2017, for a decrease of 24%, buyer numbers are down from a high of 662 in 2015 to 602 in 2017 – a drop of only 9%, and this during a time of major acquisitions, consolidations and bad economies in the region. In other words, the decrease is, to some degree, an illusion.
Perception is reality
Perception, however, does become reality, and therefore – in the words of one marketing manager (who also said the show was very busy for her brands) – things need a little shaking up. And what is not an illusion is decrease in the number of booths, which has dropped over 25%.
How will the most important trade show in the Americas for the travel retail industry continue to be relevant in the coming years, and even grow with a growing industry?
On the part of the IAADFS, it is working hard to figure out the best ways to make this happen. Certainly, the association with ASUTIL and FDFA for the coming Summit of the Americas is an important step. The transition has already begun to occur, with the participation of all three sub-regions in this year’s education series.
This year the association focused on attracting buyers from the Caribbean, a strong region whose retailers had in the past faced rules that made attendance impossible, and indeed many booth operators saw an increase in Caribbean deals.
Payne feels a big part of his mission in coming months will be to bring back some of the bigger P&C brands, which will in turn ensure the attendance of key decision-making buyers. More key buyers equals more booths.
It’s worth noting here that IAADFS must book its space well in advance, at least in its current home. So when major events such as Prowein or Baselworld clash with IAADFS it is not the association making a bad timing decision; rather it is those organizations not taking IAADFS into consideration.
A thoughtful discussion
Andre De Almeida, a man well known in the duty free industry, has a personal blog called Inside the Cask, where he discusses relevant topics. His post IAADFS blog garnered a lot of attention with his opinion on what will garner the necessary changes.
• In absolute agreement with Payne, he calls for increased support from GTR buyers. [The question is, how to make this happen?]
• De Almeida believes the show should remain in Orlando, whether or not at the same venue. He argues that a different location will make it too difficult for small to medium brands to ship their supplies, stands and people. [As Payne says, no location choice post 2018, when the current contract ends, will make everyone happy.]
• Actively pursue and showcase “TED” (technology, education and design) innovation in retail. [Retail too needs shaking up, and any stagnancy of the show, it could be argued, is a reflection of the industry as a whole.]
• Lower the barrier to entry for new suppliers. [“New” is the lifeblood of growth and innovation. On his blog De Almeida has some interesting ideas for accomplishing this.]
• Facilitate further supplier/buyer interaction. [The buyer table setup is one of the great aspects of ASUTIL, and the organizations are trying to look at ways of incorporating a similar setup into the Summit of the Americas. This is just one aspect of De Almeida’s point; figuring out how to convince buyers to attend social events is very important and perhaps providing important educational events instead is the key.]
• Showcase what is new and the best practice from retailers over the past 12 months. [An awards presentation, perhaps? FDFA does this each year. De Almeida suggests using video and other technology to bring this to life.]
Industry, heal thyself
It was apparent walking through the trade show that some brands put a lot more effort into achieving their goals at this event than others did. “You must make it work for you,” said manager after manager. “You must make your appointments ahead of time.” On the suggestion that this might be easy to say when you are established but a touch more difficult when you’re a new brand, managers noted brands such as Gold Bar Whiskey, which is new but still garners tons of activity and attention, bringing to mind the activity in booths in the past – hosts and hostesses, people in costumes offering samples, parties and events.
When you think about it, this makes perfect sense: the industry is all about capturing attention from the traveling consumer, and if you’re not working at capturing attention from the buyer, then why would that buyer think your product will work?
The bottom line
Three things are apparent.
1. All individuals in the industry need to support the industry as a whole in order to guarantee their own success. Like the proverbial traffic jam mentioned above, where one individual does not see his/her part in the traffic on the whole, individuals within the industry don’t see their own part in its success or failure.
The associations including FDFA, IAADFS, ASUTIL and others are continuously working on your behalf. It's in your own best interest to support them in return.
Buyers who insist that the brands come see them instead of attending the show themselves end up limiting their own buying power. The next big thing is not in your office; it’s in the creativity and ingenuity of those who are up and coming – in product development, display and technology. Which is a great segue into number 2.
2. The associations need to step into the future. Regardless of whether your focus is “the Millennial,” the reality is, the way people shop is changing. Travel retail is a huge and growing opportunity and it WILL catch up. The question is whether it will catch up with you or without you. It is the associations’ collective responsibility to help their members succeed in this new environment, and to that end need to be leaders in presenting, showcasing and really putting great focus on, as De Almeida says, “TED” – technology, education and design.
3. Brands need to be their own best ambassadors. At a meeting Wednesday afternoon, Fabien Oliaz, Sales Director Americas for Camus, offered great insight. He said, “We each have to provide our grain of sand,” which echoes number 1 on the list above. Oliaz noted that many of the booths had already closed up, although he had meetings booked right up until 5:00, and he was incredulous that some major brands did not even have booths this year.
“Some people say trade shows are old fashioned,” he commented. “They say we don’t need them now because we can all communicate by email. I completely disagree.” He said no email or even phone call can replace seeing your customer face to face, introducing the product, having the buyer sample the liquid or hear the story behind it. Nothing will ever replace human connection.