The Uncertain Return Of Tech Trade Shows

October 6, 2021 by Dave Haynes

Guest Post: Meghan Thompson, STRATACACHE

As we march toward 2022 with a still uncertain live event outlook, B2B leaders are looking closely at the business value of these high-cost, face-to-face events and asking the question: “Will the trade show of the past, remain just there … in the past?”

You’ll perhaps recall walking the floor of a pre-pandemic trade show, seeing the pristine booths filled with professionals shaking hands and showing off their latest technology and product solutions. Many months of behind the scenes planning went into those booth, and getting to being show-ready is not always apparent on the surface.

Having spent the better part of the last decade leading trade show strategy and exhibits for technology solution providers, I know first-hand that most large scale exhibitors begin planning at least a year in advance – investing 1,000s of person hours and hundreds of thousands, often millions, of dollars into participating in a two or three-day event.

Doing that work in the STRATACACHE family of companies involves internal planning and coordination across departments, including ideation, solution development, determining design and technology requirements, pre-show marketing, travel and logistics. Then we layer on the added cost and coordination between numerous external parties such as exhibit houses, show service providers, shipping carriers, staging, on-site labor and other outside vendors.

All in, it takes many people and a LOT of money to deliver a top-notch trade show experience, but there’s often the question of whether these events truly generate the business connections,  opportunities and ROI we hope to realize.

The respite from most large-scale trade shows over the past 18 months has given marketers ample time to test and invest in alternate lead generation strategies – with many stepping up their digital marketing initiatives, investing in sales-enablement tools and dipping their toe into virtual events.

At the same time, the live event industry is buzzing about the biggest challenges impacting the return of their events. What’s the best way to work through increased labor and materials costs? When will supply chain and manufacturing delays be resolved?

Also top of mind are ongoing corporate travel bans, lingering safety concerns, and the changing mindset of the business traveler. Let’s dive into what these factors and the current research are telling us about the short- and long-term return of face-to-face events.

What is the current research telling us?

While venues and U.S. states are open for business, COVID-19 spread, vaccination rates and business travel restrictions have already wreaked havoc on the anticipated return of trade shows this fall.  For many US office workers, plans for September in-person re-openings were often stalled. Inside some of the largest organizations, business travel now requires new layers of approval and is limited to business-critical trips only.

In addition to stalling corporate travel, the new distributed workforce has led many organizations to seek out longer term solutions and more sophisticated virtual collaboration technology, like the  OneRoom solution marketed by X2O Media.

Some of the country’s largest convention hubs, in the most exhibitor friendly cities – think Florida, Nevada, Arizona, Georgia and Texas – are also the areas of the country least-ready to get back to live events, according to the Return to Live: Recovery Index, which measures live event readiness based on health, demographic and consumer sentiment data. Does this mean we are going to see a big uptick in conventions in Wisconsin, Minnesota and New Hampshire? Maybe, but in the cities where business travel and trade shows are woven into the fabric of the local economy, convention and visitors bureaus will seek to maintain their dominance.

In a national survey sponsored by the American Hotel & Lodging Association last month, 52% of business travelers responded that they are likely to cancel travel plans, with no intent to reschedule. Specifically related to air travel, according to the Wall Street Journal, Delta was seeing a solid rebound of corporate travel through the summer months and was anticipating reaching 60% of pre-pandemic levels by September. But, according to Delta CEO Ed Bastian, they won’t hit that number.

For vertical-specific trade shows, the airport and airline industry itself is still holding out hope. Plans to host a face-to-face ACI-NA Conference and Expo in November are, ambitiously, still on, but the question remains — will they make an eleventh hour no-go call like the NAB show?

In early August, Deloitte released a study on how the pandemic has reshaped corporate travel. Even before the late summer surge in Delta variant cases, travel managers interviewed for the study indicated “employee and client resistance to travel and in-person meetings as one of the biggest potential factors to slow the return.”

Among the most notable mentions in the article was that the reluctance to travel for business will reach its highest point in the winter of 2021–22, with concerns about cold and flu season, coupled with fear of more COVID outbreaks remaining top of mind for business travelers.

This is particularly notable around our company as we continue to press forward, and remain hopeful that our kick-off event for the new year – NRF 2022 – Retail’s Big Show – will stay on track for a January 16 opening in New York. Strategically, we’re planning to feature retail solutions that can be used in our NRF booth and in our office Experience Centers, making sure our efforts have reach beyond a single trade show event.

Short term: Where does this leave shows in Q4 2021 and early 2022?

The 11th hour cancellation of the NAB show – originally scheduled for October in Las Vegas – is one of several recent in-person shows to cancel and cite “insurmountable challenges” from the pandemic. This news struck my colleagues and friends in the digital signage and AV industry rather hard, since this sister show has a lot of exhibitor crossover to our core industry events, especially the upcoming InfoComm show in October.

On a recent webinar put on by exhibit powerhouse Skyline, it was noted that the cancellation of the NAB Show could be an indicator of what’s to come for shows in the near-term, particularly in the tech industry. A representative from Skyline Exponcon said: “The National Association of Broadcasters is really guided by a very small number of very large firms.”

The discussion suggested this approach is one way for the biggest players in the industry to exert their dominance and push the smaller exhibitors out of view. Since these companies have influence across the tech industry, we might see this same scenario begin to play out at other shows.

On the topic of tech, the semiconductor shortage is still plaguing the industry, causing delays of new products and driving AV rental prices up (for any vendors still lucky enough to have inventory). Cost of construction materials remains a heavy consideration in trade show planning, as well. After the surge in lumber prices in spring 2021, prices are beginning to normalize and are back to October 2020 prices. The cost of shipping freight continues to skyrocket, with costs being driven up by labor shortages, fuel prices, and disruptions across the supply chain. Getting your booth to and from a trade show – on time and intact – will be yet another hurdle for exhibitors to overcome.

Rental exhibits are a good stop-gap measure for exhibitors who are wanting to reduce their financial exposure but are not ready to give up on 2022 shows, yet. By renting exhibits from large-suppliers like Skyline, or tapping into boutique shops like The Rogers Company, organizations can avoid the heavy CAPEX expense of building a new booth for a show that might not happen.

Once you are at the show, exhibit industry leaders have reported that some venues are eliminating hall carpet and organizers have suspended the use of badge scanners – all in the name of health and safety. Additionally, labor shortages in the hospitality industry will have a cascading effect on the event industry recovery, as well. Everything from hotel check-in, taxi queues and lines at convention center concessions means getting to the show and grabbing a midday lunch will take longer, and erode business productivity.

All of these factors punctuate the critical need to plan ahead.

If you are planning to exhibit in Q4 or Q1 2022, now is the time to examine past event data, request regular registration updates from organizers, frequently review hall maps for exhibitor attrition, and be ready to pivot your trade show exhibit plans quickly. Assume no less than a 35% reduction in attendees from past events and assess whether the event will deliver the anticipated ROI.

Long-range outlook: Changes that will stick

The global COVID-19 pandemic has accelerated digital transformation and forced a closer examination of situations where face-to-face interaction is most critical to business success. We have a long road ahead though. In April, McKinsey and Company reported that air travel wouldn’t reach 2019 levels until 2024, with business travel only hitting about 80% of pre-pandemic levels.

Prior to the pandemic, B2B event organizers were moving toward networking-heavy event models that sought to match solution providers with prospective clients. Standalone companies such as Connecting Point Marketing Group (CPMG) organize and host a dozen or more of these events per year that exclusively focus on strategic interaction across various industry sectors. Other events like Shoptalk seek to combine one-on-one meetings with a traditional expo format.

According to Deloitte’s August 2021 report, industry conferences with strong networking opportunities are said to benefit the most from in-person interactions, and rate these types of engagement as having a high impact on business success. The traditional expo and trade show format (sans the heavy networking) is less essential to business, and not as easy to replicate with technology. Virtual booths are not the answer.

The pivot to virtual and hybrid events has not proven entirely successful, with organizers overpromising on the lead generation potential and under-delivering on the actual exposure that sponsors are getting out of the event. While these events do have the potential to reach wider audiences and offer significant cost savings to both sponsors and attendees, their greatest value comes from thought leadership content – not virtual booths or online networking platforms. I’ve yet to see a virtual event that delivers the same value of engagement as a face-to-face event.

According to the AHLA study, 71% of business travelers plan to attend fewer in-person events. As a result of increased scrutiny, approval layers and travel hesitance, business travelers will continue to be more selective about the events they attend and will seek out those that have the greatest potential for meaningful one-on-one interaction. Moving forward, event organizers will need to deliver more value to both attendees and sponsors in order to justify time out of the office and the overall cost of participation for exhibitors.

Conclusion

It’s not all doom and gloom, as there are some silver linings. The summer of 2021 gave us a brief glimpse into trade show recovery. The sentiment from industry insiders is that while overall show attendance was down, the quality of the visitors was up. Therefore, the people who are going to events, have a greater need to buy. Trade shows reportedly felt “normal” too. Hand sanitizer was plentiful, but one-way traffic, plexiglas dividers and social distancing signage were not the norm.

I wish I had a crystal ball to know what’s going to happen with B2B events and trade shows in 2022 and beyond, but one thing we have learned from the past 18 months is to live in the present, but learn from the past.

Our trade show future may look different, but we’ve learned over the past year that building business relationships is not about shaking hands and giving face-to-face demos. It’s about storytelling and forging relationships, asking the right questions and getting to the root of what your customer needs. In-person or online, business is on the rebound and a new era of events is on the horizon.

ABOUT THE GUEST WRITER

Meghan Thompson leads the Americas-based marketing organization for STRATACACHE brands. Based in Dayton, Ohio, STRATACACHE is “accelerating the shift of digital retail transformation by having a full scope of technology under one roof. Our retail solutions allow us to be partners in creating an in-store evolution, fitting into your existing ecosystem by connecting different technologies to truly drive a frictionless store visit. We’re making a frictionless shopping experience even better.”