RAPAPORT... So the great Las Vegas show has once again come to an end. While exciting, the many events and cocktail parties had me pondering the real significance of trade shows in our industry. It seems to me, having had the opportunity to attend many such venues, that the amount of business conducted, compared to the busyness and costs involved with such events, is minimal. One of the first topics covered in any college economics course is opportunity cost. Opportunity cost is the cost of a commercial decision in terms of the value of the alternative that is forgone. Keeping this definition in mind, is the increasing amount of trade shows occurring globally worth our time and money?
The ever-growing number of trade shows being promoted is due to the willingness of those within our industry to attend and pay for them. While important, the emphasis put on exhibitions in our industry seems to be related to the old way of conducting business. The same faces and booth designs seem repetitive. Analysis and comparison of one show to another has become exasperating. There is a need for us to begin focusing our energies on the bottom line of our respective companies and forgo the pleasure of constant networking. Although important, connections are no longer enough to keep one in business.
And what happens when a new or existing show fails to deliver the desired results? Here is where economics lesson number two, simple supply and demand, comes into play. With demand exceeding supply, show organizers have become ever more influential and demanding. Companies experiencing poor results are fearful of giving up their booth space. There are also promises of premium locations for those participating in multiple shows. So while a company might not be realizing positive results from a specific show, it will allocate more capital toward trade shows in hopes of eventually “succeeding.”
Another disturbing issue for many of those participating in shows such as JCK Las Vegas is the emergence of the preshow concept. Couture, Continental Buying Group (CBG) and others seem to be stealing some of the spotlight. While some might consider the phenomenon to be absurd, numerous companies have become accustomed to diversification. I am, of course, not referring to the investment of profits from the shows but rather investing in additional booth space at multiple locations.
The supporting argument for the benefits of trade shows is, of course, the creation and reinforcement of relationships. An exhibition provides organizations and individuals with a venue to meet and build successful business partnerships. While the sale of product is important, relationship building seems to be the prevailing attraction for many trade show participants. I, myself, hosted a party for those aged 30 and younger in order to enable our emerging generation to meet their colleagues and get acquainted with individuals entering the diamond industry and making a difference.
Although I understand the importance of relationships within our trade, people have come to rely exceedingly on this phenomenon. Today’s buyers have no conception of long-term relationships. Big Box retailers such as Wal-Mart will relentlessly squeeze their suppliers, only to allocate their purchasing power elsewhere when a cheaper or more attractive option becomes available. The business-to-business (B-to-B) environment is experiencing somewhat the same trend as well. Whether it is vertical integration by sightholders or the sheer greed of wholesalers and brokers, relationships alone do not determine one’s ability to succeed in today’s ever-global and competitive environment. Actual business must be done and positive results must be obtained. Talk is cheap.
So whether this trade-show frenzy will continue is yet to be determined. The settings of our business transactions are rapidly altering. Shifts in demand will create dynamic environments. Only time can tell if trade shows will remain a part of a diamond entity’s marketing budget.
Article from the Rapaport Magazine - July 2007. To subscribe click here.