From the start of the Great Recession to now, the exhibition industry has taken a wild ride, only recently emerging from a veritable free fall that plunged countless businesses into the Recession abyss. Some were never to be heard from again, while others managed to right themselves and hang on long enough to let the worst pass. Research suggests the storm clouds are clearing, but the landscape left behind in the trade show and event marketplace has been permanently altered, and a great many within it have had to adapt to a new environment in order to survive.
For no assemblage is that truer than general service contractors (GSCs), a group that collectively saw its operating revenue as much as halved during the worst years even as providers assumed new responsibilities in order to compete for business. Mergers and acquisitions caused the overall number of players on the field to shrink, but competition between those that remain is more robust than ever, industry officials say. “First, we’ve definitely seen the industry consolidate as GSCs look to acquire new clients. That, of course, is the major drive of the acquisitions that shrank the GSC universe,” said Dan Cole, executive vice president of trade show and exhibit sales at Hargrove Inc. “But competition remains fiercer than ever, as does the quest for optimal margins and revenue contribution.”
The degree to which a company was impacted during Recession years seemed to depend on its size, said Aaron Bludworth, president and CEO of Fern Exposition and Event Services. “The largest and smallest contractors were probably hit the hardest, the largest due to a decrease in exhibitor participation on the largest shows and the smallest due to lack of diversity,” he said. According to Bludworth, the diversity of Fern’s portfolio insulated the company some, but not all were so lucky. “Not many contractors closed, but some endured significant amounts of pain,” he said.
Jim Gardner, an account executive at Great Lakes Events, believes many small- to medium-sized GSCs found themselves working in a much wider area to sustain themselves during tough times. And a lot of companies had to make internal adjustments that allowed them to weather the lean years, said Evan Garvey, executive vice president at AGS Expo Services. “We didn’t let anyone go, but everyone took a haircut,” he said. “We needed to do more with less, and we emerged as a much leaner, more efficient industry.”
Some changes spurred by the industry’s economic troubles are here to stay, particularly the shift from solid exhibit construction to lightweight fabric, said Garvey. “The profile of shows changed significantly as people went from heavy, complex displays to lighter displays with printed fabric graphics,” he said. “That seriously reduced the weight on the show floor, which caused budget cuts and impacted how decisions were being made.”
The other new frontier for post-Recession contractors is the increasing need for them to supply a range of services that were never in their domain before. At Global Experience Specialists (GES), said chief sales officer Jeff Quade, the company has added audiovisual, event accommodations, event strategy, registration, visitor engagement and data to its arsenal of offerings.
Garvey said AGS now works more with drone footage, graphics printing, and surveying. Others speak of similar additions to their wheelhouses, but the main theme among them all is an effort to innovate in order to drive new revenue and be more competitive. “While creativity and innovation have always been a hallmark of our ability to thrive in the marketplace, there’s definitely a healthy pressure to not stand still in the pursuit of these objectives,” said Hargrove’s Cole. “New offerings in terms of technology, marketing services, and data analytics are among the ways that many GSCs are getting creative in terms of new revenue streams. The secret lies in delivering meaningful results for clients rather than just window dressing.”
Aside from raising revenue, offering more multifaceted services may keep independent general service contractors relevant in an environment where venues and show organizers both might be tempted to offer GSC services themselves in order to keep more revenue closer to home. Cole believes that would be penny-wise but pound-foolish for them, as the duties fall well outside their core capabilities. But he also believes that show organizers increasingly want contractors that are able to help them build their success, not just lay out the show floor and order pipe and drape. “We’ve found our clients urging us to challenge them, to question their strategies and their tactics, and not to be shy in doing so,” Cole said. As such, areas such as devising sponsorships or assessing return on investment may have been outside of scope in the past, he said, but not anymore. Bludworth agrees. “Contractors are expected to be solution providers today instead of stuff providers,” he said.
Essentially, Quade suggests, to compete for the business, contractors need to make themselves indispensable to their clients. “They must provide flawless execution by offering a wide array of services to the exhibitor while simultaneously assisting the organizer with ways to enhance and provide a ‘wow’ experience to the attendee,” he said.
Looking forward, various GSC leaders see an assortment of different things on the horizon, but the thing that none of them see is virtual events. “On show floors, we can still see the real benefit of face-to-face interaction,” said Gardner. “As the economy gets stronger, I feel that the concept of virtual tradeshows will become less attractive.”
Cole expressed the same in even stronger terms. “Personally, over and through the 25 years of my work in the industry, I never had a tremendous amount of confidence in virtual events,” he said. “My boss and mentor at the Consumer Electronic Show puts it best when he says that there is not, nor will there ever be, anything like the five-senses experience of a trade show.”
Individual shows may continue to seek efficiencies by co-locating, GSCs agreed, though Garvey notes that it might be just as likely for one show to consume another with a similar vertical rather than partner with it. Better efficiencies for some can be found in regionalizing instead, he said, which entails offering smaller shows multiple times a year in different geographic regions. For attendees, he said, such shows can be more convenient, and his clients have found their metrics are on the rise even after breaking a large show into small regional affairs.
Garvey also believes the exhibition industry is pivoting towards an era when more companies will be offering their own large-scale event rather than participating in industry trade shows. Doing so allows companies to offer a unique experience for attendees that is more brand-heavy and very narrowly focused, he said, which company officials may see as a better way to achieve ROI. Companies may even invite certain partners to exhibit or otherwise participate in those highly branded events, turning them into organizers of sorts themselves.
The difference might be negligible for general service contractors, as the events may still need the broad range of event management services they provide. But the pressure is on small and mid-sized GSCs to be able to offer enough of those services to compete with the big players on the field for the business.
There are hundreds of general service contractors, or, as some prefer to refer to themselves, official service contractors. But most fall into the realm of small to mid-sized providers who can find it difficult to compete with the giants in the industry because they cannot offer the same steep discounts or vast bundles of services, or perhaps because the size of a show is at the outer limits of their capabilities. But the landscape is far more competitive for exhibitors and organizers when there are more contractors in it, so some on the smaller side of the playing field advocate more intentional partnerships to help more GSCs vie for business.
There are situations in which a small or mid-sized contractor has been awarded a contract based on the condition that it partner with another GSC, Gardner said. This has stemmed from a fear that a small company might not have the finances or personnel to produce a large event alone, Gardner explained. Currently, because it is so difficult to compete with industry giants, many smaller GSCs don’t even try for larger, more lucrative events. But it doesn’t have to be that way, he believes. “Small to mid-sized GSCs should form alliances which will allow us to be competitive on larger-scale events,” he said. “We already subcontract to each other as necessary for components such as personnel or equipment. We could take this one step further and write proposals based on temporary partnerships. Such an alliance would create many competitive opportunities.”
Garvey thinks the area where small and mid-size contractors can set themselves apart from larger companies is in an abundance of communication that gets to the heart of what a client needs for their program. “We have to be better at relationship management,” he said. “Clients aren’t just a number to us, they are people, and we spend a lot of time sitting down with them to understand their goals. You have to ask yourself how can you help them to do what they do better?”
While size may matter to some degree, what all GSCs really need to be focused on in the future is substance, Bludworth believes. “If technology innovation, marketing support, sponsorship tools, and data analysis isn’t part of your offering, you are heading in the wrong direction, he said. “Fern and the other top three contractors are aggressively innovating in these areas, each on our own path and the products and services being delivered are very good for the industry.”
Cole agrees. “In terms of changes to the nature of the work of GSCs and exhibitors, and I should add show management, I think you’ll see the need and even the expectation that GSCs have a firm, sincere grasp of innovation,” he said, “but also the ability to serve as experts in helping show management in communicating the what, why, and how when it comes to changing perceptions and assuaging fears of the positive ramifications of new technologies.”
Cole fears that the industry as a whole is poised to lose its footing if it does not understand, embrace, and employ more people with the millennial mindset. “I’m convinced that there is a danger of falling asleep at the wheel regarding perhaps the biggest development of all in this industry,” he said. “Never before have we seen such a dramatic transformation in the nature and demographics of influencers and final decision makers who hold the key to which contractors will serve them. Millennials see our industry through drastically different prisms. Their expectations are often vastly different from anything which we’ve dealt with in the past. All of us – all solution providers – must recognize this fact and leave ‘old-school’ tactics behind.” Among the new-school tactics Cole believes will be at the forefront will be grasping and implementing all manner of innovation and technology without allowing it to replace meaningful communication with clients.
Garvey also believes the exhibition industry will welcome many inexperienced professionals in the future, and that the responsibility is on GSCs to educate them and make the experience less intimidating. “It can be very overwhelming,” he said, “and while we’re used to doing things on the fly, we have to want them to be successful too.”
It is just one aspect of servicing clients better that Garvey believes will be instrumental for GSCs that hope to remain viable in a marketplace that has experienced a fairly tumultuous recent past. Things like the changing roles of GSCs, the questions raised over the role of union labor, the introduction of tech-savvy millennials to the exhibition world, and the unbridled consumption of smaller industry service providers by the largest GSCs have left many wading in uncertain waters, and those intending to stay need to be on top of their game. “I actually think that the industry is, for the first time in 20 years, evolving in some very complex ways,” he said.
Bludworth doesn’t believe that the industry at its core changed too dramatically during the recession, but he says the contractors and other participants who are now thriving are those who used the time to innovate rather than dwell. “Though already a very efficient company, at Fern we refined our processes, adopted new technologies, made acquisitions, and made creative offers to show organizers whose shows had been significantly impacted,” he said. “While their former provider was reeling (and complaining) about the negative impact, we were providing solutions in the form of different approaches, pricing, products, etc.”
That proactive approach kept the company and others like it ahead of the curve, but no one is ready to speculate whether there is an end to the curve in sight. Without a map to follow, the mode of operation for many is to just keep steering, avoiding anything that looks like an obvious hazard and guessing what might be looming ahead. Everyone agrees that the industry is entering a new era, but it seems that this, at least for the time being, is what the new frontier of the exhibition world looks like.