Trade show scenarios: preparing for change.

The future of association expositions and exhibits, as envisioned at the ASAE Foundation's think tank.

* Expositions have a bleak future. More expensive and less effective than new channels to the marketplace, half of today's expositions will cease to exist within 10 years.

* Expositions and exhibits have a bright future and will continue to be integral to the association marketing mix. The value and importance of expositions will increase, as they will offer a cost- and time-effective way of doing business.

Either alternative is possible. The future of expositions and exhibits depends on the decisions association executives make in the next few years. With either alternative, the future will be different from the past.

In three days last fall, the ASAE Foundation-Hyatt Think Tank focused on the future of association expositions and exhibits. Working collaboratively, the think tank participants came to grips with a range of potential futures and developed specific strategies in response. The result was not only insight into the future but practical advice to help association executives manage today.

As it does to all things, change has already come to association expositions. Think tank participants began their discussions by identifying how and why expositions have changed.

Ten years or so ago, expositions focused on marketing efforts rather than sales. Seen as a perk or reward for attendees, social activity was the major drawing card. Mass marketed, expositions were "all things to all people." Often lavish exhibits followed the "bigger is better" philosophy.

With favorable tax laws, expositions provided nondues revenue growth for associations. Cities, interested in revitalizing the urban core, invested in convention centers--upgrading and expanding available space. An expanding economy allowed exhibitors to participate in expositions as a way to support the association.

Expositions today

Looking across the association community, think tank participants identified several interesting patterns and commonalities:

1. With tighter marketing budgets and greater expectations for sales and return on investment, exhibitors choose exposition venues carefully.

2. Exhibitors demand more support from show sponsors, wanting help in qualifying leads. To continue investing in an exposition, exhibitors increasingly must show direct sales results.

3. Attendees are more sophisticated and come prepared with specific questions.

4. Participants walk the aisles less and use the show to gather information and make comparisons. Social activity takes a back seat to education and information.

5. With a global economy, shows are becoming more international, with more non-U.S. exhibitors and attendees.

6. Competition for exposition attendance has increased.

7. Booth design is more flexible, more durable, and more user- friendly, as well as less lavish and more businesslike in general.

8. Safety and security issues concern both attendees and exhibitors as urban violence and decay proliferate.

9. Both exhibitors and attendees focus on value received for time and money invested.

10. Show sponsors are asked to provide a variety of services, from office machines and work spaces for attendees to day care.

11. Profit margins are becoming thinner.

Implications of future trends

Think tank participants analyzed future trends and the implications of these trends on the exposition environment. They made the following assumptions about the trends of the next decade:

Strategic alliances. Exhibitors and association show sponsors will work more closely together, with more sharing of marketing and purchasing data.

This information about members and show attendees will become a revenue generator for associations and will be vital to the target marketing that exhibitors will need to prequalify leads. More associations will co-sponsor shows, or co-locate complementary shows, to enjoy competitive advantages and reduce costs to attendees.

Service orientation. How the attendee defines quality, value, convenience, and user-friendliness will determine how shows are designed. Ongoing show evaluation and assessment will involve statistically projectable consumer research.

Show design. More European-style booths will emerge, with private meeting areas. Shows will feature conference pavilions, offering on-site, scheduled meetings among exhibitors and attendees. "Reverse" expositions will be tried, with buyers in booths and exhibitors coming to them.

Safety and security issues. An aging population and deteriorating urban centers will force more shows and convention centers to spend more money for security. Show locations will be increasingly judged through perceptions of safety. Convention centers in "edge cities" and in outlying suburban areas will compete with central-city locations.

Cost escalation. Costs for travel and lodging will increase faster than inflation, especially for key destination cities. Consequently, exhibit space rental increases will be kept down, possibly eroding profit margins for association-sponsored shows. Secondary-city destinations will become more attractive and competitive as the costs of meeting at major destination sites rises disproportionately.

Global impact. U.S. shows will see more international exhibitors and attendees. U.S. exhibitors will participate in more foreign shows. Associations will seek international show opportunities.

Technology use. More exhibits will feature interactive technology, including virtual reality. Visitors to booths will don helmets that will immerse them in 3-D simulations. Virtual reality participants can "tour" facilities or investigate products using computer simulation. Sensors on the show floor will pick up signals from encoded name badges, tracking attendees and providing data to exhibitors about who was attracted to their booths.

Teleconferencing will extend the exposition to those who could not attend. Not all attendees will be present. Roving camera crews will interview exhibitors, transmitting the images to teleconferences being held throughout the world. Attendees will commission camera crews to interview and videotape specific exhibitors.

Not all exhibitors will be present. At scheduled times, attendees will arrive at teleconference centers on the show floors to talk with exhibitors transmitting from their offices or manufacturing plants.

Shows will increasingly involve computer technology for registration and other management tasks.

Demographic diversity. Attendees and exhibitors will reflect the changing demographics of the workplace, with more racial and ethnic minorities and women. Sales and marketing strategies, advertising themes, and presentations will respond to these changes.

Political pressures. Favorable tax laws for expositions will come under attack. Rules and regulations will increase and the costs of compliance will escalate.

Changing expectations. Attendees and exhibitors will sharpen their expectations for value, service, and quality. Show sponsors will be pressed to quantify return on investment for all participants. Bringing buyers and sellers together economically will become the measure of success. Bottom-line return--not marketing, or positioning, or supporting the association--will drive the decision to exhibit.

Competition and consolidation. Association-sponsored expositions will face increased competition from both for-profit and nonprofit organizations. Shows that are only marginally profitable will consolidate with others or disappear from the scene.

Future choices

Alternative futures, or scenarios, identify responses to the potential consequences of trends. Scenarios become anticipated futures. By developing strategies that respond to various scenarios, association executives can rehearse for the future. More importantly, developing strategies for various alternative futures enhances the decision-making process today.

Working in two subgroups, the think tank participants developed two alternative scenarios. The "Most Probable Optimistic Scenario" was described by one subgroup: "The surviving expositions are integrated events that address the economic needs of domestic and international markets, as well as education and technological needs. Sponsoring associations will grow. Technology will facilitate trade show management and exhibitor sales functions, improving the quality of the experience for participants and accomplishing more specific, identifiable, and realistic objectives."

Based on the trend analysis, the think tank participants gave this scenario an 80 percent likelihood of occurring by 2002.

The other subgroup described the "Most Probable Pessimistic Scenario":

"The supplier-to-attendee ratio continues to decline; costs escalate in the face of a declining or stagnant economy. Few acceptable venues are available as safety and security issues mount, urban infrastructure breaks down, and costs escalate. The quality of shows declines, fueling a downward spiral in the trade show industry, having a major impact on association revenues and therefore increasing pressure on association executives."

According to the think tank participants, this scenario has a 40 percent likelihood of occurring by 2002.

Recommendations

Working independently, each subgroup developed specific strategies appropriate to either the optimistic or the pessimistic scenario. To the surprise of the participants, strategies overlapped considerably, despite the fact that they were developed for two very different scenarios. Coming to consensus, the think tank participants developed recommendations to help association executives prepare today for the expositions and exhibits of tomorrow.

Consider going deeper and broader. Consider international, regional, and local shows. Integrate products and services at the exhibit horizontally and vertically within a market or field.

Use technology. Enhance the connections among buyers and sellers to increase return on investment. Provide technology to link teleconferencing, meeting scheduling, and attendee tracking.

Seek alliances and partnerships. Provide more sophisticated and targeted buying information on show attendees to exhibitors. Look for co-location possibilities with other shows. Consider co-sponsorship with other associations.

Continually conduct market research to help redefine and reengineer the show. Design the show around customer needs and develop a culture of total quality management. Research the possibility of expanding to different market segments.

Diversify show activities and format. Experiment and innovate. Create demonstration centers, offer conferencing facilities, and provide for teleconferencing. Investigate ways to better integrate education into show activities.

Establish an outcomes orientation. Encourage participants to set meaningful, measurable objectives, thereby creating a climate of purposeful participation.

Respond to changing demographics. Ensure the safety and security of all participants. Insist on respect for diversity.

These recommendations are designed to position associations to respond to a changing environment. But because associations face different challenges and exist in diverse environments, what works for one association may not work for another, and future trends will impact associations in various ways.

At the same time, association executives can benefit from insights into the patterns of change.

The ASAE Foundation Think Tank

For the past several years, the ASAE Foundation has convened think tanks to explore issues of concern to association executives. Technology, governance, structure, and general future trends have been the subject of previous think tank discussions.

The fourth foundation think tank was September 27-29, 1992, at the Hyatt Regency Orlando, Florida. Sponsored by the Hyatt Hotels Corporation, the 1992 think tank focused on the future of association expositions and exhibits.

Ray Roper, CAE, president and chief executive officer of the Printing Industries of America, Alexandria, Virginia, and Jim Evans, senior vice president of sales for Hyatt Hotels Corporation, Chicago, co-chaired the think tank. Other think tank participants were

* Thomas P. Conley, National Housewares Manufacturers Association, Rosemont, Illinois;

* Regis J. Delmontagne, NPES: The Association for Suppliers of Printing and Publishing Technologies, Reston, Virginia;

* Richard J. Gaven, CAE, National Restaurant Association, Chicago;

* Jon Grove, CAE, ASAE, Washington, D.C.;

* Raymond J. Hall, Electronics Representatives Association, Chicago;

* Penny Kent, Show Management, Inc., Dallas;

* George D. Kirkland, CAE, Los Angeles Convention and Visitors Bureau;

* Allen Konopacki, Incomm International, Inc., Chicago;

* Susan Sarfati, CAE, ASAE, Washington, D.C.

* Gerald R. Starr, Apple Computer, Campbell, California;

* Delmar J. Stauffer, Radiological Society of North America, Oak Brook, Illinois; and

* R. William Taylor, CAE, ASAE, Washington, D.C.

Gary A. LaBranche, CAE, is a vice president and director of association consulting for Lawrence-Leiter and Company and facilitated the 1992 ASAE Foundation Think Tank. He also wrote the 1993 monograph about perspectives on the future of trade shows and exhibits, which will be available from Association Management Press this month. The cost is $12.95 for ASAE members or $17.95 for nonmembers. Call [phone] or fax your order to [phone]. Refer to catalog #216702.