Curious if the economy, ever-rising fuel costs and tough business conditions will impact the upcoming Automotive Aftermarket Industry Week – the combined SEMA and AAPEX shows in Las Vegas?
The answer is ‘Yes.’ Sort of.
While ‘official’ figures are hard to come by, there was plenty of physical evidence that attendance at last year’s AAIW was off. With business down across the board, I heard that many tire dealers and performance shops opted to stay at home. Head counts at a variety of functions were noticeably down, and show floor aisles were a little easier to traverse.
Now, with gas up a buck from November last, inflation gobbling up disposable income at a record pace and small businesses struggling – especially those built on discretionary income – I wouldn’t look for AAIW 2008 to be much better.
It’s too bad, but that is the state of affairs.
What about the exhibitors? On the SEMA side, there are a few obvious names missing from the most recent tire and wheel hall exhibitor list. Transporting a booth, display goods and personnel is not cheap for any size company, and those costs may now far outweigh any benefit realized by getting face time with a handful of customers.
Something else may be afoot, too, an aspect of modern business we may not clearly see.
Affinia Group – the former Dana Automotive Aftermarket Group – long had huge displays at the AAPEX Show. Huge. Now it’s cutting back. Substantially.
President and CEO Terry McCormack made the call, not entirely on prevailing economic conditions (though, no doubt, it was a concern) but more because of the changing shape of business today.
“Normally, we probably would not call attention to a tactical change of this nature,” McCormack wrote in an open letter to the industry sent on June 27. “However, we are living in a time of unrelenting change. Socially, politically, economically and business-wise there are paradigm shifts in progress everywhere we look.”
Out of necessity, Affinia’s business has become far more global in nature, putting a strain on already tight budgets. So McCormack is opting to spread the wealth: Affinia will have “a significant presence” at AAPEX in odd years, and at the biennial Automechanika Frankfort in even years, when it will downsize its AAPEX space.
On the face of it, one could conclude it is all about dollars. McCormack sees something more than that afoot.
Where globalization once moved at a snail’s pace, it exploded at the turn of the new century, “radically changing worldwide patterns of consumer behavior, perceived value and demand for commodities,” he says.
“The most striking examples of this new global economic reality are the extraordinary increases in energy costs that are significantly affecting driving habits. We believe this is a paradigm shift. There is no going back.”
As a result, Affinia – and the entire aftermarket – needs to “question and rethink virtually everything we do,” and drive decisions based on two key questions:
1. Does this represent real value for our channel partners and customers?
2. Is that value commensurate with the resources it consumes?
McCormack says that when it came to the shows, the answer to the first question was yes. The second, though, got a resounding no. “We can create more value by applying the required resources in other areas of our business.”
The bottom line for companies (and attendees) is this: How much do we stand to gain or lose based on our trade show presence? Can we create more value by applying those resources elsewhere?
When budgets get pinched, exhibitors and attendees alike want to know what the real ROI is on their investment. If they don’t see it – or sense it – they won’t come.
Here’s another question: What happens when the economy bounces back, consumers adjust and sales rebound? Will exhibitors and dealers see a need to come back? Hmmmm.
Once upon a time, entire years were made or broken based on the show floor. Trade shows were vital marketplaces, and you HAD to be there. Not today. Buyers and suppliers can be searched, researched and reached 24/7/365 with the click of a mouse. Have trade shows kept pace with the reality of globalization and instant communication?
The challenge for show organizers, I think, is to address these issues. Trade shows serve a purpose, but can they become more than something exhibitors feel obliged to support and shop owners feel obligated to attend?
Because if they aren’t, the value will not be commensurate with the resources they consume. For anyone.