EN guest editor Phil Soar says that the trade show sector is a game of evolution, and those who evolve essentially survive
In response the headline: he wouldn’t, would he, in the immortal words of Miss Rice-Davies.
We all know Darwin’s On the Origin of Species. But it was Herbert Spencer who in 1864 coined the familiar ‘Survival of the Fittest’, which Darwin accepted as an adjunct to his theory, defining it as “better designed for an immediate, local environment”.
‘Survival of the fittest’ does not mean that spending hours on the Peloton will guarantee you immortality – the definition of fittest has altered since 1864. A good example is mammals at the time of the Great Extinction some 65bn years ago. While all the dominant land animals such as dinosaurs disappeared in the sulphurous consequence of an asteroid strike, mammals survived despite being almost irrelevant, small rat like creatures – but well suited (i.e. wellfitted) to that disastrous upheaval. And hence, by pure chance, mammals came to dominate the planet.
And we see Darwinian development everywhere we look. Species become fitter in a constant battle. Lions chase impala in Southern Africa, but they don’t eat all the impala. They catch the slowest ones. So, the quickest impala survive, pass down their genes and gradually the speed of herd increases. The same with the lions: the slowest lions capture fewest impala, so they reproduce less and die earlier. The quality of the lion pack slowly improves. Balance is maintained. I’ll come on to Darwin and Trade Shows later…
Why magazines were designed for Darwin and Spencer
I was a magazine publisher for the first 18 years of my rather sad career. Magazines in the 20th Century were a wonderful example of the survival of the fittest. We could have been created specifically for Darwin and Spencer to study. Every week we went head-tohead with an array of other magazines, and they could all be seen next to each other on the shelves of WH Smiths, or Relay in France, or Kaufhof in Germany or Hudsons in the US or 7-11 in Japan. There was nowhere to hide. The consumer had a choice in a very blunt, transparent contest.
Every week we were up against at least 10 competitors. So, the quality of the cover picture was vital (Lady Diana was always a winner), the straplines about articles inside were vital (’10 vital giveaways of whether he/she really likes you’, ‘How to ask for a raise’, ‘Can Spurs ever win anything?’). Paper quality was vital. Pricing rarely mattered too much; if the price for your segment of the market was £1.95, that’s what you priced at. It was a constant battle, red and raw in tooth and claw. The survival effect is clear. You had to keep improving, innovating to at least stay level with the competition. Next week’s cover had to be a stunner. You couldn’t miss a beat, or the lion would get you. When someone introduced a clever innovation, you copied it straightaway. And every week you saw the real, damning: you got the circulation numbers for all the magazines. You could see what worked and what didn’t (Lady Diana, again). You had to improve – to become ‘fitter’ – or you got fired and someone else tried.
Innovation in action: The BMW740i vs the Trabant
The same is true of almost all media forms – newspapers, television, websites (what happened to AOL and Netscape?), radio. And it is also true of most consumer brands – notably in the car industry. Major car manufacturers are constantly improving their products, copying everyone else’s innovations (note how every brand has the same basic design features at any time). And this can best be seen where it is occasionally possible to compare an open, Darwinian culture with a closed culture which does not allow or reward innovation.
So, a cameo: West Germany and East Germany started in very much the same place after 1945. But what did the next 40 years bring them? In the West the BMW 740i; in the East the Trabant. East Germany had a completely controlled economy. Factories built what they were told to build. The defining fault of centralised planning is that it does not allow for constant innovation. Another example – even as late as 1984 you had to wait three months to get a telephone installed in London.
When Russian leaders Khrushchev and Bulganin visited the UK in 1956, they were taken to a London High Street. Bulganin was apparently stunned by the amount and types of bread available. “Who is in charge of bread distribution?” he asked. And he was told: “Nobody.” Which he refused to accept. He had become so inured in the “everything is centrally planned” philosophy of the USSR, that he was unable to comprehend the benefits of hundreds of different people making incremental, independent decisions to improve how society is fed.
But trade shows seem to be an oddity Trade shows are an oddity, consumer shows less so. And this largely comes down to the slot system, the grandfather rights. I will pick giftware solely because it is the largest of all the trade show sectors. You could have an original plan for the most innovative gift show ever – it could be brilliant, certain to attract far more visitors and exhibitors, it could transform the whole business. But you will struggle to get the NEC or Olympia to run with it – because they already have their giftware slots.
Does our industry really encourage innovation?
And, in many ways worse, you could come up with a better Book Fair than the massive Frankfurt Book Fair. No point talking to Frankfurt about it, so talk to the other major Messen in Germany (Munchen, Dusseldorf, Hamburg) – surely it would be great for them to grab such a massive product (historically the second largest show in the world by turnover).
No such luck. Unless it is a clear divergence (maybe, say, solely for audiobooks) the Messen won’t play. Each big venue has its major events, and they quietly avoid competing. No one wants to rock the apple cart. None of them are willing to risk changing a structure which suits them all (the Messen are owned by the cities and the local authorities – the staff are essentially civil servants). The German system is embedded in the political and social structure. Unlike their very successful car manufacturers, trade shows in Germany are essentially an anti-Darwinian system.
In a nutshell, the nature of our trade show system tends to work against innovation. Our major shows do not have the Darwinian imperative to constantly improve. Don’t misunderstand this argument. I am not saying that our shows are ‘bad’ (well, occasionally, yes) or are poorly run, or do not involve an enormous amount of effort. If we felt we could dramatically improve our shows, we would do so.
This is why Darwinian innovation works – no one inside a bubble necessarily knows what unlikely ideas might pop up given the chance. China did not realise how far it was falling behind between 1500 and 1800. We have little means of knowing what we have no means of knowing.
The things we don’t know we have no means of knowing There are consequences to all this. Personal opinion is not part of this argument, but I do think there are trade shows in the UK and elsewhere in Europe which could be improved. You can all name some of them; shows which have shown little innovation in several years, but most of the time we don’t seek to notice it.
Here we must be blunt. Some of our larger companies rather work off the bottom right-hand corner of the spreadsheet. What matters is this year’s profit and whether it meets the budget. And there lies everyone’s bonus. And if a company works on several pyramid layers, each layer is responsible to the one above for making its budget. At the very top, the creative potential of one existing event of many rarely takes up much Boardroom time.
So, if an event is not hitting its sales targets – maybe for very good reasons and not to do with the essential integrity of that trade show – then the inevitable response is to look at the bottom right-hand corner and to try to cut costs so that the budget is achieved. That rarely improves the product. Rare is it that there is a detailed interrogation of whether the best route is to accept a lower profit this year and re-invest for the future. In the magazine world this would not be the case. The only way to combat declining sales and the predations of competitors is to invest more – to change people, to change writers, to change editors – to improve the magazine to compete.
“This is why Darwinian innovation works – no one inside a bubble necessarily knows what unlikely ideas might pop up given the chance”
Who really owns our leading trade shows?
That is not a rhetorical question. It is a problem which venues often face. They can encourage innovation and change, but they cannot enforce it. By and large they cannot instruct organisers to improve what they do. There have been times when venues have become irritated by this – certainly in the 1990s ECO told one or two organisers to improve or risk losing their slots. And it also brings into question the interesting philosophical debate about where the ownership of an event really lies.
In general, organisers assume they own the Intellectual Property – but that does not extend much beyond several words, which can be easily superseded by small changes in nomenclature. This issue has rarely been tested but the best recent example was in 2015 when UBM tried to move ‘Interiors’ from the NEC to ExCeL. (Interiors had originally been called The Furniture Show). A combination of NEC management and the Manchester Furniture Show team simply moved into the Interiors slot and renamed the event ‘The NEC Furniture Show’.
The exhibitor base voted with their feet and stayed in the NEC – clearly showing that the venue had some credible claim on that particular trade show. There are many other examples: it is hard to see Spring Fair not running in the NEC, nor the Harrogate Gift/Craft Fairs moving elsewhere.
But trade shows, by and large, do not have to constantly improve to hold their positions in the way that magazines, or cars or breakfast cereals or toothpaste do. This is a relatively rare thing. Examples of Darwinian pressure are everywhere – we have mentioned East Germany’s Trabants, but think China. In 1500 China was the most advanced country in the world. But its borders were deliberately closed and when China had to confront the West 300 years later it was powerless. It had cut itself off from innovation and competition. The collapse of the USSR in 1989 was not because the Wall fell, but because the closed economy of Russia had nowhere left to go.
Are trade shows all they might be; how might we know?
You might argue that trade shows are as good as they can possibly be. I am obviously not suggesting that there are no new ideas, for instance in segments which did not exist 10 years ago, nor occasionally launching cleverly into a smaller venue and growing there. Nor that new companies cannot grow on the back of new launch events and disruptive approaches (this is not an advertisement, but CloserStill did exactly that). But don’t ignore the facts. In the UK, the 50 largest exhibitions represent some 75% of the whole turnover of our industry (surprising perhaps but true) and most are relatively well embedded.
We have tended to define success as doing roughly the same thing each year and growing the profits by perhaps 3%. So many of our shows have been about raising prices a bit, simple order taking, keeping cost rises down, watching the cell in the bottom right-hand corner of the spreadsheet, and getting the 25% bonus for meeting budget. I am not against this – and there are very good reasons why our industry operates as it does – but this is not going to win anyone a Business Award for growth and excellence. In our large groups, it is the people who go out and launch a new event, however small, who should get the big bucks – not the managers running a stable, non-competitive event each year.
I am perhaps exaggerating a little to support my argument, but our system can, in its very nature, be accused of tending to inhibit growth and quality. Arguably, we unconsciously restrict innovation and change. This is not because we are bad or unaware people – any more than the Chinese were in 1500. It just happens to be the environment (and the very successful one) in which we work. Hence, we are rather different from most businesses. Charles Darwin, had he ever heard about trade shows, is unlikely to have included us with the finches in On the Origin of Species.