Old Idea, New Formats : Despite the Risks, Consumer Shows Can Be Profitable
A year ago, a California Angels home run--by sending the team into post-season play--could have cost Dan Greene a half-million dollars. And a hailstorm would have put him deeply in debt.
But the Angels lost and it only drizzled, so Greene’s Home Restoration and Remodeling Show was able to go on as planned at Anaheim Stadium. The crowds arrived, and Greene’s investment paid off.
Unpredictable athletic events and bad weather are worth the gamble for Greene, president of Southern Pacific Exhibition Group Inc., one of the largest producers of consumer shows on the West Coast. If enough potential buyers attend, Los Angeles-based Spex, as it is known, can reap $250,000 in gate fees from a single event. Most of the average $500,000 invested in advertising and rent to put on the shows is paid back through booth rentals.
Once organized by families or hobbyists, consumer shows are now run by specialized companies that are capitalizing on the potential profits despite the high risks.
Skeptical consumers view the shows as merely portable shopping malls, and exhibitors often lose money by participating in a poorly managed event. But updated show formats are contradicting the negative image, and a growing number of businesses say that the events are a cheap, effective form of advertising.
Be it a baby fair or boat show, “a display is worth a thousand ads,” said Don Kane, president of Dial One property improvement services, a frequent show exhibitor with regional offices in Orange. “The shows get you closer to the street. You can find out the market’s desires and position yourself to satisfy those needs. We make hundreds of sales.”
Mass gatherings of businesses intent on selling everything from Bibles to yachts, consumer shows resemble trade shows, their professional counterparts. But while trade shows restrict attendance to the industry only, consumer shows invite the general public to browse for admission fees of $4 to $6.
Revenue is generated from a combination of gate sales and booth rentals, which run about $600 for 100 square feet. Exhibition halls charge rents of 10% to 20% of the gate total, and then there are setup costs. But the most taxing part of the process, according to show producers, is finding a show format that sells.
Car or home and garden shows are not enough to bring the public out in droves anymore, according to Barry Greenberg, a consumer show publicist for the past 25 years. “They need new concepts and innovative ideas, shows that can be franchised to other cities and work in any community.”
Spex hit it big at the Los Angeles Convention Center last year with Luxury Lifestyles, a consumer show version of TV’s “Lifestyles of the Rich and Famous,” where 35,000 people turned out to see mink bedspreads and diamond-chip billiard tables. The annual show is now also held in Orange County and San Francisco, and plans are under way to take it nationwide. The company is hoping for the same commercial success with the December debut of New Resolutions, a show focusing on consumer’s plans for the new year.
With a list of potential exhibitors and a consumer appeal that spans all age groups and incomes, New Resolutions is the type of format that show producers strive for, according to Greenberg. “Exhibitors can be anyone offering a service in the health, wealth or happiness categories,” he said. “The consumers can be anyone who wants a change in their life.”
Boosts Floor Sales
The right format also helps the exhibitor’s floor sales by attracting consumers looking for something unique, said John Dimora, vice president of sales and marketing for Clenet Coachworks, maker of limited edition, “neoclassic” automobiles. Clenet sold three cars, priced at $103,000 each, off the show floor at Luxury Lifestyles last summer.
“Shows are our bread and butter. It’s how we get our exposure,” said Dimora, who sends Clenets to 25 consumer shows a year. At a cost of about $6,000 per event, the shows are the Carpinteria-based firm’s only form of advertising. “We are a small company. Television or newspaper advertising is a great deal of expense,” Dimora said.
Dial One’s Kane uses print ads and billboards as well, but is now putting his advertising emphasis into consumer shows. Three years ago, Kane rented 10 booths in the Spex Home Restoration show. Next year, he will occupy 42 spaces.
Echoing other exhibitors, Kane admits that not all shows or formats generate profitable traffic and that renting a booth can be a risk if the show is not properly advertised. Consumer shows can also be a problem for small businesses that cannot afford the manpower required to staff a booth for five or 10 days--the duration of most shows.
“We did one and we’ll never do another,” said Nick Walters of Anaheim Lock & Key, an exhibitor in a recent home improvement show. “They charge us an exorbitant amount to be there. Then they charge people too much to get in, and no one comes to buy.”
Athletic events and the weather are also major influences on show attendance because most consumer shows are held during the winter months, roughly from December through May. In late spring, conventions begin and facilities are not available for the shows.
“I can set a date a year in advance, but I don’t know who will be in the Super Bowl. Or maybe it’s beach weather in January, and no one wants to go inside the convention center,” said Sharon Buck, producer of an annual Sports, Vacation and RV Show at the Anaheim Convention Center.
Said Greene of Spex: “I throw the dice at a half-million dollars every show. You never know what will do you in. Baseball. Rain. One year it was a hurricane in Anaheim.”
Despite the risks, more organizers are clamoring to host shows each year, and convention centers and exhibition halls are reporting that they cannot accommodate all of them. “I get several hundred proposals each year from groups that want to put on a consumer-oriented show,” said Chuck Wolf, national field manager for the Los Angeles Convention Center, which could host only 42 consumer shows last year amid a heavy convention schedule.
Because they rely on local attendance, consumer shows are the lowest priority for exhibition halls. “The consumer show is profitable only from the operator standpoint,” said Janet Donovan, marketing manager for the Anaheim Convention Center. “Local shows don’t bring in the dollar or fill hotel rooms and restaurants. We book trade conventions first.”
In the off-season, consumer show exhibitors travel to county fairs and the show producers have some time to dream up new formats. Some of the dozens of new show concepts introduced to the Southland by companies new to the consumer show scene include the Orange County Christian Business Show, which encompasses everything from chiropractors to Bible salesmen. A Women’s Expo featured businesses peddling vitamins, cosmetics and cars. A show called The Time of Your Life caters to senior citizens.
Peter Castas, the executive vice president of Spex responsible for designing new show formats, envisions the consumers lining up to buy health club memberships, cosmetics and new cars at New Resolutions.
Talks Under Way
He is negotiating with makers of camera equipment for Photorama, a new film and photography show slated for May. And he is researching the market for a show geared to young, professional singles.
Spex began as an exclusive producer of consumer shows about four years ago, when Castas, a consumer show veteran who founded the Home Restoration show 12 years ago, met up with Greene, who was selling cookware at county fairs. “Peter came up and saw me with my pots and pans, and he said, ‘If you really want to see some heavyweight dollars, do a show.’ Well, here I am,” Greene said, relaxing in his penthouse office on Sunset Boulevard.
Spex has a full-time staff of 30 dedicated to renting booths and promoting the shows. Five Spex formats are in operation, and plans are under way to have 15 in circulation around the country in the next three years. Greene said he hopes to take his company public after the newest formats have been tested on the Los Angeles market.
“People come into this business and think anyone can do a show,” Greene said. “And they can, if they want to feature everything you’d find at the local swap meet. We’re trying to put the pizazz back into this business, but we’ve got some credibility problems to overcome.”