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Brands Investing More in Dealer Events

Published June 15, 2010

BY MARC SANI

LAGUNA HILLS, CA—Lance Camisasca’s decision to launch “Dealer Camp” puts a spotlight on the expanding role of mid-summer dealer events. And it foreshadows, potentially, a significant shift in show dates for Interbike.

Camisasca, Interbike’s show director for 10 years and a consultant for two more, severed his ties late last year with Nielsen Business Media, Interbike’s owner, to launch Dealer Camp, a three-day event in late July. To date it’s attracted more than two-dozen companies representing 29 brands.

Companies without the financial firepower of Trek, Specialized, Giant, Cannondale and others need to meet with dealers earlier or continue to get squeezed on pre-season orders. Dealer

Camp, he said, is one way to level the playing field. But more importantly, suppliers say, these one-off events also offer them a chance to sort through model lines spotting the winners and losers in terms of colors and spec before placing final fourth-quarter orders.

And there’s more at stake than bicycle sales. Trek and Giant, along with others, have ramped up competition on the distribution side of the business, integrating company-branded items with a variety of staples retailers order routinely.

And Specialized, with its extensive line of branded helmets, shoes, saddles, tires, components and accessories, puts pressure on players like Easton-Bell, QBP, WTB, Topeak and others who would like a chance to snag a share of Specialized dealers’ open-to-buy.

“First and foremost the product cycle has changed and people are addressing that change in their own way,” Camisasca said, referring to dealer events.

Andy Tompkins, Interbike’s show director, agrees that there’s been a shift in the buy-sell cycle. “The sales season has moved earlier compared to three years or five years ago,” he said.

Despite the interest in dealer events, Interbike—in the midst of one of the worst economic downtowns in memory—last year posted record attendance.

Still, Tompkins acknowledges that early season events have become a de facto starting point in the trade calendar. “It seems like a wider variety of companies want to get out and sell product in the summer months,” he added.

Interbike Sees Erosion

Early-season dealer events, combined with factors like high show costs, a see-saw economy and the changing buy-sell cycle, have led to a slow and worrisome erosion of brands from Interbike’s key venue, the Sands Convention Center.

Last year, for example, Giant, Cervélo, Felt, Santa Cruz and several others were off the floor. Felt and Santa Cruz return this year, but Kona is gone and Easton-Bell could be a no-show.

Some companies maintain minimal floor presence, like Cannondale and Specialized. Others, like Trek, have said goodbye to the Sands and exhibit only at Outdoor Demo, a two-day desert bash.

The loss of name-brand exhibitors and the growth in dealer-only events has outflanked Interbike’s traditional show dates, the last week of September. That’s left some suppliers questioning the show’s relevance.

As a result, Interbike floated a proposal at the Bicycle Leadership Conference to move its 2011 show into either the first or second week of August—seven or eight weeks earlier and two or three weeks ahead of Eurobike.

Interbike found substantial support for that move among many exhibitors.

Pat Cunnane, president of Advanced Sports, the parent company for Fuji, Breezer, Kestrel, SE and Terry, said most suppliers support Interbike’s potential move, but it’s a decision the company should have made sooner. “They took too long to make this decision—and they still haven’t announced it—and that’s been to their detriment,” he said.

Cunnane and others agree that despite Interbike’s proposed move to August more and more companies want to tailor events earlier in the season. “I think this will continue, especially with Trek and Specialized, and for other companies that have the scale,” he said.

Another factor driving mid-size brands like Fuji to seek smaller venues in July or earlier is the annual sales meeting. Most companies once used Interbike for them. Their sales force would preview new products and review and refine forecasts before placing final orders. Now companies schedule those meetings in late June or July, adding another layer of travel and cost.

Timing and Attendance

Scott Montgomery, Scott USA’s general manager, flatly states that the U.S. trade-show cycle is broken. He cites Eurobike’s as a worthwhile model.

“Eurobike is a homerun for everybody. It’s at a great time (Aug. 31-Sept. 4); it’s a great value—you don’t have to pay some moron $25,000 to move your crates a few feet or $3,000 to hang up a sign, and you have the entire industry supporting it. All your major players are there. It even has 100 percent support from most American companies.”

But moving Interbike to early August won’t change the ongoing fragmentation in the U.S. industry, he said. “As long as the major players downplay Interbike, I don’t see the show gaining more relevance,” Montgomery added.

Montgomery is exhibiting at Dealer Camp and he predicts it will attract retailers from Salt Lake, Phoenix, Southern California and Portland over and beyond the 100 dealers whose expenses are partially subsidized by the organizer.

Last year Montgomery spent about $200,000 exhibiting at Interbike and Scott USA will be in Las Vegas this fall. But finding other, more economical ways to meet with dealers, like Dealer Camp, could lead him to cut his exposure to Interbike. “I can get a statistical sampling of pre-season orders. There’s nice meeting rooms, nice trails, the temperature is pleasant and I can honestly say if Dealer Camp succeeds, I would see a less compelling reason to return to Interbike in 2011,” he said.

Profit Pressure Rises

Wayne D. Gray, vice president of KHS Bicycles, bluntly states that it’s greed—driven by the major companies—which has fragmented the industry and diminished the importance of a single, unifying event like Interbike.

“I support a one-show format, but what’s driving these other events is greed, nothing more, and you can quote me on that,” he said. “I think a trade show should service the needs of retailers and timing of a trade show should be what’s best for them,” he said.

Gray would prefer a winter show and, while others may agree with him in principle, it’s not going to happen. “Trade shows are best when business is slowest. My belief is that winter time is better for the industry,” Gray said.

Park Tool’s Bill Armas remains a strong supporter of Interbike. “We want the guys in the back shop in our booth. Interbike is more than just a chance to sell more equipment. It’s good for people to get together. It’s a relationship business and it’s a chance to listen to your peers,” Armas said.

Armas acknowledges that dealer events are here to stay and, yes, they hurt some accessory brands. “These companies have diversified beyond bikes and are acting as distributors, often pushing their own brand of helmets, pumps, mini-tools and other products,” he said.

Jay Townley, an industry consultant, has followed the ups and downs of the industry since his days as a vice president at Schwinn. “I can go back far enough to say that we’ve done this before. It’s the lack of growth,” he said, referring to hyper-competition for market share that characterizes the industry.

“There is no ideal date. Interbike will struggle for relevancy in a market that’s not growing. The industry’s not throwing off enough revenue. Our net pre-tax numbers have accountants sweating blood at the end of the year,” Townley said. The result has been a scramble to devise face-time with dealers before any single company can lock up all of their open-to-buy.

“There’s been a complete abdication of industry-wide leadership from any single organization in the industry on this issue,” Townley said.

Will They Come?

Some worry Interbike’s move into August could hurt attendance. “No matter when Interbike throws a show dealers will come,” Armas said. And August comes as retail sales pause in late summer before ramping up for the fall back-to-school selling season, he added.

Fred Clements, executive director of the National Bicycle Dealers Association, said he believes retailers will head to Vegas in 2011 if the dates are moved. And the NBDA would support them.

On the other hand, the NBDA has little choice but to support Interbike since, like Bikes Belong, it receives a percentage of revenue from the show and contractually must support it.

Still, Jay Graves, a former NBDA president and board member, said there’s a need for both dealer events and Interbike. “We can’t ignore what else is going on in the industry and so having an industry-wide event is critical,” Graves added.

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