RETAIL OBSERVER / CES RESPOND: CES Joins With Retail Observer to Overthrow KBIS: UPDATED EXCLUSIVE
Submitted by advisor on Thu, 04/22/2010 - 8:54am.
UPDATE April 26 below.
Several manufacturers report that representatives of the Consumer Electronics Show and the Retail Observer were trawling booth to booth at the 2010 Chicago KBIS attempting to persuade manufacturers to jump to the CES show in January in Las Vegas.
We believe that the earlier report from Dealerscope was correct, and our correction of this report was false, mis-directed by a well positioned source. We apologize for what we believe to be an error in our reporting. Our earlier reporting.
What could possibly be the upside for any manufacturer going to CES?
What part does Retail Observer play in this "play"?
How does Nielsen or the NKBA plan on reacting to this threat?
Who is, and who is not onboard for the change?
What does ApplianceAdvisor.com think about the change?
It's all coming up.
UPDATE APRIL 26
RETAIL OBSERVER RESPONDS
The Retail Observer responded to our report. They made the following points:
- CES approached the Retail Observer to make introductions to appliance manufacturers for the creation of Pavilion at the CES called: "Connected Home Appliances Tech Zone".
- The Oberver indicated that this is NOT an appliance show. It is a Smart Grid, Tech Connected Home area, which of course includes some appliances.
- The appliance section will only be 10,000 ft2
- That Retail Observer contacted the NKBA as soon as the Observer was contacted by CES. Therefore NKBA was informed of the plan.
- That the Oberver and CES are not interested in overthrowing KBIS
- Retail Observer only made introductions. No cards or marketing materials were handed out, which would have been contrary to KBIS etiquette.
CES RESPONDS
Well not exactly respond, but they did send emails to KBIS exhibitors after the show. Exerpts of that email follow:
- "I am writing to follow up on our conversations regarding the Connected Home Appliances TechZone at the 2011 International CES."
- "We feel that Appliances truly have a home at the International CES, given that our attendees have long been requesting their representation on the show floor, and the robust media coverage that the show already garners in the appliances space. We intend to dedicate our resources to making this category successful at the show, and hope to be able to showcase a wide variety of manufacturers in this new arena."
- "CES is specifically looking to showcase products with the following features in the Connected Home Appliances TechZone:o Unique and innovative design and appearanceo Interoperability with other devices/systems in the homeo Energy Efficient products or SmartGrid compatibilityo Demonstrate the latest innovation and advanced functionality in the industry"
The CES communication included several surprises which convince us that the Retail Observer is not fully informed of the plans that CES has for major appliances. For example:
- CES did have "conversations" about the new TechZone with KBIS exhibitors, which as explained by the Observer ain't cool. Exhibitors have confirmed that CES did leave business cards, and did discuss the TechZone.
- Appliances are an important segment of CES's future. Is 10,000 ft2 just the beginning, or just a fraction of the beginning.
- Reading and Re-reading the last point, Smart Grid, or Connectivity are evidently only one part of the many kinds of appliances of interest to the CES.
So, go figure. We did.
Key Words: Retail Observer, Kitchen and Bath Show, KBIS, CES, Consumer Electronics Show, NKBA, LG, Samsung, Sharp, GE, Whirlpool
What Would You Do ?
My Position on K-Biz is ...
... that it's high time for new ideas, a new way of looking at the Appliance Industry as it relates to kitchens, and not necessarily bathrooms, a time to make K-Biz relevant, and a show everyone looks forward to !!! I think it takes the input of people who know the Appliance Industry without the encumbrance of the same-old-people who don't realize that their model is broken !!! New ideas for a time many have never had to deal with before ... in a way, the challenges of challenges ...
K-Biz needs to be fixed, and not just with a band-aid of saying that the show is substituting architects and designers for the major players in the Appliance Industry !!!
If K-Biz does not make positive, inclusive moves to attract the Appliance Industry and attendees outside of those working the booths when they go to Vegas next year, they will be driving the last nails in their own coffin !!!
BTW: Welcome back Stallion !!!
Stallion's Derby Week Appearance
It may have been a while, but Stallion remains wise. What has happened with KBIS, in terms of the appliance industry participation, mirrors what has happened to the industry and the economy as a whole. It had nothing to do with decisions made or not made by show organizers (sorry fingerpointers). If the most severe recession since the Great Depression (not to mention the near collapse of the entire financial system) hadn't happened, KBIS 2009 and 2010 would have looked a lot like KBIS 2006 or 2007. For the past several years, the appliance companies that traditionally occupied huge footprints and spent big money on KBIS have had to focus on doing what is necessary to survive. KBIS could have probably offerred some of these guys free space this year, and they still wouldn't have had the necesssary coin to do the show. As long as business remains challenging, these companies will have neither the inclination, nor the budgets to go back to exhibiting in the same grand manner they did five years ago. Will Appliance Industry participation in KBIS "rise from the ashes"? I believe it will. Will it come back to the heady levels (2005 and 2006) that so many seem to have nostalgic feelings for? I don't think that's likely - at least not in the foreseeable future. The return will require both KBIS and the industry to figure out how to partner and adapt the enterprise in new ways to make the return on investment equation work for both sides. To CES, the Appliance Industry must look like an interesting "shiny new toy" that might merit being added to their collection, if it happens to fall their way. It should be no surprise to anyone that they are poking around chatting people up. That's hardly a reason to jump to the conclusion that the KBIS/Appliance industry relationship built up over many years is dead and buried. I suspect not too many manufacturers would be in a rush to spend a lot of money just to be a sideshow at CES, if KBIS manages in the future to offer a reasonable value for them to stay home.
Thanks Kona
Good to be back. As Bermuda Bob says more has to be done by KBIS ? Ok what would you do if you were responsible for KBIS attendance ? As I stated yesterday the current business climate is about sustainability. An expenditure of $400,000 to $500,000 at this time will not bring more sales.If you cannot afford a car because of your job situation ,Jack Welch could not convince you to buy a car nor possibly would a bank fund you. Therein lies the rub. The great organization I worked so many years for and others are down sizing not because they are cheap or they have done something wrong...it is the economy. Marketing and shows are not spurring consumers to purchase at this point and since marketing money is bottom line savings people are being cautious. If an organization is breaking even or losing a bit the banks who are all over everyone may look hard at credit lines and the spending may be close to breaking banking covenants. We don't know for sure. The organization I am responsble for has a great debt to equity ratio and the banks still pound on profitability vs expanding credit lines. That today is the way of the world. So while breaking for CES looks good , it may be like changing wives or husbands. Be careful what you wish for. By the way . I am running in the derby. To all I hope you are doing well.Much to talk about.
There are Many Reasons ...
... why companies are going out of business these days ... most are due to over-leveraging and that's just poor management, but many of the others are due to an inability or unwillingness to (as the Marines say) " ... improvise, adapt, and overcome ..."
The challenge is for K-Biz to make themselves relevant again, and that means that they need a new way of thinking ... a new approach to a trade show in difficult times ... and ... a realization that they cannot substitute designers, architects, and decorators for major manufacturers who provide the anchor for every kitchen renovation !!! If K-Biz does not change their mindset, or bring people in who can think outside of this recession laden box, then they will be doomed to fail in Vegas next year !!!
Vegas has everything any show could ever want to attract attendees, so it's up to K-Biz to make this venue their turn around show ... and it has to start by wooing the major manufacturers of the Appliance Industry and making it attractive to everyone who has, or has had to, stayed away !!!
Bermuda Bob Please Respond
Could you please give me some specifics on who is over leveraging as you say ? Can you give specific , insightful examples of poor management ?The Marine Corps philosophy does not apply to a situation where there is a near depression in sales of consumer goods and no credit.The funny thing about your comment on KBIS is the specifiers , designers and architects are one of the main reasons high end companies go to KBIS.That in itself was one of the key reasons of the success we experienced with our fine organization in the 90's and beyond. The fact remains that you can crticize all you want , the economy and the fundamental credit and housing market has been the main cause of these problems. Some have suffered more than others .I will not crticize the highest levels of management because being there and involved in decisions it is very difficult for you to pinpoint many examples that good sales levels would not fix. Good solid business decisions today , some of which you may not like will strengthen business for the future. Watch attendance pick up as the economy grows. The passionate and successful leaders will understand that.I am not criticizing you as much as I am disagreeing with you.
Surely, Stallion !!!
1. Over-Leveraged and Over Extended would be exemplified by some of the Big Box stores who are now no longer with us !!! PC Richards comes to mind ... the are others all over the country ...
2. " ... Improvise, Adapt, & Overcome ..." certainly does apply to K-Biz because they have failed for a 2nd year to be viewed as relevant enough to attract the major manufacturers who ran away again this year like water repels oil !!! Until K-Biz learns how to return themselves to relevance, or bring in people who know how to, they will remain a bastion for the products no one really cares about !!!
3. Designers, Architects, & Decorators are most certainly vital aspects in the overall picture, but it is still undeniably true that APPLIANCES are the cornerstone on which the kitchen is built !!! I've worked with them all during my years and they are all quick to acknowledge that APPLIANCES are the anchor which the client needs to select BEFORE anything else is selected !!!
4. Substitutional Confabulations on the part of K-Biz is a ridiculous notion which they tried to sell as making up for the loss of major manufacturers ... and was also articulated in Advisor's interview with NKBA ... It almost sounds to me like they actually are beginning to believe their own press releases !!!
5. Cognitive Dissonance is what everyone from major manufacturers to independent dealers have suffered from since September, 2007 ... It is an uncomfortable feeling when contradictory thoughts collide ... like budgetary concerns versus increasing an advertising budget so your message is front-and-center to/for your target customers !!! Yes, the major manufacturers have made a mistake in not appearing @ K-Biz, but K-Biz is equally mistaken by not making the show more germane in today's marketplace !!! K-Biz cannot "sell" a show to major manufacturers that no one will attend and thusly both suffer from cognitive dissonance ...
6. What the Answer ??? The ANSWER is one which needs to be identified and addressed and it had better be done in short order before K-Biz returns to the best location for a trade-show of all - LasVegas !!! If K-Biz does not hit a "home-run" there, they will be reduced to a memory of days gone by, like an old movie star who no one remembers why he/she was once loved !!!
I hope that addresses your concerns, Stallion ... if not, I'm happy to continue sharing my thoughts !!!
Mainly Speaking of the Manufacturers
BB. My conversations are applying mainly to the manufacturers who design and distribute the products. That basically sets the tone I am speaking of. My expertise with the retail big box guys is not as good as yours. The manufacturers need to sustain their business so the stores have something good to sell. Your # 2. The manufacturers made a business decision to save $500,000 this year .Purely an economic decision. Perhaps a show every two years would be more appropriate in today's world. My guess would be that the decision makers are happy with KBIS. Your # 4. Would you be happy if the KBIS folks told you they are lousy and would you Bob lead us out of the dungeon of distress ? Your # 6. KBIS show will be fine if the economy picks up. Don't blow up an industry and show that has been so good to each other for many years.
Manufacturers & K-Biz ...
OK, Stallion, here goes:
1. Sustain Business - There are many ways for manufacturers to expose themselves and their products to the masses ... there's:
A. TV Placement of their appliances on cooking shows, which is quite appealing to the cult following of people who identify themselves as "foodies" and can tell you on which manufacturer each and every TV Chef uses ...
B. TV Advertising which is either product driven such as Electrolux and Kelly Ripa or the Big Box stores featuring a certain product ... what sales rep has not had a customer ask for a product like they have seen on TV ...
C. Sunday Circulars which to most are annoying, but to someone needing an appliance or electronic toy, they are heaven sent ... for the Big Box stores that is ...
D. Trade Shows which are either open to the public or not, but more and more there are local specialty shows in "Exhibition Centres" around the country as these building would rather have anyone showing anything than to see their floors empty ...
E. Trade Shows to the specific industry members and essentially closed to the public. These are especially valuable because they allow independent dealers to attend, and if they are smart, they will send their sales staffs as well ...
2. Droughts give you the time to strengthen your "boat" and that means continuing to make investments in getting your message out ... A drought is not the time for introverted thinking, it's a time to double your efforts to get your message out !!!
3. Every Other Year Shows are a specific mistake if a manufacturer likes to introduce new products, technology, or upgrades at Trade Shows ... in today's ever more rapidly changing world where models change faster that the literature gets to you, the opportunity to show off one's wares is absolutely necessary each and every year !!!
4. The Changing Demographic today makes it essential that every Sale Rep be kept up-to-date on everything the marketplace offers in order to properly address the needs of any customer who walk thru the door ... that's done by getting them to a place where they can be "oriented" on everything in a concentrated period of time ... that's called a Trade Show !!!
Unfortunately, if that Trade Show is broken and unwilling/unable to adapt to not only the changing demographic, but the new challenges of doing business in the present atmosphere, then those running the show need to be replaced by people who can !!! In my estimation, K-Biz is broken and in risk of becoming irrelevant ... their next show in Vegas next year - a town where no one should ever have a "bad" show - must be a huge success or they will be useful to no one ... even maybe the Asians !!!
5. The Changing Economy of today will not bring back the years we lost on September 15th, 2007 primarily because the leveraging of yesterday will not be allowed tomorrow ... people will never make those mistakes again ... too much was lost and will never be made that way again !!!
Now, if that assurance is not enough for you, let me offer this ... The Government wants to regulate Wall Street ... and that ought to give you nightmares ... the same nightmares you ought to already be having over the Government taking over Health Care Insurance !!!
Each and every day in the nightly news there are politicians telling us that things are getting better every day ... Well, I don't know about you, but not one single independent retail dealer of any commodity in our area has reinstated the austerity measures they have been forced to take since 2007 !!! The economy is not coming back in leaps and bounds, so the smart retailer needs to double their efforts to reach a new type of clientele' ... and ... they need to be backed by manufacturers ... and the most efficient way of doing that is in at a Trade Show ... but not just a Trade Show like one of yesterday, one which is tailored for today !!!
6. Trade Shows need to be affordable not only to the Exhibitor but for the Attendee ... In order for an Exhibitor to make an investment of the type of $$$ required to properly show off their products, it is worthless unless each independent dealer, co-op group executive, and every available Sales Rep attends the show !!!
So, there's the rub ... what good is a Trade Show if the Exhibitors do not think the organizer can attract Attendees ??? None ... and so you have the conundrum K-Biz has staring them straight in the face ... and they seem helpless to change it !!!
Making broad based statements that they had more and more Designers, Architects, & Decorators in attendance means little when Appliances are the core of any kitchen ... and laundry goes along with kitchens !!! Saying attendance is up and not delineating between Attendees and those working the show is a sham ... The business model is broken ... terribly broken, and the modeler is seeming clueless as to how to fix it ... because maybe, just maybe, it needs to be broken down and re-built !!!
Just because something was useful once does not mean it will remain useful unless it changes with the times ... if that were true, we'd still be cooking over fire and living in caves !!!
... and yes, Sir, I'm available !!!
I have long said that ...
... K-Biz needs to be attractive to prospective attendees, and if the manufacturers see that there will be attendees to show off their wares to, they will come ... That's real, live attendees and not employees from other booths !!!
K-Biz needs to realize that without the presence of ALL the major Appliance Industry support, many people will not make the effort to attend, which will reduce the show to being a grand gathering of products for the kitchen without the main products which are the center of the kitchen - Appliances !!!
KONA rightfully focuses on the $$$ people have to spend to attend, show, or send their people to K-Biz ...
Yes, the economy is not kind to spending $$$, but now is the time when $$$ needs to be spent on exposure ... Exposure by the manufacturers to not just the owners of independent dealerships, but to each and every sales representative @ those dealerships ... and that means K-Biz needs to turn their attention to affordability in order to make attendance @ the show desirous and justifiable in the minds of owners !!!
Every trade show in 2009 took "hits" to what was roundly accepted as the norm, because many show organizers had gotten "comfy" ... and then the bottom did not drop out, it was knocked out !!! Those shows which did not adapt in 2010 because they either did not wish to, or didn't know how to, are destined to lose their relevance and thereby affect entire communities they are supposedly to be serving !!!
What are the real disconnects?
This has become a jolly good debate BB & Stallion! Thanks. Can't disagree with BB that manufacturers must spend $$$ to keep their brand and sales momentum going. However, that doesn't mean that manufacturers aren't spending $$$, nor does it mean that they necessarily should be spending it on KBIS (or on supporting NKBA for that matter). There's been an NKBA/KBIS mindset in existence for well over a decade, which has implied (sometimes rather arrogantly) that the high-end appliance manufacturers need NKBA & KBIS as the primary "conduit" to the high end consumer, through the "designer/specifier/kitchen dealer channel". They portrayed themselves as the gatekeeper to growth. Manufacturers felt compelled to spend big on KBIS, and, along with Distributors and even the big appliance dealers, financially support local and national NKBA Chapters, and funded local shows and events.
The whole playing field has changed. Internet savvy consumers aren't as reliant on designers/specifiers/kitchen dealers or appliance dealers to tell them what appliances they should use. They are doing their own research. Sophisticated web site and social media marketing makes it possible for manufacturers, distributors and dealers to reach more purchasing contacts with their message more cheaply and more efficiently than ever before. That should be a wake-up call to NKBA itself, as they bear some real responsiblity here.
What really new support initiatives has (NKBA) introduced lately for their appliance industry partners, except to cash their sponsorship checks and have them anchor their annual trade association party? What new partnering efforts, which would really benefit the appliance manufacturers, has NKBA come up with lately? I've heard one very respected NKBA "voice" on a couple of occasions admonish members to become more involved with and attentive to their appliance industry partners. The primary pitch reasons given were to add value to the overall client services that they get paid for, or at the very least, not to appear less informed (or totally uninformed) on appliances than their internet savvy client who is supposedly paying the designer for having great expertise in these areas. Maybe subsconciously it was also to say "these guys support our trade association with a hell of lot of money, we ought to at least feign interest in them and what they do".
Near as I can tell, this wake-up call has fallen mostly on deaf ears. Until that attitude changes, and NKBA at all levels starts asking their appliance industry partners what they (NKBA) can do to help them (the appliance industry) - and starts doing something proactive- there will continue to be a growing disconnect. The old "one-way street attitude" ain't going to cut it anymore. KBIS has suffered from this disconnect and will continue to feel the brunt of it, but NKBA will start feeling it hit home sooner or later too. It would seem to me that if NKBA doesn't really care about having the appliance guys in their show, and doesn't want to work to build value in their association for the appliance guys to come back, then there's not much the show organizers can do. The manufacturers have sent the strong signal that, at least in the short term, they don't think they need KBIS. A reviving economy alone is not going to change that mindset. Some serious NKBA leadership in this area just might.
Marketing Funds
No one will disagree that funds need to be spent to draw interest. However when the general state of the economy is down so will spending across the board. Marketing funds come directly from the bottom line. A good decision when no one is buying and the walls are collapsing around us.The people that own the high end businesses I suspect are well aware of what they need to do and their efforts will make them stronger as time goes on. I also think that there is more interaction with the NKBA and business at the highest levels than you may be aware of. The biggest public disagreements would pertain to booth locations. I do not think this is a deaf ears issue. However our society wants to blame someone or something. Blame the economy for most of this. No one has gotten stupid overnight. The problem is that a lot of people have not suffered through tough times and look to displace blame. I think in general the real good distributors suffer from the third world distributors who are short sighted , go to China to, buy product using funds they should have paid their suppliers with and totally upset a good market all for the sake of making a shortsighted , short term profit.Let's hope that these are the people who get religion or go broke.
Vision is Priceless !!!
Stallion, you have touched on a few interesting aspects prevalent today which need to be addressed ...
1. Blame Someone or Something ... is a common desire when people lose investments, homes, jobs, etc. etc. etc. ... Unfortunately everyone turned out to be over-leveraged and under-collateralized whether they knew it or not, so there is plenty of blame to go around and so our Government "bailed out" banks but did not force them to begin to make better loans, so what good is all the talk that the economy is coming back ???
2. Manufacturing Elsewhere ... is a an understandable move to save the bottom line because our Government thinks that businesses are a great place to over-tax, which is then built into the price to the consumer !!! Unfortunately our Government is moving closer and closer to being an obvious "Big Brother" by wanting to take over just about everything, but they are missing the most important aspect and that's immigration !!!
If the agricultural industry uses immigrant labour, why can't manufacturing use immigrant labour to return those jobs and put our people back to work ... hiring back our displaced people and adding immigrant labour would certainly affect the bottom line in a positive way !!! We just need to make sure they locate in the "Right to Work" states so Unions would be passe' ...
3. Getting Your Message Out is the most important reasons to not withdraw support of a Trade Show ... and I understand why it has happened, so the mission of K-Biz is double difficult, but not impossible !!! I've outlined my vision before, so I won't bore you with it again, but simply put, K-Biz needs to be relevant again ... If not, they will become a Trade Show replete with every other little gizmo one might want in a kitchen, except the anchor - Appliances !!!
Brother Bob
Disconnects, Indeed !!!
Hi Kona ... you make some very valid points, which I'd like to comment on, so here goes ...
1. "Keeping Up with the Jones" ... Manufacturers thinking they are "compelled" to spend gobs of $$$ is an excellent observation and one which needs to stop ... if Designers, Architects, and Decorators cannot envision a certain appliance in a certain setting they are not worth they weight in salt !!! My god, some of those exhibits could double as overnight quarters for the exhibiting staff !!!
2. High End products are not in the same demand as they were before, primarily because they are seen as not being "austere" enough for this economy ... It is almost as if someone had a party and the invited guests wondered where that huge new range came from, versus the range with all sorts of new technology, which is viewed just like having a "smart-phone" - a necessity !!!
I was interested in Advisor's taping of the GE Monogram booth where Martin Yan was selling and not cooking ... now I'm sure he may have cooked, but anyone who ever saw him @ K-Biz knows the differential I'm talking about !!!
3. Internet Savvy consumers are a real challenge to Sales Reps ... they come to the store armed with all sorts of information the Sales Rep was depended on to provide before ... that makes my point that now, more than ever, a Trade Show in which a Sales Rep can be "oriented" in a concentrated manner, is tantamount to a successful existence !!! A smart dealer will make sure his people are going to a Trade Show so they can compare and contrast in order to handle that Internet Savvy consumer ...
... but what good is a Trade Show if the major manufacturers don't perceive they can reach the people they need to, because the cost of attendance is out of reach of the average Sale Rep or even Dealer ???
If you recall the movie "White Christmas", you'll remember the song "What do you do with a General when he stops being a General ..." well, the major manufacturers are just like the General ... only it's K-Biz who is singing the song ... and interestingly enough, the song has no solution ... funny that !!!
4. Membership has it Privileges and there are many who feel strongly about being a part of some sort of organization from political, to trade, to religious, and to social organizations ... I've never honestly understood all this ... maybe because I'm not very good @ "following" or being stifled by conformity ... I know I'm not a fan of "PC" ...
I say this to help you understand that when I see a showroom openly advertise and overly emphasize that they are a part of one of those organizations, I immediately assume that their prices will be higher than others ... primarily because they pay dues, they pay salaries to attend, and they incur costs which are all built into the product they sell !!!
Someone once was trying to encourage me to formally join a church I had been attending for quite some time ... they were essentially saying "Membership has it Privileges" - to wit I responded, "Yes, the privilege to know who is going to bury me" ... I think you can draw you own conclusions about the point I'm making ...
Rock On, Kona ... you've got your head around this one, Mate !!!
Well, considering ...
... that in 2008 CES boasted 141,150 attendees, then dropped to 113,085 in 2009, and only jumped to a reported 120,000 this year ... it is only natural that someone with good business sense would look to a trade show where the major manufacturers were disenchanted and distancing themselves !!!
While I have always thought that CES has run a top notch show which was as supremely "attendee friendly" as could be ... however, I agree with Advisor that the Appliance Industry would pale by comparison to the newest electronic products which one suddenly "... could not live without ..." !!!
The answer to the incursion by CES, with particular interest into Appliances, is for K-Biz to have representation from the Appliance Industry, not just people who think they know about appliances, how to market them, and how to entice attendees !!!