LAS VEGAS— In the midst of the most turbulent economic times since the Great Depression, and faced with a diminishing exhibit base and attendance, the Kitchen/Bath Industry Show (KBIS) returns here in April with a daunting task. It must find a way to renew interest in a show that has long been seen as the industry centerpiece of design and product innovation, but now needs a reenergized exhibitor and attendee base.
There's no question that the economy has had a profound impact on the kitchen and bath industry in recent years, leading dealers and manufacturers to reexamine everything from staffing, overhead costs and manufacturing processes to marketing, advertising budgets and travel expenses. But how much of what is currently going on with KBIS is tied to factors beyond the economy, specifically to changes within the industry and the way people view trade shows?
2010 National Kitchen & Bath Association (NKBA) president Mark L. Karas, CMKBD, CR of Stoneham, MA-based Adams Kitchens, admits: "The economy has forced everyone in the industry to closely examine the resources that will most effectively help their business. [But] as the premiere opportunity for collaboration among peers [and showcase for] the latest trends and technology, I believe that KBIS remains one of those critical resources."
That said, he adds: "We're constantly looking to increase the value of KBIS."
Whether the NKBA's efforts to increase the show's value will have a significant impact on 2011 attendance figures remains to be seen. However, it's hard to ignore the change in attendance in recent years – a problem that is impacting many industry trade shows, and which has led some to question whether the annual trade show model itself may be outdated (see related story, Page 31).
In 2007, the last time KBIS took place in Las Vegas, official attendance totaled 44,154 kitchen and bath professionals and more than 1,000 exhibitors – considered "a record-breaking number of attendees," according to the Hackettstown-based NKBA, which owns the show.
In 2008, organizers reported "some 40,000 attendees" in Chicago, while the 2009 show in Atlanta attracted only 28,921 attendees and some 540 exhibitors, according to show organizers.
Moving the show back to Chicago in 2010 seemed to help increase attendance; NKBA officials cited a 30% increase in attendance from KBIS 2009 to KBIS 2010, with reported attendance of more than 37,000 and nearly 700 exhibitors. By comparison, there were 457 exhibitors committed to KBIS 2011 as of press time and, 15 weeks prior to the show, registered attendance numbers for 2011 totaled 5,867, compared to 3,228 at the same time in 2010, according to the NKBA.
However, there are currently only two exhibit halls leased by NKBA this year – compared to three used in Las Vegas in 2007 – and many manufacturers who are on board for the 2011 show are decreasing their booth space in response to the economy and other factors.
Additionally, the composition of the show has changed dramatically in the last few years, according to dealers and manufacturers interviewed by KBDN, with a significant drop-off in major cabinet and appliance manufacturers and a growing number of smaller booths from companies based overseas.
When asked about the drop-off in attendance by cabinet and appliance manufacturers and the changing composition of the show in general, Brian Pagel, v.p./kitchen and bath for Nielsen Expositions, the arm of New York, NY-based Nielsen that produces the show, declined comment and deferred his response to Karas – as did NKBA CEO Don Sciolaro. Karas also declined comment, noting: "Policy prevents me from sharing some of the statistical data requested."
Likewise, when asked about the square footage devoted to exhibitors this year as compared to previous years, NKBA declined comment.
As the number of exhibitors has declined and the composition of the show has shifted, opinions are split as to whether KBIS is a "must-see" event anymore.
Lenora Campos, Ph.D., manager/public relations for Morrow, GA-based TOTO USA, believes it is.
"KBIS is our major industry show, and we look at it as an excellent opportunity to strengthen relationships with existing customers, increase brand awareness, launch new products, expose our products to new customers and new markets, generate meaningful press coverage and gain customer insight," she says.
Others, such as former exhibitor Tim Schroeder, president of Duravit in Duluth, GA, believe the show no longer fits his firm's marketing strategy. "We're not convinced that the fair warrants the size of investment required to participate in a way that properly represents our brand," he says.
Susan Cross, brand and communications manager for Masco Cabinetry in Ann Arbor, MI, says her company remains a supporter of both KBIS and the International Builders' Show (IBS) and states: "As a returning exhibitor, both KBIS and IBS provide important opportunities for us to reach our customers. Our experiences have been positive at the shows and we look forward to connecting with current customers and meeting potential customers. In addition, we're committed to showing our support of the industry by supporting major show initiatives and educational events." All Masco Cabinetry brands will be at KBIS, Cross says.
However, Jody Rosenberg, v.p./ sales & marketing for Milwaukee, WI-based Graff, feels the show no longer provides enough return on investment to justify the expense. "I really don't believe it's a must-attend [show] anymore. When you're talking about bang for your buck, with KBIS you get the volume, but it's not necessarily the right people."
Other exhibitors, such as Strafford, TX-based Cosentino North America, are returning, yet in a more streamlined way. Notes Lorenzo Marquez, v.p./marketing for the firm: "We're strategically scheduling staff members to work show hours and days based on traffic flow from previous years."
Designers and dealers are also split on whether the show's costs can be justified in the current economy.
Jennifer Hissa, CKD, design/sales for Cabinetry Designs in San Antonio, TX, says she will not be attending this year. "We decided that we will put more money into advertising and local NKBA chapter events," she says.
On the other hand, Tom Trzcinski, president of Trzcinski Design Group and Kitchen & Bath Concepts in Pittsburgh, PA, believes: "As a business owner, you are foolish for not attending because there is always something new to learn."
Lori Jo Krengel of Kitchens by Krengel in St. Paul, MN, sees value in viewing the latest products. She notes: "In these times, you need to put your best foot forward and it is more about finding that needle in a haystack in terms of product. If that can translate into a discussion with a client, then they know I'm investing in the future and on the cutting edge."
She admits, however, that she can understand the hesitancy on the part of some dealers. "For many dealers or designers, when it's all over, [attending runs] $1,000 and they can't afford it," she says.
Return on Investment
While the economy is probably the greatest deterrent to attending or exhibiting at the show, diminishing return on investment (ROI) has been cited by some as a key concern.
Paul Leuthe, corporate marketing manager for Sub-Zero and Wolf in Madison, WI, explains: "We exhibited at KBIS for over 20 years, but when we looked at ROI, we decided to make some cuts. Choosing between laying off people or exhibiting, our senior management decided to [forego exhibiting at KBIS]." The firm stopped exhibiting at IBS back in 2005 as well, Leuthe adds.
Ann Rottinghaus, marketing communications director for Oak Brook, IL-based Elkay, shares Leuthe's sentiment. "We're not exhibiting this year because we see ROI and cost as two key challenges. KBIS certainly affords us the opportunity for continuing to foster customer relationships, but what we need from all shows – including KBIS – is to see new people. As costs for the show have not really moderated, it causes ROI to come into sharper focus." Schroeder, too, is more closely examining ROI, and says: "We plan to allocate our budget to those marketing opportunities that provide the biggest ROI, along with more flexible and dynamic criteria."
For Maureen McGeehan, retail marketing manager for DuPont Building Innovations in Wilmington, DE, it's less about the numbers than the quality of the leads. She states: "We've seen the show getting smaller, however, over the past few years we've seen higher quality leads."
Of course, for many, it comes down to simple economics. And Rosenberg says the costs for exhibitors are simply too hard to ignore. "That show can cost a manufacturer $150,000 for a booth with drayage and shipping, staff, hotel stays and restaurants. To take on all that expense and show only a few new items doesn't make sense. For cabinet and appliance companies, I cannot even imagine what they're spending, because it is all based on weight," he adds.
For perspective, he estimates that a 10'x20' booth at other conferences, such as the Decorative Plumbing & Hardware Associations' (DPHA), would allow exhibitors to showcase product for less than $5,000.
He continues: "At KBIS, it's $35 per square foot. You have the expense of shipping the product there and back, and creating a booth each year. I could see spending $150,000 every other year, but I can't justify doing it every year."
Marquez agrees that escalating costs make it more difficult to participate. "It all boils down to ROI. The economy is tough and companies, small and large, are strategically placing their dollars where they see the higher benefit. A [company] may rather spend money on a local ad campaign that drives sales versus spending funds on attending an industry show," he says.
For some manufacturers, it also comes down to examining other options, including European shows. As Barry Goldberg, president of Union Hardware in Bethesda, MD, notes: "All of the U.S.-based shows provide us with limited opportunities to differentiate ourselves from our primary competitors, so we believe the better investment is to go to the European shows."
The location of the show has also been a source of debate among attendees, as the host city plays a key role in both the cost and the number of attendees. Host cities are contracted years in advance, with only a small handful of cities in the rotation.
Traditionally, the Chicago shows have been well attended, in large part because the city is centrally located and easily accessible. As Karas notes: "Chicago is an important market, which is why KBIS will be back in 2012, and will continue to be considered along with other major markets for future shows."
However, others have argued that Chicago is excessively expensive, with high union fees making exhibiting cost prohibitive.
Additionally, returning to Chicago every other year gets stale for some. As Krengel states: "I've heard from several people that having the show in Chicago every other year makes people more apt to skip a show."
However, Las Vegas presents challenges not only in its less-than-central location, but also in the fact that it requires a mid-week show, which creates a huge strain on small firms that can't afford to be out of their showrooms for a full week.
The rotating schedule is designed to make the show accessible to everyone, and Karas says: "By changing locations, we share the convenience and value of KBIS with kitchen and bath professionals spread out over a huge geographical area."
But are the current location choices the best ones for attendees? When the show was at its zenith, few cities were able to accommodate such a huge event. However, times have changed, and many manufacturers and dealers feel the industry might be better served by considering less expensive alternatives to Chicago – and Las Vegas, for that matter. A smaller host city, they note, might be more cost effective. And adding some different cities to the mix might also help to rejuvenate KBIS, they point out.
"How about a mid-country spot like Denver, Houston or Dallas?" says Hissa. "I believe more people may attend the show if it is more regionally appealing to them."
Campos agrees: "TOTO believes it would be a good idea for KBIS to identify another city in which to host the show – possibilities might include Dallas, New York or San Francisco."
But Goldberg suggests that, while this may be a good idea in theory, the execution could be complicated by existing contractual agreements. "[The organizers of] KBIS have shown that they are interested in understanding and improving problems via surveys and focus groups (see related story below), but given that contracts for these convention centers are signed so many years out, I'm not sure these efforts can yield the necessary results in a timely enough manner unless enormous amounts of money are forfeited," he explains.
When asked if it would be possible to break venue contracts or what it would cost to do so, NKBA and Nielsen declined comment.
With all of the changes in the industry and a still-struggling economy, what do manufacturers and dealers/designers see as the future of KBIS?
Some, like Hissa, believe the show needs to evolve away from being primarily product focused. She states: "I would really like to see KBIS head more in the direction of a kitchen and bath design showcase rather than a product show. I do not need to travel across the country to see new colors coming out."
Others believe it will be technology that ultimately redefines the show. McGeehan states: "I believe the future for KBIS holds opportunities for expanding the reach through digital technologies like webcasts, podcasts and virtual booth tours," she says.
Rosenberg agrees: "The way social media is working, information is so readily available now. Perhaps the NKBA should look at a virtual show."
Cross believes KBIS can remain influential in the industry as long as it continues to evolve: "All trade shows try to continuously reinvent themselves so that they are relevant and representative of what is happening in the industry. I would expect that industry-leading shows, such as KBIS, would adhere to those best practices."
However, if KBIS doesn't evolve, many believe the show could be in trouble. Leuthe says: "I certainly do not want to see KBIS go away. But I think NKBA needs to take a look at the positive things that made manufacturers come and people want to attend, network and learn."
Karas concludes: "Our goal is to produce and deliver a show that serves the entire kitchen and bath industry in a way that isn't available otherwise and, despite the current economy, I'm confident KBIS in April will once again demonstrate that commitment."