Will trade fairs become 'Virtual Reality Shows' in 2021?

Overall, according to AUMA, up to 70% of all trade fairs planned for 2020 in Germany have been cancelled or postponed. I do not expect a recovery in the first half of 2021 either. Even if trade fairs are allowed again by the authorities and with the vaccination programme beginning, I believe that it will initially be difficult to convince exhibitors and visitors to attend physical events.

In this blog, Publitek’s Mark Herten, reflects on his conversation with Sylvia Kanitz and the workshop 'Messe 2.0: From square metre to B2B marketing channel' organised by the Federal Association of Industrial Communications (BviK) and supplement the lessons gained with my own experiences and reflections on the future of industrial trade fairs in 2021 and beyond.

What to do without traditional fairs?

Working within a deep technology B2B marketing communications agency, I am naturally concerned about what this ‘fair erosion’ means for companies that have traditionally used trade fairs as one of their most important marketing and sales channels. Germany is a trade fair country.  According to AUMA, 160 to 180 international and national trade fairs, with around 180,000 exhibitors and up to 10 million visitors, take place in Germany every year. These include the most important electronics and industrial fairs such as Hannover Messe, SPS, Electronica, Embedded World, Sensor & Test or Light and Building, to name but a few.

This importance is also reflected in the marketing expenditure of German companies. According to various studies, before the pandemic companies in Germany spent between 37% and 49% of their marketing budget on exhibiting at trade fairs. Even if one takes the average of those two numbers, it is clear that trade fairs play a central role in the marketing mix of German companies.

In 2020, the planned budgets for trade fairs were either completely saved or invested in alternative measures. I doubt that the budgets for traditional fairs will ever come back to pre-pandemic levels. It is to be hoped, however, that the loss of importance of traditional trade fairs will not be used as an opportunity to reduce even further the marketing budgets of German deep technology companies (which in my opinion are too low to begin with), but that the money will be invested in sensible alternatives.

Trade fairs have for a long time been considered one of the most important sources of new leads for many B2B companies. This strong focus on trade fairs as a distribution channel has presented many industrial companies with massive problems in 2020. As physical customer visits were severely restricted, in addition to the trade fair postponements and cancellations, alternative distribution channels were hastily sought. Especially digital content campaigns for the purpose of lead generation and virtual events or webinars have proven themselves here.

The fact that many German industrial companies (in particular) have been dragging their heels or been openly sceptical about digitalisation for years came back to bite them in 2020. In many places, there is still a lack of digital infrastructure, skills and appropriately trained personnel, as well as a sound digital sales and marketing strategy. The tools that are most discussed in this country are actually the least of the problems.

A virtual Messe

In the pandemic year 2020, some physical trade fairs did take place in Germany, in compliance with strict distance and hygiene regulations (with unknown figures on cost-effectiveness). Many virtual or hybrid trade fair and digital event concepts were quickly created from scratch - with very different levels of success. Although the trade fair industry has proven that it can react in an agile manner to an unprecedented crisis and establish digital events, not all concepts have convinced exhibitors and visitors.

This is also shown by the BviK (Federal Association of Industrial Communications) survey on the impact of the pandemic on B2B marketing. The survey showed that only about one-third of the companies surveyed (179 on this question) rated the attendance of virtual trade fairs in 2020 as good or very good. Twenty-nine companies said it was poor or very poor. I think almost every one of us has participated in virtual events in 2020 that were not a success. Accordingly, the prevailing opinion (90%) in the BviK study was that digital formats will complement physical events in the future but will not replace them. Conversely, however, this also means that purely physical events, as we know them currently, will also have a hard time in the future.

Industrial trade fairs in flux

If we are being honest, the pandemic has greatly increased the pressure for change on the trade fair organisers, which for the most part was already in existence. It could also be said that 2020 has shown that, as in other industries, digital trends and innovations in the trade fair industry have long been sleepily or too hesitantly addressed. Because aspects such as changed visitor expectations, the questioning of business trips, the trend towards local trade fairs, doubts about the economics of large trade fairs for exhibitors, growing competition from digital events and platforms and the rise of VR/AR had already led to many predicting the decline of traditional trade fairs  (e.g. CeBIT) before Corona.

It should be clear that a return to continuous pre-Corona growth and the industry-standard splash with ever-larger areas and visitor numbers is probably difficult to imagine in the future. However, it is also too early to dismiss trade fairs altogether, on the one hand, due to their enormous economic significance and the often immature alternatives, and on the other hand, because physical fairs still do some things that are so far difficult to present even with the best virtual events.

This, of course, includes the personal, physical interaction, which is extremely important to us humans (chemistry/haptics/emotions/mood), but also the possibility to touch exhibits and see them in action. Personal contact and confidence-building with a supplier is particularly crucial, especially in the case of products that require explanation, some of which require large investments.

Also, the area of spontaneous discovery (happening to pass an interesting stand of an unknown company), is virtually more difficult to represent, since we usually only find what we enter in the search. The undefinable overall feeling of an event, where the entire industry is shown in its entire breadth and diversity in a narrow spatial and temporal space, is virtually just as difficult to transport - not to mention the convivial gathering and exchange with current and former colleagues, competitors and acquaintances at stand parties or after-show events.

Looking to the future

As I am an optimistic person, I hope that the trade fair industry and exhibitors will see the current crisis as an opportunity for change. At the moment, change is possible at a pace that was largely unthinkable before the pandemic. What the organisers of industrial fairs can/must do in my view:

• Focus on the strengths of physical events by significantly enhancing the visitor experience of industrial fairs, creating more opportunities for personal networking, and bringing the experiential characteristic of trade fairs to the fore. In a virtual customer event, a company can only present its products, but the visitor appreciates at a trade fair that he has the whole industry in one place, in order to be able to compare the offers directly and obtain information from different experts.
• Move away from selling space to exhibitors to selling the added value they can offer as a trade fair.
• Rethink their focus from the paying exhibitor to the needs of visitors (who mostly do not pay to attend industrial trade fairs). Given that trade fairs are increasingly losing their classic gatekeeper function (in a similar way to the specialist trade media), the visitor experience must be placed at the centre of all activities. If the experience/content fits, visitors will be willing to pay for it appropriately - whether the event takes place live or virtually.
• Create digital platforms and communities, where participants can network, exchange professional information, and start business, even in the time when the trade fairs are not taking place. The venue and the trade fair time itself lose importance when globally active target groups can access the content from anywhere. Trade fairs become industry platforms that enable exchange, experience, and business options 365 days a year - with the physical event as a highlight and opportunity for personal networking.
• Perfect data acquisition and maintenance. The breadth and depth of how established trade fairs can collect and enrich visitor data is something that companies usually cannot do on their own. By creating digital communities with trackable user profiles that are meaningful in detail, digital match-making or individualised advertising becomes interesting for exhibitors.
• Build their own content expertise. Until now, most trade fair companies still rely on the content delivery from the exhibitors/associations, but thereby miss the chance to build up topic ownership or to become a driving force within the industry themselves. In my opinion, however, this will be required in the future in order to attract users online and to continuously inspire them.
• Develop their own digital concepts. 2020 has shown that it is not enough simply to transfer the existing concepts into the digital environment. It is necessary to think carefully about which formats work better physically and what can be better be implemented digitally. Both visitors and exhibitors must be able to digitally prepare and extend their appearance/visit.
• Trade fair companies must cooperate. Global competition and digitalisation will also create monopolies in the trade fair landscape. And if the trade fair companies do not set up these global platforms themselves, then someone else will do it (as has happened in many other industries). In the future, there will probably not be dozens of different industrial trade fairs on exactly the same topic, because the visitor does not care about the interests of the trade fair companies. The visitor is only concerned with where they will get the best information/result with the best user experience.
• Focus on content quality instead of high numbers of visitors. Highly focused events with a niche target group have worked well virtually in 2020 and historically to some extent in the B2B area (eg conferences).

That sounds like a lot of work. But, I think, the German trade fair sector is in pole position in many areas, especially in terms of the industrial market, in order to assert itself globally. On the one hand, 2020 has shown that there are some promising alternatives to traditional trade fairs that have been proven to work (sometimes even better and, above all, at significantly lower costs - such as the virtual press events that Publitek has pioneered), but on the other hand, the established distribution channels for products in industry that need to be explained can often not yet be completely replaced. With this in mind: I am looking forward to a real coffee with you at the next hybrid fair in 2021!