Fundamental changes have been introduced for the PSI Show 2017: For the first time there is going to be a day for industry customers, invited by PSI distributors, they will be granted official admission to Europe’s biggest trade fair for promotional products. eppi magazine spoke to the PSI Director Michael Freter about the industry changing with the times, the controlled involvement of the users at the show and the futility of visitor smuggling.
Mr. Freter, as Europe’s largest trade fair for promotional products, the PSI Show in Düsseldorf 2017 is going to be open to end users for one day. What does the PSI as the organiser think this measure will bring and what can the industry hope to gain from it?
Michael Freter: We are not opening the trade show to the industry customers, but are indeed using the Industry Customer Day as an expansion of the clientele for our exhibitors and distributors. The desire for the expansion, which incidentally came from within the sector itself, clearly corresponds to the development that the industry currently sees itself subjected to. The promotional products industry must raise its voice in order to place and anchor promotional products more strongly in the marketing sector. The PSI Show is the ideal platform for this aim, because it is the show worldwide, where promotional products are presented the most impressively. We have to exploit this. The promotional product has to be presented to the marketeers precisely in this setting in order to generate more demand. The expansion is therefore an opportunity and could boost the industry.
The concept of the target group expansion of the PSI Show was initially worked out by the Trade Show Working Committee of the German Promotional Products Association, the GWW. How did it come about that the association became involved in the concrete shaping of the PSI product?
Michael Freter: As the largest trade fair organiser worldwide we always involved industry representatives, the exhibitors and the visitors in the further development of our trade fairs. It was accordingly a logical step to involve the GWW Trade Show Working Committee, the manufacturers, branded companies, consultants and the PSI. The PSI Show is the mirror of the industry and has to be aligned to meet the needs of the times. But we can only secure the acceptance for a change with a customer-oriented concept.
In 2012, the PSI already launched an attempt to open the trade fair to the target group of promotional products users in a limited way in the form of the “Promotional Products Day”. At the time this was met with protests from the industry, with the result that the PSI ultimately shelved the “Promotional Products Day”. Today, the acceptance within the market appears to be much higher. What has changed over the last four years?
Michael Freter: The world has changed considerably over the last four years. Today, the trade can no longer close its eyes to the “industry customer” theme. This has become especially noticeable from the fact that the industry customer has gained access to a wide range of industry trade fair formats over the past four years. Many in-house shows and more recently new formats such as the HAPTICA ® live are examples of this. The industry is changing with the times. It has realised this in the meantime and that is why we are once again addressing the theme of the controlled involvement of the end customers together with the GWW. Whereby the emphasis lies on the “controlled involvement”. Most other formats can’t and don’t want to try to achieve this.
What response have you had so far from the industry regarding the plans to expand the target groups of the PSI Show 2017?
Michael Freter: The response is very positive. Above all from the trade, with whom we are holding intensive discussions about the implementation of the concept at distributor council meetings and distributor congresses. We have received a lot of enquiries, especially for the Distributors Counter in front of Hall 9, which can be hired for consulting discussions and meetings between consultants and their customers. But the acceptance is also very high among the suppliers, which is reflected above all by the fact that the show is now virtually sold out already. So, we are on the right track.
The industry customers are only allowed to visit the PSI Show on the third exhibition day and then only if they have been invited by a distributor. How does the invitation and admission procedure work exactly?
Michael Freter: Industry customers can exclusively visit the show on the personal invitation of their PSI promotional products consultant and only promotional products consultants, who are PSI-members and have already registered to visit the PSI 2017, are allowed to invite their customers. After registering, the consultants receive invitation codes, which they can pass on to their industry customers. Industry customers, who turn up at the show without an invitation code from their personal PSI promotional products consultant, will not be granted admission.
Critics of the concept fear that the exhibitors’ staff at the stands could communicate net prices to the industry customers instead of gross prices. How will the industry customers be distinguished from the distributors at the show?
Michael Freter: The on-site identification of the industry customers will be very visible to everyone, because the industry customers will receive especially labelled badges on entering the show, which are a different colour to the “normal” visitor badges. Furthermore, on booking their stand the exhibitors will receive a scan app. On scanning the visitor badges it becomes visible that the visitor is an industry customer and which consultant has invited him/her. Of course, we have taken the necessary precautions. On Thursday, all of the exhibitors are requested to communicate exclusively industry customer prices at their stand. In order to make sure this happens we are contacting all of the approx. 900 exhibitors in the run-up to the show both in writing and personally to inform them accordingly. We are really pressing this point.
In the past, many distributors rejected the opening of closed-shop trade fairs, because they were worried they would lose their customers to competitors or because it would promote direct business between the suppliers and their customers: How are you countering such fears?
Michael Freter: In the era of the internet, a high level of transparency has automatically evolved on the market. But even in the pre-Internet age, different industry customer magazines had advertised the way to the source in adverts or articles. Did that damage the market? Did this provoke criticism? Furthermore, the industry knows exactly in the meantime that hardly any closed value chains exist anymore. The trade has to develop into becoming a consultant – an all-round service provider – in order to remain competitive. When industry customers attend the PSI, they will very quickly realise how important the distributor/ consultant is for them. They will be totally overwhelmed by the offer. This is not the case at small trade fairs. The temptation is much bigger in the family-like atmosphere.
The PSI Show is the most important contact point for the business between the suppliers and distributors. Will the exhibitors have enough time and room to talk to their suppliers in spite of the target group expansion?
Michael Freter: The PSI Show still offers the distributors and exhibitors sufficient time for joint discussions and a product information exchange. The first two days are not bookable for industry customers so that particularly these day can be used intensively for advance information. Besides nowhere near all of the visitors to the show will bring an industry customer along with them. After all it is totally their own decision. So, many of the visitors will use the third day as in the past.
Even if it wasn’t officially allowed before: In the past, many distributors brought their industry customers with them to the show disguised as employees, which was mostly not sanctioned. What will this present regulation change in practical terms?
Michael Freter: It wasn’t just the distributors, who smuggled people in, but the exhibitors as well. We have to be fair on this point. In principle in 2017, as a result of the Industry Day on the Thursday, there is no need to smuggle one’s customers into the show disguised as whatever. Of course, this could still happen. How could one guarantee it doesn’t? However, in principle there would be no sense in it. We have to rely on the honesty and support of the suppliers and distributors here.
How is the PSI promoting the 2017 show to the users?
Michael Freter: In the scope of the concept development by the Trade Show Working Committee of the GWW, it was laid down that the invitations to the industry customers should exclusively be extended by the trade. Here established contacts exist that are based on long-standing, trusting collaboration. Our PSI exhibitors are also motivating their trade partners to invite industry customers and are placing whole areas of the individual exhibition space at their disposal as consulting areas. The distributors will then advise their industry customers at the exhibition stands of their suppliers – that wouldn’t have been conceivable a few years ago. A further convincing argument for the change that the industry is undergoing. The PSI is accompanying these invitation campaigns with PR measures in the leading industry trade magazines. We are just telling the industry customers: If you want to have access to this big world of promotional products, then please contact your familiar service providers or consultants from the trade.
How many industry customers are you expecting to visit the show?
Michael Freter: That is difficult to say and unfortunately very difficult to foresee. We won’t know more until a few weeks before the PSI. Internally, our expectations are initially reserved.
Are other activities of the PSI directed at the industry customer in addition to the target group expansion of the show? Will the promotional products users for instance be able to become PSI members in the future?
Michael Freter: It is not planned that promotional products users will also be able to join the PSI – there would be no sense in that. We support and promote all kinds of communication that informs the industry customer that there is an outstanding trade fair with highly-effective promotional products. And the industry customers can access this world if they allow the distributors to advise them. In the end we will all profit from this.
// Dr. Mischa Delbrouck spoke with Michael Freter.
A revolutionary innovation or just the legitimation of the already long-since living reality? A step towards more professionalization or the beginning of the end of the established distribution structures? eppi magazine asked international industry professionals.
In my opinion one cannot assume that the introduction of an industry customer day is the start of the end of the established distributor structures. When these do change, trade shows are rarely the cause. It is more a question of profitability, sales efficiency, etc. Changes will no doubt arise – but the PSI will not be responsible for them. I personally believe the opening will bring about interesting perspectives: i.e. the involvement of the public, perhaps even politicians. Beyond this it is also clearly recognisable that the PSI is taking the preparations very seriously in order to energetically prevent possible upheavals. It is still my opinion that it is a huge chance for our industry, if it is possible for all other stakeholders to visit the PSI in its capacity as the leading European show. The concept and the offer of the PSI Show are definitely appropriate for the target group of marketing decisions-makers and promotional products buyers. Everyone, who visits the show for the first time, is amazed by its size, professionality and biodiversity. I think the PSI is prepared in this respect. However, since it is the first time, I hope the PSI will have suffice opportunity over the coming years to further develop. If everyone cooperates this will be no problem. Ten years ago it was impossible to cope with the flow of visitors and distributors completely on all three days of the show, in the meantime though, there are quite a few idle periods. So, I don’t think it will lead to the distributors being neglected. Apart from that I don’t assume thousands of end customers will attend in the first year. We will certainly plan a slight increase in the number of staff at the stand and the change to the concept will be taken into account in our preparations and training for the show. But we are familiar with this scenario from hundreds of in-house shows, so I am sure it won’t cause us any problems.
We are positive about the opening. The PSI is the industry’s leading trade show, so it should be accessible to all possible target groups. The promotional products industry experiences constant further development, strives and needs to be always on the pulse of time. So, why shouldn’t one see the change as an opportunity? Today, it is possible for the decision- makers – also for end users, of course – to call up details about products and suppliers worldwide online. The opening of the PSI gives the exhibitors the opportunity to speak with the industry customers directly in person, recognise their needs and react to these. Here, the distributors play the role of a kind of “sales representative”, a partner on-site. A manufacturer can’t possibly take on this function. Nothing about these structures will change for the industry as a result of the expansion of the information options. Overall, I think the industry customer day will have a positive effect and give the sector a boost. We are expecting a high frequency of visitors on the Thursday and are currently planning how to deal with this. However, we intend to stick with our style of welcoming the visitors in a Bavarian atmosphere.
We are very optimistic with regards to the PSI Show inviting users to attend. The new approach serves the exchange of production information and is in line with the current developments in the promotional products industry. Many distributors have been advising their customers together with their suppliers for some time already, falling back on their product know-how here. As long as there are clear communications between all of the parties in dealing with enquiries and samples, the target group expansion is a positive development. The PSI Show is a good opportunity to demonstrate the diversity of the industry. However, whether the expansion will lead to a higher attendance figure remains to be seen and depends on the commitment of the PSI as well as the readiness of the participating distributors to invite their customers to the show. A well-organised registration process and the clear, well-visible identification of the industry customers with corresponding information as to which distributor has invited them are essential – we recommend one of the trusted systems used in the industry. If everything runs smoothly and we can recognise which distributors have invited which customers, misunderstandings can be avoided. A further decisive point is that all of the exhibitors stick to the rules, keep the structures clearly in mind and don’t abuse the target group expansion as an opportunity to do direct business. In general, all of the parties have to be wellinformed. The end customers have to know that they are participating on invitation of the distributors and that no direct business will be done. Since we don’t approach the end users directly on the European market and are not represented on the retail market, we cannot yet communicate the corresponding prices. As our customers are based in different countries, our teams are divided up according to languages. Assigning special staff to take care of end customers will be a difficult yet possible approach. We are hoping to receive advice and help from distributors and agencies to ensure a fair cooperation.
I don’t think the target group expansion of the PSI is a good idea at all. We need room for shows that are exclusively for distributors and there are currently only two of this kind in Germany, namely the PSI and the GWW-Trend. All of the new trade show formats directly address the end customers. It remains to be seen what effect the target group expansion will have on events like the HAPTICA® live and the Newsweek, which also address the promotional products users. As a result of our experiences at these trade fairs, we know how to deal with addressing both the trade and the end users parallel to each other, so I don’t assume the new admission policy will weaken the structures of the industry. I can’t agree with the assertion that there weren’t enough visitors at the PSI on the Friday. To me it seemed like there were still too many, who didn’t visit our stand. I am expecting increased attendance in 2017, alone through the fact that many people will be curious and want to see how the concept is implemented and whether it is worth visiting the PSI. Nevertheless, I expect the exhibitors will be rather disappointed. Considering the size of the show and the number of exhibitors and products displayed, one day simply doesn’t suffice to see everything and inform oneself completely in detail. Hence, the new visitors will only be able to gain advice at a few stands. Ultimately, we haven’t decided how we will prepare ourselves for the different groups of visitors yet, but we will place the main focus on the first two days, when we present and offer our novelties to the promotional products distributors. As far as advising the industry customers is concerned, we will concentrate more on our overall presence. Because not all of the promotional products distributors have offered our new products from the last years to their customers. We have generally changed our price lists over to gross amounts.
Granting users admission to the PSI 2017 is a fresh and contemporary idea and goes hand in hand with the market development towards more transparency and more open, multi-stage communications. Thanks to Google, Facebook, Twitter and similar platforms everything can be found on the Internet today. Everyone can enter a product on Alibaba or Ali-Express and find out how an item can be ordered from the Far East or elsewhere. Haven’t distributors already been buying goods directly in China for decades already? The supply chains were never completely defined and set. That is why it is not possible to claim an exclusive right to an end customer. On the other hand, of course the distributors have the choice: In most cases, anyone, who doesn’t trust his supplier with regards to how he handles the end users or doesn’t consider himself respected in his role as a distributor, finds ample alternatives. We all know that many of our colleagues have been taking their customers with them to the PSI for years. For the exhibitors it was never quite clear, who were distributors and who weren’t. Some of the bigger end customers even founded a promotional products company, became members of the PSI and thus automatically gained admission to the trade fair. Obviously both measures paid off. Since 2008 the number of exhibitors at the PSI Show has declined rapidly, occupying five halls in former days, today it only spans three and a half halls. When the PSI invites a new target group to the trade show, it becomes more interesting for the exhibitors to invest in a good trade fair appearance. New exhibitors and new visitors are attracted and the show benefits as a whole. Those, who fear these new developments, should ask themselves whether they can trust their suppliers – and whether they still offer added value as a distributor and consultant. Since we have confidence in our added value and market expertise, we will definitely invite several of our customers to accompany us on the PSI Thursday. Because this means they will gain a better insight into the product offer and with the aid of the exhibitors and their expertise, we can discuss future projects even more efficiently.
In a market that constantly experiences fast change, it is important to be dynamic and adjust to suit the market developments. Against this background, the new admission policy of the PSI Show is a contemporary and perhaps even necessary step. There have been shows that grant end users admission in other places for years. For many distributors the PSI Show has lost some of its appeal over the past years, among other things due to local shows in Europe that were visited instead. Many exhibitors were recently dissatisfied with the prices, the service and lacking flexibility as well as the problematic membership policy of the show. Hence, opening the show to end customers is an attempt to make the event more attractive again. I am eager to see how the premiere goes, but my expectations are not all that high. A few more visitors will attend, but it will take years for the attendance figure to increase significantly. Furthermore, in our capacity as exhibitors I don’t know how we should receive the two target groups as exhibitors: Many of the users are not very familiar with the products and hardly have any knowledge about the individualising techniques. However, primarily I believe that many of the exhibitors from Germany and the Benelux countries will benefit from the extension of the target groups, however the exhibitors from the rest of Europe will hardly profit from this expansion – because I think it is extremely unlikely that a German industry customer will order the products of a foreign supplier. The German users want to speak German, want samples fast and expect the service they are accustomed to receiving from their German distributors. A lot of European suppliers can’t afford this due to logistical and language barriers, partly also due to differences in the mentality. Of course, I would like to place an order with a big, German company via a trading partner, but I don’t know how this would work.
With the introduction of the Industry Day, a format is being brought to life that has been strived for for years, whereas at the same time one is fully aware that the trade is clearly against this move. I find it inappropriate to talk about a further devised concept of a “PSI Adviser Day “. It is more the case of having being forced into something. Certain circles have raised expectations that definitely won’t be met. The new admission policy is a clear attack on the trade, even if this approach is being communicated in a different way. It is particularly amazing when one considers that 3,500 of the 6,000 PSI member companies are distributors. The interests of the PSI lie elsewhere. The odd end customer is bound to take the opportunity to have a good look round on-site – and this will lead to the margins coming under even more pressure. For us the PSI Show is an important venue, where we meet up with the suppliers, update ourselves about the new collections and discover novelties. The post-processing is thus extremely important and time-consuming. We attend the show every year with around 20 employees. Already the idea that we have got enough time to trundle round the show with our customers and discuss projects shows how little the strategists of this so-called concept know about the distributor business.
We have reservations about the proposed admission policy. As was always the case in the past, it still makes sense to separate industry events from those that target the users: The way that the exhibitors communicate and the emphases on which the visitors focus their attentions are totally different. It will lead to considerable miscommunications and inefficiency at one event that is already fully booked in terms of commercial development. This move could open Pandora’s Box. Officially, we knew nothing about end users at the PSI Show in the previous years. With end users now being granted admission officially, the attendance figure will no doubt increase. But ever since my first show, I am aware that quantity doesn’t necessarily mean quality. The concept and offer of the PSI Show are not suitable for end users. What is even more important however: Opening the show up to end users is not suitable for our customers – the distributors. The problems that arise in the customer management sector within the trade, will become very difficult to solve in the future. The end users will demand the distributors’ prices and at the same time the resellers’ quality service – an equation that is impossible to balance. Our politics is simple and straightforward: We don’t operate with end users. That is why our commercial focus always lay and will continue to lie on distributors.
I ask myself whether the PSI’s basic idea – bringing the suppliers together with the distributors – is still maintained through the new concept. Originally the PSI Show was the leading industry show, where we distributors were able to get the latest information and experience products first-hand. Open discussions with producers and importers, price negotiations and annual agreements were the objectives of the trade fair. Not to forget: the networking. I have been observing an opening of the show towards the end users for several years, which destroyed the exclusive character of the trade show. The further opening that has now been introduced will weaken the PSI and strengthen other shows. Both the distributors and the suppliers will more and more frequently seek other paths of communication. At the PSI Show in its current form the majority of the exhibitors concentrate mostly on the distributors, and the end users are overtaxed. As a buyer or marketing decision-maker, I don’t need 100 different manufacturers of ballpoint pens, but instead just one that offers me what I need. Even if several manufacturers think that they can score brownie points with their well-planned trade fair appearance and image work, ultimately the only thing that really counts is the value for money aspect. And this is where the distributor comes into play. A clear alignment as a “trade fair” on the one hand and a “sales fair” on the other would without doubt bring the market more security and turnover. The idea behind the registration procedure envisaged by the PSI is not bad, but one does ask oneself the question as to whether the effort will pay off. Defining clear regulations in advance and above all adhering strictly to them is however certainly desired. I definitely won’t invite any customers to the PSI Show. I still try to use the event as a “trade show”. I like inviting customers to other shows, where I can look after them better..
The new concept of the PSI Show is a contemporary improvement – it won’t weaken the industry structures, but instead relax them in a positive way. The trade fair is namely no secret for the professional buyers of the industry customers. The small automobile companies or family-run flower shops that only implement a limited number of promotional products, don’t know the PSI Show of course, but then they don’t want to. One of our good customers has thought about inviting its clientele to the show a few times and ultimately the customer asked him about it. This underlines the fact that the end customer is familiar with the PSI and also readily accepts the invitation. The anxiety of the distributors, which one has to show understanding for, has in my opinion calmed down somewhat in the meantime – at least that is the impression I gained during my last visits and discussions. Of course, there were also plenty of distributors, who were open to the new concept from the very start, because it gives them the opportunity to show their customers much more and gather ideas together with them. On Thursday Macma will only be distributing catalogues at the PSI with a 50% surcharge and bulk prices. Furthermore, we are presenting a totally new exhibition stand, where the distributors can work together with their customers. After prior coordination of appointments, a workplace will be made available to them. All of the industry customers that visit our stand without distributors will be referred to the distributors with whom we closely cooperate.
The PSI is mixing different concepts that don’t fit together. Distributor shows should focus on the distributors. It is the task of the trade to contact the end users and offer them products. When the distributor shows open their doors to end users and thus allow them to come into contact with our suppliers, we will lose their loyalty and create the incentive to buy directly from the suppliers. Especially since several exhibitors would without doubt communicate the “wrong” prices, which would further increase this desire. For everyone, who is interested in a trade fair for end users, a new, second platform should be created – but I certainly wouldn’t recommend any distributor to bring his customers with him to the PSI Show. One asks oneself the question as to whether the PSI will grant the end users direct admission to the show one day – then the PSI would soon have a complete database of industry users and wouldn’t need the trade anymore.