Bundling in the Exhibit Industry

With the rise of two major show service contractors in the US, the issue of bundling has come to the forefront. Bundling of services is when a show service contractor, bidding on an exhibit, will include a typical service like drayage, labour, carpet, rental furniture, etc in a proposal to entice the buyer to choose them as the ultimate exhibit provider.

From the clients perspective there is an advantage because they will see a reduction in their cost of exhibit ownership.

From the show services contractors perspective they are using their competitive advantage to grow their book of business. After all the US was built on capitalism and this is capitalism in its purest form.

From the exhibit company䴜s perspective they are upset because they do not have the ability to offer the same level of discounting to capture the business.

All parties have different views on this issue but ultimately pure market economics highlight the real issue. Running a major tradeshow that utilizes 500,000+ sq feet is a costly venture. The rates charged by the show service contractors for all show services return a reasonable profit. These profits are not excessive which indicates that the rates being charged are in line with market demand. When services are given away through bundling the rest of the exhibitors subsidizes this loss of revenue. This puts an unfair burden on the rest of the exhibitors. Also important to note, the client who had their services bundled in the first year will be subsidizing the cost of other bundled clients in future years.

If taken to its ultimate conclusion and bundling starts to eliminate competition, creative design and innovation in exhibits will decrease significantly. Cutting edge exhibits are created by clients that want to stand-out from their competition example Sony/Microsoft/Nintendo at CES. But cutting edge exhibits are also created through healthy competition as exhibit companies try to impress clients with their innovative design ideas. Eliminate the competition and the need to invest heavily in design ideas decrease.

If you have any thoughts on this issue please feel free to add your comments. This is an issue that is likely to be at the forefront of the industry for quite some time.