Not too long ago, a businessperson wouldn’t think twice about attending a trade show packed to the brim with other guests. That changed when the COVID-19 pandemic shook the trade show industry to its core as most business travel was canceled, and people skirted away from gathering in large groups.
For Milwaukee-based Derse Inc., one of the largest designers and builders of trade show exhibits in the country, the pandemic resulted in mass layoffs. In June of 2020, with business at a standstill, the company laid off 87 employees, which was almost a fifth of its total workforce at the time.
While Derse took a hit at the start of the pandemic, the company has since rebounded and had its best sales year ever in 2022, bringing in $205 million and employing upwards of 550 people. Out of those 550 positions, 250 were filled in 2022.
“As we navigated the reopening of the economy, our business came roaring back and we had to both take employees off of furlough as well as hire new employees,” said Brett Haney, chief executive officer of Derse.
In 2019, Derse generated $171 million in sales and employed about 490 employees, including 150 at its Milwaukee headquarters, and at its other facilities in the Chicago area, Pittsburgh, Dallas and Las Vegas. All of those locations remained open throughout the pandemic.
“We ultimately had a lot of confidence that the industry would return,” said Haney.
Derse is not the only organization with hope for the future of the trade show industry.
PwC estimates the business-to-business trade show market will return to its pre-pandemic market value of roughly $15 billion by 2026. That’s after the segment contracted by about 65% to $5.6 billion in 2020, according to the firm’s 2022 Global Entertainment & Media Outlook.
While the trade show industry was on hold for several months, Derse kept busy by launching a virtual events group and acquiring two competitors. Those firms were Chicago-based Nichols Display Group and Columbus, Ohio-based Exhibitpro.
“We’ve had growth as we’ve come out of COVID really from three factors. One, most of our significant clients before COVID are spending more money with us now than they did before. Two, we’ve won a lot of new clients this year. Three is acquisition,” said Haney.
Derse manages exhibit programs for approximately 500 clients at more than 8,000 individual events each year. The kinds of exhibits the company builds range from tabletops to complex, double-deck exhibits with multimedia presentations, special lighting and fully operational equipment or products.
While most companies are looking to save money in 2023 to combat the rising cost of goods and labor, Haney said one area businesses are not looking to skimp on is face-to-face marketing.
“We’ve got so much pent-up demand for the type of work we do that our forecast for 2023 is that we’re going to have a much bigger year than 2022,” he said. “A lot of what our customers have reported back to us is their marketing budgets have shifted away from things like digital and social media and there’s more money coming into what we do.”
Following record lows in 2021, marketing budgets rose to 9.5% of revenues in 2022 but still lag pre-pandemic levels, according to a survey of chief marketing officers conducted by tech research and consulting firm Gartner Inc.
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A constant evolution
Derse opened in 1948 and was originally a sign painting business based in the Milwaukee garage of founder Jim Derse’s mother. Over the years, Derse moved into making billboards and exterior signage before eventually starting to build trade show exhibits.
Like any industry, makers of trade show booths and exhibits have also had to adapt and keep up with modern demands. Haney explained a lot of trade show booths that were constructed 20 to 30 years ago were very heavy and made from wood and metal. The industry continues to evolve and use more lightweight solutions, like fabric. Technology has also become a more significant part of booths through the use of LED screens, lighting and other components.
Derse’s ability to leverage its decades of experience and meld that with the modern desires of clients has allowed the company to bring customers back.
“One of the clients we recently won back was GE Healthcare. The scale of their booth is almost the size of two football fields,” said Haney.
Looking ahead, Haney said he expects to add another 50 to 60 jobs within the next year, with half of those positions located in Milwaukee. This is in addition to the more than 250 employees Derse has hired in the past year throughout the country.
As the company continues to welcome new employees across its entire footprint, training and integrating the new workforce will be front of mind.
“For me, my priority in 2023 is reinvesting in our employees, making sure they’ve got the training and support they need,” said Haney. “We hired 250 people last year. That takes a lot of work to integrate those people into the company and make sure they’re successful.
Derse is also moving forward with previous plans to open a location for building and servicing exhibits overseas. Where that location will be has yet to be decided.
“That’s certainly on the priority list and my expectation is within the next couple of years we’ll have our first foothold in terms of European expansion,” said Haney.
