The Dallas Market Center is riding out the pandemic with new strategies and tactics.
Photo: Dallas Market Center
When the Dallas Market Center opens its winter wholesale market for the gift and home furnishings trade this week it will represent a rather remarkable event for an industry that, like so many, has been impacted by the Covid pandemic.
And for its owners, the giant privately owned developer and operator Crow Holdings, it also signifies its continued confidence that the business-to-business trade show model remains a worthy investment and an ongoing business despite the impact social distancing and safety measures have had on large-scale events .
As with many businesses — retailers, restaurants, travel — the trade show and market center industry has been severely challenged by the pandemic. Many — in fact, most — wholesale shows starting in March 2020 were postponed, often postponed again and very often cancelled all together. Those that were held, here in the U.S. as well as overseas, were severely truncated, with both attendance and numbers of exhibitors down significantly from historical levels.
Many were supplanted or outright replaced by virtual events, held on Zoom and other platforms. Some of these were organized by the physical trade show operators themselves or by third parties. And while they served a purpose connecting buyers and sellers, they could never hope to duplicate the in-person process that is the backbone of the global B2B model.
Dallas Market Center measures out at around five million square feet of exhibition space, housing both permanent and temporary showrooms for a number of industries including home furnishings and décor, lighting, gifts, apparel, artificial florals and starting in 2021 the western apparel and accessories sector. It was one of only a few show operators that held physical shows in 2020, a function of its open building layout, Texas’ pro-business atmosphere and its determination to ride out the pandemic as best as possible.
Harlan Crow continues to see wholesale market centers as viable business investments.
Photo: Dallas Market Center
For Crow Holdings, DMC’s performance is a key reason it continues to believe in the market center model. “We cannot recover from crises like the COVID-19 pandemic without a resilient retail sector and the market centers have a critical role in participating in that recovery,” said Harlan Crow, chairman of the company, founded by his father Trammell Crow, a larger-than-life Texan real estate developer who helped invent the wholesale trade center business when he started DMC in 1957.
“That’s why we believe the market center business model is extremely well positioned for both the short-term and the long-term. It’s a solid investment today because its customer communities of retail and interior design remain strong,” he said, “and in part because of its diverse portfolio of industries that may be adjusted as demand shifts for particular products.”
“We have an extremely durable business model,” echoed DMC president and CEO Cindy Morris, a long-time executive with the complex who assumed the top position in 2015. “We remain a critical hub for commerce, centrally located and the only market in America able to offer all the products for a retailer to offer a true lifestyle” merchandising assortment.
DMC president Cindy Morris sees the pandemic as the biggest challenge she has faced.
Photo: Dallas Market Center
Morris, as most executives in her position will admit, said it was hard to predict how to handle the pandemic crisis but she said “it’s probably the most important opportunity in my career in B2B.” Covid began to impact American business shortly after the January 2020 markets in Dallas and by the early spring it was clear business would not be as normal. The market complex shut down in late March and remained totally closed for about six weeks. Once reopened it moved gingerly to restart. The big June shows for lighting, gift and home were postponed until August and smaller regional shows for apparel and home were scaled back to reflect health and safety measures.
As such, DMC reacted in a similar way to its main competitor in the home space, International Market Centers, which operates large facilities in Atlanta, Las Vegas and High Point, NC. It too cancelled or postponed spring and summer events and those that were held were lightly attended. Other operators who host shows at convention centers in a variety of industries from housewares to consumer electronics to apparel sourcing have all cancelled events.
Dallas had one key advantage: nearly a third of its showroom space is open year-round, not just at limited market events, and that allowed it to offer restricted attendance and market activities.
“Our daily traffic is now about 90% of last year’s total,” Morris told Fintech Zoom.com in an interview in late November before the latest wave of Covid hit the country again. “Our attendance has been about 60 to 80% at our market week events but in October, our apparel show exceeded the total number of attendees from the previous year.”`
Rigorous safety measures and Texan attitudes about the pandemic played their part but so did the strength of the state’s economy and what Morris said was the retailers’ need for new merchandise for the holiday selling season. DMC has 31 events on its show calendar for 2021, a slight increase over 2019 but Morris said she expects day-to-day traffic to continue to grow as a percentage of overall attendance.
DMC is also moving to strengthen its position on other fronts. It is launching a digital marketplace platform that is integrated into its physical tenant structure. As such it is similar to the digital business IMC is building out and there are also several freestanding virtual market businesses getting started. Morris says the DMC platform had an edge because of its integration of physical and virtual as well as the wide assortment of products.
It will have one other component down the road when DMC’s new investment in a market center in Dubai in the Arab Emirates kicks in. This is the second international business Crow Holdings is involved with, adding to its long-time investment in a trade mart in Brussels. “From the start Trammell Crow recognized the global aspect of this business,” Morris says.
The virtual platforms will continue to gain prominence in the wholesale buying process, she said, but speculation that they will replace physical markets and events is just wrong she stresses. “I’m bullish about the entire wholesale model for Dallas. Yes, retailers may use online platforms for the reorder piece of the business, but they still need to see new products in person and we have the best place to do that. The foundation for our business is well.”
Harlan Crow believes the same thing. “Our continuing investment in Dallas Market Center as well as the Brussels Trade Mart follows a legacy of experiencing the power of bringing buyers and sellers together. There is no greater success story than that of the independent business owner, and we continue to passionately support the brands and the retailers who create economic vitality for their communities.”
As a privately owned entity DMC does not talk about its revenue or profitability but Crow sounds like a satisfied owner. “The Dallas Market Center has offered a remarkably consistent return on investment.”