Buyers. Sellers. Goods. Trading goods and services has come a long way since buying bananas in exchange for your goat at the local bazaar. But how is the oil and gas industry doing it?
Well, it doesn’t seem like the industry has moved on that much.
Shortly after my first visit to Aberdeen I was greeted by 5 halls packed full (at a guess 300-400 per hall) of exhibition stands. Hundreds of suppliers lining the aisles of the halls, from the latest drones to standard drilling equipment to some new type of resistant Korean paint. All in one place where you could chat to a sales rep, see the equipment (to the extent that it fits into a stand) on show, drum up some purchases.
Why does this happen in the industry?
But at what cost? Anecdotal evidence (i.e. me asking a few of the sales reps) suggested that the market for a medium sized exhibition stand was £30,000 to £100,000 for the entire week. This excludes sales rep costs, travel for those mostly based outside of Aberdeen, and presumably a few sunk costs in making the place look pretty. Added up this is a very large burden for companies that are, on the whole, SME’s. And why?
The answers I got when I asked different people ranged from:
- “You have to be here or you are no one”
- “If you pull out one year you lose your place and go to the back of the queue”
- “People will think you have gone bankrupt”
- “It is a good laugh”
The most interesting response was when I asked someone if he found it difficult being visible to buyers, what made it so difficult as to warrant such levels of expenditure and whether there was a smarter and more effective way to reach out to buyers. The answer, to my surprise was “all the buyers know me, they can find me, I do not need them to be able to find me”. Bit of a strange reason from someone manning an exhibition stand in order to drum up sales, I thought.
The cost burden on the industry
Upon further reflection, this kind of trade fair is symptomatic of an industry with a high cost basis. There are hundreds of thousands of suppliers out there, all providing different goods and services to the oil industry, all dynamically vying for business from buyers. Why create a restricted VIP list of suppliers who need to sink so much money into having an exhibition stand, just to get a shot at getting business? Why narrow your supplier base? Is the industry really stimulating a dynamic competitive supplier market, finding and comparing suppliers with ease and allowing competition (= cost reductions) to thrive?
There were a few ‘high tech’ stands (some showing some very cool technology). The irony of the stand with Virtual Reality (VR) technology was not lost on me… fly up to Aberdeen to find a stand showing how you don’t need to fly anywhere to immerse yourself in a different environment…
At the other end of the spectrum, the DeepStream team went to see Microsoft HoloLens in London. They are the leaders in what they call Mixed Reality, sitting between Augmented Reality and Virtual Reality. In short, you put on some very techy glasses and 3D objects start appearing within your (real) environment around you, and you can play with these objects as if they were actually there. It could be a game changer in viewing different types of supplier equipment without having to transport the actual equipment to an exhibition stand. The team at DeepStream got very excited about seeing if we can launch the first Oil & Gas Mixed Reality Conference… hopefully more to come on this in the future.
Exhibition stands online?
One way to think of DeepStream is an online virtual exhibition stand where all buyers and suppliers are in one online place: demonstrate all products, pre-qualification standards, testimonials etc. And by the way, we are open 24/7 and 365 days a year.. even on Christmas.