Attention shoppers! Super sale in aisle six! - Trend Lines - Intermat, Paris

Diesel Progress North American Edition, July, 2003 by Charles R. Yengst

Visiting Intermat in Paris in late spring was an interesting experience. Besides having trouble with transportation to and from the show because of strikes by the Paris Public Transportation Workers, many visitors found a whole new side to the show. You could call it a softer side, as a number of the exhibitors were selling clothing, shoes, toys and other accessories to compliment their machinery. As I walked around the show on several different occasions, I saw big crowds of visitors trying to get closer to the fabulous sales that were in progress -- not of machinery, but at the company clothing stores.

I did a little research into some of the bigger companies' retail sales at these stores and was astounded at the revenues they generated. Caterpillar, not surprisingly the biggest in clothing and shoes, probably has sales of hundreds of millions annually, with probably tens of millions in profit. That's a better margin than anything they can get from machinery. Case, JCB, New Holland, Komatsu and a few others are also in the retail business. My guess is that some actually are making more profits from their retail activities than from their machinery businesses.

Many of these companies are getting resourceful. I found T-shirts at the Cat Store reading "Don't Tread on Me!" There were, of course, Cat leisure shoes, work boots and Cat sandals for everyone in the family (I didn't see any Cat high heels). Many of the Cat shoes are designed with Cat treads called Cat Claws and there were lots of kids' shoes with kitten paw soles for tromping around in water and mud holes.

The Cat hats, jackets (including one leather job for $600) and sport shirts were also pretty tempting. You can buy Cat polo shirts for golf and this stuff is as good as anything Ralph Lauren makes. Tees and golf balls (described as Cat powerballs) were also available.

Over at the JCB stand, I caught a glimpse of Sir Anthony Bamford working the company store. He was autographing T-shirts and shaking hands with all the visitors. JCB had a great two-for-one deal on button-down dress shirts with the JCB logo. As a sidelight, JCB had its "Dancing Diggers" routine, which always draws a crowd, but the merchandise store still got the big play.

Komatsu had a unique stand. Along with all of its equipment and fancy colored machines, the company had a slick promotion for its new Komatsu Visa Card, called KomVisa. The gimmick was that you could apply every dollar charged to the card to purchase Komatsu machinery or Komatsu merchandise at the Komatsu Store. There was a line about 100 meters long waiting for this deal, and if you got your application in during the show, you got 25 percent off any purchase made on the stand -- machinery or clothes. I thought about taking advantage of the special offer to pick up two PC-200 excavators for the price of one, and maybe getting them to throw in some monogrammed Komatsu socks and shorts and a hat at no extra charge.

The real show-stopper was over at Michelin's stand. There you got to see endless tires -- big ones and little ones and some newly introduced tires that never lose their tread. But the draw at Michelin was its retail store where you could buy Michelin Man suits at $19.95 or three suits for $40. Can you imagine? I have always wanted to have a Michelin Man suit, particularly in Paris, but it has never been available in any of the clothing stores I have been in. After the third day, I was able to wear my suit to the show and no one knew it was me. I think every machine operator that attended the show on the last day bought one of the suits to wear on the job the following Monday morning. Paris must have been a spectacle the week after, with hundreds of Michelin Man operators working on the streets and construction sites. Good advertising for Michelin too!

Other than the transportation snafu, Intermat was a good show Companies offering retail goods had a great idea and it made the show special. I came to the conclusion that kicking butt with boots rather than machines was a whole lot more profitable this year. Furthermore, it was much more entertaining watching sales people pushing hats and jackets than trying to make motor graders or wheel loaders look sexy.

I rather imagine that before long all of the OEMs will be into the retail thing. It is the latest fad in the machinery industry without question and most OEMs these days are copying each other as soon as something turns the customers on. "Sell machines in the good years. Sell jackets and T-shirts in the bad years." I can hear it now at the 2004 Bauma in Munich --"Achtung! Achtung! There is a super sale in aisle six! Case's basement is having a clearance on hats and dozers. The first 100 visitors buying a hat get a free dozer and a chance to win a slightly used Bradley fighting vehicle." I've always wanted a Bradley to outdo the Hummers in my town. Guess I'll head for Munich in 2004.

CHARLES R. YENGST IS PRESIENT OF YENGST ASSOCIATES, WILTON, CONN.