Given that states have begun to reopen their economies in phases, many businesses are pondering how they will resume their roles as reliable entities within their neighborhoods and niches. The COVID-19 pandemic has defined itself as the story of our lives, and there is not a single business owner who has not needed to revise their approach to establishing and growing relationships. The promotional products world thrives on those bonds, so the last few months have found its members working even harder to maintain positive outlooks, with everyone wondering what the coronavirus will do not only to partnerships but also to the perception of goods and services.
As we head toward the summer, industry professionals know that many variables exist, and that any given day could transform a bright spot into a perilous situation or turn a doom-and-gloom mindset into a more uplifting frame of reference. What, then, should expectations be for the state of business as the economy reopens? And what about further out—what will the promotional products industry look like after the pandemic?
Difficult Lessons
In late April, Howard Headden, founder and executive vice president of sales and business development at H2 Enterprises Inc., Naperville, Ill., saw a post in an industry Facebook group that addressed a rebound timeline for industry sales. He commented on the post, noting that his 34 years in the business have bred many challenges that, while painful, did not spell a reduction in his or his peers’ vocational fortitude. This period, he believes, will prove likewise instructional and also not mark the end of the industry as we know it.
“Like the Weeble toy, we will bounce back up since the return on investment we provide with our products is used to educate, create awareness and motivate,” he said. “Promotional products will be even more important during a time in our life that someone coined the ‘Great Adaptation.’”
As we experience that term, what gives Headden, or anyone for that matter, the confidence to believe that the new normal will be a benefit and not a slog? After all, while personal protective equipment (PPE) has given companies a new or enhanced way to gain distinction or remain afloat, is something like Dohan’s revelation—generated through conversations with peers—that non-PPE business is down between 30 and 90 percent not enough to inspire sleepless nights? That range certainly can and has caused trouble, but it won’t keep people from earning a living, especially as shutdowns become less strict. As Headden sees it, suppliers and distributors who have been not necessarily embracing but accepting the modified means of doing business will rebound more quickly than others.
“We’re a country that’s resilient,” Headden said. “And we’re going to need to deepen that resolve by adapting and pivoting. I stray from making a prediction on when we will see the full execution of all of those ideas, because I think the process will be constant and we will see positive moves happening each day.”
Throughout the pandemic, it is fair to say that serious soul-searching has transpired among higher-ups tasked with sustaining their businesses and the livelihood of hundreds, or even thousands, of workers. Having recently left Perry Ellis International, where he served as national account manager, Headden knows that the pandemic has made many people panicky about change. But the cold truth remains that adapting to change is the only fruitful option. Since the promo industry’s sales tally hit a record $25.8 billion last year, it will hurt when figures for 2020 likely fall far below that total.
But Stan Dohan, president and chief operating officer of The Allen Company, Blanchester, Ohio, sees a combination of creativity and continued work among government and health officials as sources of solace. “I hope everyone can remain positive and innovate and stay open, and just learn from what hopefully is a temporary setback,” he said. “The reality is the landscape of promotional products and most industries will be permanently altered. There is opportunity in innovation. Items that are useful, beyond PPE, stand a strong chance. It depends on how fast our freedoms and ability to plan return.”
In a perfect world, let’s imagine that Dohan’s scenario occurs relatively soon. Which realizations, then, will have occurred along the way regarding the nature of what suppliers and distributors look to put out for the public’s consumption, and what will the pandemic have done to business models?
“We really do not know what a return to normalcy really means at this point,” said Joel Flambaum, vice president of WebbMason Marketing, Chadds Ford, Pa. “In the near and possible long term, marketing budgets may not exist, as money has shifted into PPE and workplace safety and readiness, and while there are overall opportunities with all clients, traditional spend levels will be down.”
That last comment is sobering, and its fruition will do its damnedest to alter forever the business-as-usual approach, but this might very well yield a positive—namely, a deeper concentration on the health and wellness category that had been trending upward before disaster struck.
“The promo world has changed, and with PPE products, our clients are expecting more from us than just branded merchandise and apparel,” Flambaum said. “Some of these items could help save lives or reduce the risk of spreading the virus. A T-shirt has never done that.”
Mandatory Modifications
Picking any sizeable number of suppliers and distributors and visiting their websites will make plain that the industry has adopted an all-hands-on-deck approach to keeping everything running as smoothly as possible. The early part of the spring proved especially crucial for promoting that message, and now that a new season is almost upon us, everyone is assessing to what degree losses are recoupable and what must now happen among the power players to move valiantly into the second half of the year. Much like the creative processes that characterized their pre-pandemic efforts, their present procedures are involving well-devised reads of what their markets are calling for, and are giving C-level individuals light-at-the-end-of-the-tunnel vibes.
“I think this crisis can strengthen supplier relationships with distributors, and we are continuing to see how important those alliances are as we navigate these uncharted waters,” said Steve Marder, CEO of Inkwell Global Marketing, Manalapan, N.J. “We are aware suppliers are under tremendous pressure at this time, and while we try to understand the stresses they are facing, we need to remain upfront and transparent with our clients.
“Honest distributor/supplier relationships are key at all times, but especially now while we work to meet our clients’ needs, which are evolving to suit the restrictions we are all facing,” he continued. “Inkwell’s model has traditionally been to work with a limited number of vendors and maintain strong long-term relationships. During this crisis, we have been introduced to a handful of new vendors who we are excited about.”
Regarding ties between suppliers and distributors, Headden and Dohan see big decisions ahead, with the former mentioning a “major paradigm shift in the pay-for-play relationship between them” and the latter noting that “being a supplier and giving 5-percent-plus rebates to your top customers will need to be put on hold if we are all indeed in this together.”
“There needs to be a path, sooner rather than later, to gatherings, meetings and some trade shows,” Dohan added. “A positive could be lessening of the increasing supplier budgets toward so many meetings and trade shows.”
Matters of Trust
Since nobody has a crystal ball, industry professionals must approach the coming months with a willingness to make difficult decisions and a few daring ones, too. While many people, including a few with whom Dohan has spoken, do not expect to see a recovery until 2021, others foresee beneficial news before January hits. Marder counts himself among those with a positive outlook, noting that Inkwell’s core promotional products business has started to pick up and will likely see its momentum furthered in the third and fourth quarters.
“I speak to my distributor peers regularly, and our universal sentiment is that promo products focused on staying healthy will continue to be popular,” he said. “Some products that lend themselves to branding, such as sanitizer and masks, will remain in high demand when things return to the new normal, and we are planning accordingly. I think most of the other specialized PPE products that we have been tasked to source for our clients will eventually go back to their traditional supply chain.”
Marder added that verticals such as professional services, finance, tech and education have seen comebacks within the industry and noted that while areas such as travel and hospitality, retail, media, sports and entertainment will likely take longer to rebound, they could also lead to more of what he dubbed “modern partnerships.” That term gives us more proof that anyone simply waiting for things to return to normal and not actively looking for new solutions will likely face a hard time making it beyond 2020. Headden mentioned that bigger orders will probably decline and that there will be a greater appreciation going to the ability to ship individual products to individual recipients.
“There’s so much to consider, but that’s what we’re in this business to do, isn’t it?” said Headden, whose revamped industry identity includes work with a supplier that’s doing great business through 3D pop-up cards that commend frontline workers and work-from-home employees. “I’m eager to follow everything, because I feel our collective entrepreneurial spirit will prevail.”
