PPAI’s annual industry sales numbers are out, and the results are encouraging. In a press release yesterday, PPAI reported that promotional products industry sales for 2017 increased 9.31 percent, totaling $23.3 billion. That’s the highest sales volume in 18 years. To compare, the industry saw a sales increase of only 2.4 percent in 2016.
PPAI attributed to the increased growth to two main factors: online sales and sales of products from non-industry providers.
Those non-industry providers accounted for about $3.4 billion in product sales. That’s 14 percent of the total dollar volume, according to PPAI. These are the companies that sometimes might be perceived as boogeymen or potential disrupters of the industry, like Walmart, CafePress and CustomInk. The total sales from these non-industry providers increased 20 percent from 2016.
The importance of online sales is also no big surprise. The prevalence of e-commerce and online integration has been going on for decades, and will only increase as smartphone usage and capabilities grow, too. Online sales accounted for 23.2 percent of the year’s total sales volume, about 4 percent over 2016. Total online sales increased by 28.1 percent, reaching $5.3 billion.
PPAI obtained this information by surveying 23,564 distributor companies, and has been collecting this sort of data since 1965.
So, what does this mean for the industry? Overall, this is good. The key takeaway is that online sales are only going to continue to increase, so if companies haven’t fully adapted to the technological side of doing business, it could be holding them back from larger sales.
One thing to watch: Despite being dramatically fewer in number, companies outside of the industry did account for a significant portion of total sales and grew an astounding 20 percent. Still, they make up just 14 percent of total industry sales, leaving 86 percent of the market available to distributors. That’s a much more reassuring number. But, it’s still worth keeping an eye on these outsiders, especially as companies like Amazon increase their presence in this space.
