Key Takeaways
• Growing Market: The demand for labels in the U.S. is projected to reach $20.6 billion by 2025, growing at an annual rate of 3.3%. This indicates a significant opportunity for print and promotional product distributors.
• Healthcare Sector Potential: Labels are extensively used in the healthcare sector for various purposes, such as tracking procedures with barcodes. This sector already accounts for a substantial portion of promotional product sales, making it a prime target for cross-selling labels.
• Versatility and Repeat Business: Tags and labels are ubiquitous and essential across many industries, from basic shipping labels to product labels. Their widespread use and necessity lead to a high likelihood of repeat orders, providing a steady stream of business for distributors.
Tags and labels sometimes disappear into the ether. They’re not as attention-grabbing as a banner or a sign. They’re not handled as often as packaging or boxes. They serve a purpose, but they are plentiful.
Really, they’re everywhere, to the point where we take them for granted. We, meaning some of us in the print and promotional products industry, that is.
Still, to do so is to miss ample sales opportunities. The usefulness and ubiquity of tags and labels mean there’s an almost endless pool of potential customers for them – as well as the high likelihood of repeat orders. What’s more, the product category is growing.
In a presentation at the 2024 PRINTING United Expo on the label market, Cory Francer, an analyst with PRINTING United Alliance’s NAPCO Research, reported that U.S. demand for labels is expected to reach $20.6 billion by 2025, an annual-basis rise of 3.3%.
“Labels run the gamut, from basic blank shipping labels like thermal transfer types all the way through product labels that you put on a retail product,” says Phil Cantore, senior vice president of sales and marketing for Hygrade Business (asi/559028), which placed 14th on Print & Promo Marketing’s 2024 “Top Print Distributors” list, including No. 10 on the “Top Tags & Labels” section.
Top Prospects To Target
Cantore knows all about turning demand for tags and labels into sales. He and the team at Hygrade do considerable labels business with healthcare clients.
“If you’ve gone to any medical practice, you’ll see that they have sheets of labels that they print out, and they apply the labels to forms,” Cantore says. “We do integrated labels that are part of a form. They put barcodes on them; they’re used to track the different procedures and things that they need to track by using the barcode.”
Encouragingly, offering labels to healthcare clients could make a natural step for many print and promo distributors. Consider: ASI Research found that healthcare accounted for 10.4% of overall promotional products sales – the second-highest of all vertical markets at $2.7 billion in annual revenue. With so many clients in this sector already purchasing from distributors, why not cross-sell labels, too?
As it happens, the thermal labels Cantore was referencing – where the end-buyer prints information like shipping addresses or barcodes – is also popular at American Diversity (asi/120658), which ranked fifth on Print & Promo Marketing’s “Top Print Distributors” list for 2024.
“These labels can be produced using either direct thermal or thermal transfer materials, depending on the type of printer requirements,” says Amy Brown, vendor relations coordinator for American Diversity.
Brown says that this category of labels is popular with customers who ship products to their own customers or end-users. Put another way: There’s a sea full of buyers out there for thermal labels.
“Some examples of potential prospects would be manufacturing or distribution facilities, and the primary contacts would be in either the shipping department or purchasing,” Brown says.
The purchasing department for a manufacturer or similar business is where most distributors can start their tag and label sales process. While Cantore says that some distributors might wince at working with a manufacturing purchasing department, it’s a necessary step for this particular product. However, when dealing with smaller customers in other sectors, you can reach out to different decision-makers at the company.
“Obviously, if it’s more high-end and you’re calling on a winery and you want to sell them labels to put on their bottles, that’s a different approach because now you’re dealing with a smaller operation,” Cantore says. “You’re probably working with either the owner or one of the owners, or somebody in marketing that’s involved in the final presentation of the product.”
Advancements in Label Tech
Though stickers and labels themselves haven’t changed too much over their lifespans, there’s definitely been innovation as well as technological developments to note.
The implementation of RFID technology, which stands for Radio Frequency Identification, has become crucial as the world and print/promo marketplace become immersed in e-commerce – and as companies aim to track their inventory both in stores and across the globe.
To that point, Tony Heinl, president of Repacorp, ranked fifth on Print & Promo Marketing’s “Top Print Suppliers” list for 2024, says that big-box stores like Walmart are excellent customers for labels that use RFID technology. Demand for these pressure-sensitive tags has gone up “dramatically” in recent years, asserts Heinl.
“A lot of it is due to Walmart’s mandate that they want most of the items in their stores to have an item-level tag, so pretty much 90% of the products have an RFID label applied to them for inventory control,” Heinl says. “They really don’t want a separate label for RFID. They want the RFID label embedded into their print label so that whatever they put on their product, they want it in that.”
The issue for some printers, according to Heinl, is that their machinery isn’t capable of pulling that off. “They don’t have the equipment to do it all in-line, so there might be a two- or a three-step operation to try to get that done, where you print the label and then delaminate and insert the RFID chip,” Heinl says.
Heinl and his team have come up with an efficiency-driving solution. “We’ve added the equipment to be able to run four-color process labels and insert in-line at the time of manufacturing, so it’s all done at one time,” he explains. “Demand for the solution is accelerating dramatically. Again, there are not a lot of companies that can do it in a one-step process yet, and I would imagine you would appeal to a customer because you’re kind of a one-stop shop. You just get the product all there without much variable and headache.”
Expanding Opportunities for Print Labels
Kitting was a trend before the pandemic, but when everyone was home and receiving promotional gifts through the mail, the medium went through the roof. Brands suddenly saw the value of how a promotional product can tell one part of the story, but print products like packaging and inserts can tell the rest of it.
When it comes to kitting, items like tags complement the products and serve as necessary parts of the branding experience now.
Heinl says that in addition to department stores that need to track their inventory, smaller businesses are also looking for tags and labels to tack onto the products they sell, especially when shipping. He’s experienced the phenomenon personally.
“It’s amazing how many companies will now incorporate a small label within their shipment,” he says. “For instance, I buy stuff from this company called DX Engineering. Every shipment has multiple labels, such as their logo on labels in different shapes. I’m getting those all the time it seems.”
Heinl names the motorcycle industry as another big sender of branded tags and labels as an accompaniment to their primary products.
“My son rides dirt bikes, and it seems like everything I buy him related to that always has labels in the box with it,” Heinl says. “It would be perfect if you’re selling promotional products to say, ‘Hey, why don’t you incorporate a decal that’s specially shaped and cut to however you want it – with the lasers you can do that very inexpensively now – and put it in the box as you’re shipping out your product?’”
That sounds simple, and it is for someone who lives and breathes print like Heinl. For a distributor just getting started with tags and labels, it’s going to be crucial to work toward beefing up your knowledge to a similar level, doing your homework on how the sausage is made, so to speak.
“You really need to take the time to understand the product, and it could be complicated,” Cantore says. “You’ve got to know different materials and adhesives depending on where the product is going to be applied. Does it need to be in a freezer? Does it need to be in extreme temperatures? Does it need to be weatherproof? All of those sorts of things.”
Some issues are major and will come up naturally in sales conversations, but Cantore says that understanding the product as well as you can allows you to ask more informed questions about potential smaller issues, which can grow to be big headaches down the line.
“It’s a complicated product, and if you’re interested, the suppliers are out there,” he says. “They’re more than willing to help you understand what the applications are and what the specifications are that you need to know in order to sell knowledgably and effectively.”
