Calendar year 2021 has been, to put it mildly, a seesaw year for the promotional products industry. In the first half of the year, we faced a COVID surge, traditional promotional products sales continued to lag, and mask sales still led the way. In the second half of the year, vaccines took hold and demand for traditional promotional products spiked mid-summer. As a result, we faced significant headwinds with lack of inventory, lack of labor and price increases for balance of 2021.
As we look forward into 2022, most experts predict that these headwinds will continue coupled with the latest COVID variants. But at Boundless we are seeing opportunities like never before in our 16-year history. The following signs from our customers make us very optimistic about 2022:
1. Investment in Employee Retention
Historically, the least profitable piece of business for an industry sales professional has been the company employee store. The primary reason? A lack of company investment, as employees typically had to spend their own money to purchase company branded merchandise. At Boundless we have seen a significant shift with the on-going labor shortage as companies are now focused on retaining and adding new employees. With that, we are seeing our clients make significant investments by providing employees generous financial allowance to be spent at their brand merchandise store. Additionally, we have seen an increase in the dollars spent on employee holiday gifting campaigns offering higher-end retail branded products that result in larger order size.
2. Return of In-Person Events
Considering there was virtually no in-person events taking place the first nine months of 2021, there really is only one direction to go and that is up. Despite the concerns of new COVID variants, we are seeing our clients planning to exhibit at trade shows, hold sales meetings, and conduct in-person employee events. As we return to such events, promotional products sales will surge.
3. Saturation of Digital Marketing
For years, we have seen marketing departments gauge success of their advertising campaigns by the number of clicks on a specific ad or email. The saturation of digital advertisements has created millions of blocked and unread emails creating diminishing returns. At Boundless, we have seen customers re-evaluate their marketing initiatives and incorporate promotional products as a complimentary piece to their digital advertising campaigns. Using promotional products as an incentive has allowed our clients to become more targeted and increase response rates. We see the combination of digital and promotional products accelerating in the years to come.
4. Less Competition
COVID has taken a toll on the promotional products industry with some traditional distributorships simply fading away and industry sales professionals partaking in the mass resignation. Those that have survived, invested the downturn and aggressively pursued new business are now thriving. At Boundless we have seen those sales professionals double or triple their business in 2021. This has occurred through aggressive prospecting but also the movement of buyers to different companies, creating new opportunities for 2022 and beyond.
5. Inflation
Contrary to most commentary, inflation can be good for industry sales professionals assuming demand for our services remains high. Although we have seen price increases, demand has also increased, creating higher average order size and larger gross profits. Does inflation at some point lessen demand? Yes, but we may be in a “Goldilocks” inflation scenario for much of 2022.
Like any industry salesperson, it is in our DNA to be optimistic going into a new year. That being said, the positive signs noted above could really make 2022 a special one!
