Trinket Talk

A little more than ten years ago when a major ASI supplier first introduced recycled products made from reclaimed rubber the industry collectively ignored the offerings.  Although the brand name was nationally recognized there was very little interest in the products and within three years the offering had vanished from the product line.  A couple of years ago recycled promotional items were again introduced into the mainstream corporate channel and almost instantly became a mega success.  Several issues have come together to create a perfect storm that is blunting sales.

First consumers and distributors were burned last year with horribly underestimated inventories.  With some manufacturers the Spring of 2008 saw entire lines back-ordered for the critical Earth Day celebrations.  Other products had serious quality control issues including melted buckles and inferior fabrics.  Distributors had to deal with both of these issues in unmet expectations on delivery or worse angry customers when the more expensive recycled products proved to be of lesser quality than their non-recycled counterparts.  Adding insult to injury some industry players such as Norwood suffered through inclement weather and flooding at some locations only making the problems worse.  Manufacturers rushed to address these issues and the lack of color choices for the 2009 season.

Which leads to the next problem - collapsing sales the result of the ongoing recession.  Everyone wants to promote eco friendly options but when budgets are severely cut customers are left with two choices, spend less money or spend no money at all.   Although there is nothing official yet released by the major suppliers a quick look at online inventories shows excess quantities and also demonstrated no shortages this year leading up to Earth Day.  This is partially the result of the economy but also directly reflects the increased costs associated with these products.  Recycled apparel has been a major dud by most accounts with end users not liking the feel of recycled shirts and fleece.  Taking a look at second quarter sales from suppliers there is an abundance of recycled and organic items which would again indicate an overstock situation.  Higher prices and the recession explain much of the decrease but an overall change in buyer behavior may be behind the shift.  It is too early to draw any conclusions but the 2010 “green” season will likely determine the fate of recycled promotional products in general. 

Manufacturers need to bring to market some sub $3 items in popular categories to help continue the shift to recycled items.  They also need to source some in the USA versus bringing them all in from overseas factories.  Given the state of the economy and particularly domestic factories United States sourcing would help sell recycled items.

Broder Bros.appears to have dodged bankruptcy.  Although there is no official word as of tonight it would seem they secured the needed percentages to prevent their filing.  This is good news for the industry as the recent filing of Norwood already had the industry on edge.  Changes are already underway at Broder with Columbia being dumped from the product offering.  Once they sell through the remaining inventory it will be the first time in decades that Columbia has no presence in the industry.  Meanwhile Callaway has landed at Perry Ellis.  Once Ashworth officially exited the business Callaway was left orphaned until the announcement was made last week.

We do have an update to the Major Retailer Provides Lessons in Poor Customer Service but will update that story Monday morning.  Suffice to say the demonstration is ongoing.

The economy is struggling and retailers are closing all across the country.  The cost of acquiring a new customer continues to exponentially increase as retailers fight the battle of not only getting customers to choose their stores but to shop at all.  Despite this one major retailer has demonstrated how not to provide customer service and how to lose a customer for life.

First a quick detour as we discuss some new custom coolers.  There are many ways to keep your food and drinks cold.  Some choose portable mechanisms such as the Gemline Party To Go Cooler which provides for storage of up to 32 cans.  With a mega 16″ opening even the largest of bottles or containers will fit easily.  The less bulky Life In Motion Collapsible Cooler is also heat sealed and has a front zippered pocket.  With a top grab handle and sporting PEVA lining it is a safe alternative to less expensive and less safe coolers promoted by some organizations.   The limited size of the cooler will make it less popular with the beach crowd which is where the Life in Motion Cooler comes into play.  With a huge 36 can capacity it can also hold about any size container.  It is also useful in carrying bottles and has an attached metal bottle opener.   When in doubt by a PEVA cooler as they do not contain PVC which requires the use of environmentally dangerous materials in production.

Equally dangerous is trusting a major retailer.  Sears sells all manner and types of appliances including refrigerators.  The recent purchase and subsequent disaster is a perfect case study in how not to conduct the servicing of a client.  As an example a fridge is purchased for $170 and lasts exactly three months before the compressor fails.  Under warranty for one year as part of the stores premium brand name the refrigerator is repaired.  In order to facilitate the repair a technician is first sent to the location.  A normal service call from the same company runs at least $125.  The technician determines a compressor is needed.  The cost of shipping the failed part and installing it runs over $300 per the slip.  The part is installed and the refrigerator works for another month before failing under the same circumstances.  Another service call is made at presumably a similar cost and another compressor is sent this time overnight.  Compressors weigh a substantial amount so this was not an inexpensive shipment.  The servicing technician determines the compressor is fine and instead believes another part has failed which is replaced.  Total cost to date of repairs in terms of shipping and labor totals over $700 per the slips provide by the servicing firm.  Customers suggestion that the refrigerator be replaced after the first failure are ignored.   The customer believes there is no justification in repeatedly repairing a refrigerator that costs the store less than $150.  After the second repair the refrigerators lasts approximately three days before failing yet again under the same circumstances.  The local store realizes how fruitless the situation is and agrees to replace the item with the identical model.   The customer has no problems with the identical model but new refrigerator.  Total cost to the retailer is over $700 and in the end they ended up replacing the item and taking a dead loss of $150.  But they also lost the customer for life but did manage to acquire enough bad will to steer dozens of customers away from the store for years to come.  Somewhere along the line executives need to use some common sense and realize the costs of fixing an item repeatedly both in terms of loss of goodwill and hard costs far exceeds the costs of replacing an item and appeasing a customer.   As the economy continues to contract retailers of all types are sharpening their pencils.  The above example illustrates how an over zealous pencil pusher can inadvertently cost a company dearly down the road.  Once a legitimate problem is identified and repeated attempts to resolve an issue have failed sellers need to find and provide alternative resolutions.  As the saying goes in this case this particular retailer won the battle but lost the war.  They held their ground and may have won the battle initially on getting an item replaced but lost the war in the end as not only did they end up replacing the item but all faith is lost in the business.

You can follow updates to this blog on our twitter page as well as reading previous articles such as Green Promos in time for Earth Day.

During times of strong economic growth the often insidiousexpenditure associated with providing samples for customers gets overlooked.  Across many industries the general policy of the early part of this century was to ship first and ask questions later.  Entire internet communities sprung up to take advantage of these freebies and in many cases exploit the goodwill of stores that offered these niceties under the guise of potential future business.  The end result is a growing list of online stores that no longer offer free samples because after careful analysis they realized it was a tremendous cost with little return.  

An item such as the Quest Wheeled Cooler will run between twenty and thirty dollars depending on the distributor offering the product.  The cooler is huge and will ship by what UPS calls dimensional weight.  That means the cost of shipping will end up somewhere on the higher side of $30.  Any vendor that ships this item without restriction would need to sell 7 to 10 of the same item just to break even on the one given away.  Now repeat that by dozens of products a day and you get the picture the true cost of free samples is higher prices.   A year ago online distributors advertised their very generous sample programs as a bullet point for doing business with them.  As the recession deepened those policies have become much more restrictive.  An increasing number now require a deposit that is credited to a future order within a set time frame.  Otherwise the customer is charged for the item and shipping which seems very reasonable.   A quick look at many of the top retailers this evening shows no evidence that those sample policies are still in place. 

We talked recently about building custom promotional packages for success in a downturn.   With the news now dominated by the spread of a potential pandemic consumers and businesses are rushing to find sanitation products.   Bundling opportunities now exist in this area and the wise distributor would begin to combine inexpensive cleaning solutions with higher priced packages.   As we highlighted earlier in safety goes mainstream in ad specialties there is a growing focus on product safety.

One of the largest growing segments in the trinkets industry in the last twelve months has been the gift set.  What manufacturers have figured out is that customers and distributors are constantly struggling to put together packages of items sourced from widely varied sources.  By pulling these all in house and offering one concrete package economies of scale can be realized in terms of reducing shipping and often product costs.  Unfortunately though manufacturers offerings tend to go stale very quickly and in fact many are stale from the very beginning. 

But that does not mean you cannot create your own packages to keep your customers from straying.  Take for example a package that would be geared towards spring and summer marketing events.  Many consultants would simply suggest a cooler or similar item.  Why not put together your own custom package featuring some popular items?  The Front Pocket Koozie Kooler has been a mainstay of the lunch sack market for several years since it was first introduced.  By itself it makes a great gift by why stop at that point?  Instead combine that item with the Koozie King Kooler and you have one imprinted bag that can be carried inside of another.  I have even heard of customers buying multiple smaller items to fit inside of the single larger item but make sure you properly measure and that the promised package fits.  Offering a discount on the combination is a great way to keep potential customers in house.  Another example may be combining the ever popular and summer mainstay the Zip-Up Bottle Koozie Kooler with another popular item.  That may be a cooler if the budget is more limited or a custom bottle of one type or another.  But why not combine the koozie with a Captain’s Chair and provide the customer with an end to end solution?  Rather than opting for expensive additional imprint locations on the chair have your client use that money towards an entirely independent item.  There are endless combinations above and beyond the traditional pen with pad and bottle with cooler and you do not have to wait for the manufacturer to provide the incentive.  Plus by self branding your own packages you have something others do not.

We received countless questions surrounding our piece on What Plastic Resin Codes Mean and as a result we intend to illustrate the differences in products in an upcoming article.  By this we mean we will take imagery of several different promotional pieces to demonstrate how some manufacturers continue to lead by example in terms of recycled and recyclable while others not so much.  Pay particular attention to the packaging materials your goods are shipping in as recently we ordered recycled goods that shipped in 100% new cardboard.  This seemed counter intuitive to us but undoubtedly it was less expensive for the manufacturer.  So far it has been unfortunate that some of the larger retail brands that are crossing into the corporate markets are still not shipping in an earth friendly manner.   Hopefully with continued pressure from customers and distributors that can begin to change.

I hear this question asked all the time, what do plastic resin codes mean that I see on the bottom of a plastic bottle?  Every single plastic bottle you see in your day to day life will have a resin code stamped on the bottom which will tell you whether or not a product can be recycled or not.  A growing number of plastic promotional products will also have a resin code stamped on them if the manufacturer is paying attention to consumer demand.  Keep in mind plastic is not like aluminum or glass that can be repeatedly recycled back into the same product.  Plastic is down-cycled rather than recycled.  A plastic water bottle probably will not be reused for that same purpose again but may instead be used to make a recycled tote bag.

The degree to which a plastic can be recycled is determined by both the properties of the plastic itself and by the market for the recycled plastic.  Some plastics just do not hold up to repeated reuse and have a limited value.  Others can be recycled but there is not much of a market for them so they are less popular.  Rather than leaving this determination up to somebody at a landfill or recycling center the industry developed the resin codes that you will see in the triangle stamped on your product. 

Starting with the most prominent, the “1″ PETE stands for Polyethylene Terephthalate or PET/PETE for short.  It is one of the most widely used polymers in the world today and one that you will see in a majority of your plastic water bottles.  The bottle of SmartWater I am drinking from Glaceau is a perfect example as is just about any other water bottle from Poland Spring, Aquafina and all the other brands.  Although PET cannot be reused to make future water bottles it is used and sought after in the making of fleece apparel, luggage, carpet, tote bags and other fibers.  In short if it has a “1″ on the bottom make sure you recycle it as it will be reused.

The “2″ is HDPE or High Density Polyethylene is the second most commonly used plastic in water bottles.  It is significantly stiffer than PET and is therefore used in tougher containers such as laundry detergents, milk bottles such as Lactaid and other bottles requiring strength such as oil containers.  HDPE is highly recycled and can be turned back into plastic lumber that you will use on your deck, pens, benches, doghouses, floor tile and even your mailbox post.  A trip through any home store will show dozens of mailboxes most of which are made from recycled HDPE.  If your plastic product has a 2 stamped on the bottom make sure you put it in the recycling bin as it will be reused.

Resin code 3 stands for PVC or Polyvinyl Chloride.  The white pipes under your sink are made from PVC and it has the extraordinary property of resisting both fire and water.  You will see it used to make raincoats, shower curtains, water pipes and other rugged products.  It is very rarely used now in water bottles.  You will see it used in coolers although due to the nature of the material you will not often see it used for potable water or food products.  PVC is easily recycled into products such as garden hoses, gutters, decking and other lumber products.  Although you will rarely see it outside of interior piping it should be recycled if you do find it.  Most people do not realize the discarded and short/extra pieces of pipe from a home renovation are easily recycled.  Cut them in small pieces with a hand saw and bring them to your local recycling center.

Resin Code 4 or LDPE is something you come in contact with almost every day but have no idea it actually exists.  LDPE is transparent and flexible and is most often used in bread packaging, frozen food bags, your container of mustard or ketchup, dry cleaning bags and in some cases carpeting.  LDPE is recycled frequently into landscaping ties that replace traditional oil soaked wood ties, plastic shipping envelopes, garbage bags and other similar items.  Most people do not realize plastic bread bags can be recycled.  Check with your local facility or better yet stuff the bread bags along with the frozen food bags inside “4″ items like mustard bottles.

Type 5 or PP is most often being used now in dishwasher safe products.  It has an extreme resistance to heat and also resists chemicals.  Because of the resistance to heat it is also often seen in the medical field where heat is needed to sterilize equipment.  PolyPropylene has become incredibly popular in the promotional products industry and is often referred to simply as PolyPro.  You will see it used in totes and padfolios most often.  Around your home you will see it used for indoor outdoor carpeting since it cannot absorb water.  Your local miniature golf course will likely have a green putting rug made of this material.  PolyPropylene is often the end product of PET products being recycled and likewise can be recycled into less rugged items such as brushes, ice scrapers, tooth brushes and even flashlights.  Every recycling center will take “5″ products.

“6″ or PS for Polystyrene is used in television casings, computer monitors, toys, the interior plastic molded parts of your car and of course regular foam insulation and packaging commonly referred to as styrofoam (not to be confused with the branded product from Dow Chemical).  The foam packaging you see in anything you receive in the mail will be made of Polystyrene and is recyclable.  Plastic utensils, yogurt containers and most of your medicine bottles are made from PS and all should be recycled.  Plastic peanuts are made from polystyrene and are usually directly recycled.  Don’t throw the out bring them to your local recycling center or visit the Polystyrene Packaging Council for more information.

Resin Code 7 is reserved for all other plastic products and is not often seen especially in our daily lives. 

The plastic water bottle you drank from and recycled a year ago may now be the keyboard you are typing on or the tote bag you use to carry your laptop in each day.  The oil container you recycled a few years ago may be your hairbrush and the plastic milk jug you recycled may now be part of your landscaping.  Essentially all plastics can be recycled and despite the economic downturn hurting the market for recycled products the innovations continue.  The more we recycle, and the more we purchase recycled products the better they will become.   A few years ago the promotional products made from recycled materials were plainly hideous.  Now many are as attractive as the first generation products.  Over time the prices should continue to drop as demand increases and technological improvements are made to the recycling process.  The results of years of recycling are now being witnessed as products come to the market.  In fact the items discussed in Retail Brands Crossing Over to Corporate Channels and Green Promos in Time for Earth Day are made from previously recycled plastics.  Other items discussed in Safety Goes Mainstream in Ad Specialties are 100% recyclable.  All of the items discussed in previous entries have resin codes attached.

The number of retail brands crossing into the the corporate channels continues to accelerate.  However the number of retail brands pulling out of the corporate markets is also on an upswing as failed launch after failed launch continues to doom otherwise successful companies.

Ping made a splash a few years ago when they decided to sell their popular apparel line in the corporate markets.  In choosing Sanmar as their main supplier for the industry they choose a business with a long standing reputation within the market.  By going with a top 5 ASI Supplier they essentially guaranteed maximum exposure and a deep network of sales and marketing reps.  There appeared to be tremendous upside but sales lagged and it was announced earlier in 2009 that Ping would be leaving the corporate market entirely.  One of the problems encountered stemmed from the need of Ping and subsequently Sanmar to strictly enforce prices in order to protect the retail golf network.  Those efforts are never popular with distributors and in the end the outcome was predictable.

Other moves into the market have been more successful.  Scripto partnered with top 5 supplier Leeds in 2009 to release a line of branded writing tablets and low priced budget pens.  Although sales have reportedly been going strong the potential cannibalization of existing product lines will be a going concern.   For instance the Scripto Jr. Journal Bundle Set is available with a decorated pen for far less than the cost of just a journal from many other vendors.  The problem may be that it is also much less than similar items within the same brand.  Where they may hit it out of the park is with items like the Scripto Constitute Click which is an ergo pen with large grip similar to much higher priced retail competition for significantly less.  For those looking for ergonomic pens the Scripto Scroll Click has the “pro grip” which mimics what is available from retail brands.  The idea behind the pro grip is comfort and style.  It is also an accent point on the pen which at this price is expected to compete directly against products from Bic and Sandfords Papermate line.  Other brands have been folded into the main lines and the result is products such as the Bamboo USB Flash Drive 1GB which are among the many products available in time for Earth Day.

It has not all been a success for Leeds.  Last year to much fanfare they released the Karim Rashid line of products.  This year they are down to just two and opted to not expand the line at all.  Although the brand has some distinction in the retail channel it failed to carry over into the corporate markets and fell flat.

It finally appears that the trend towards environmentally friendly promotional products has taken firm hold in the promotional products industry.  With the release of so many promo products from brands like Sweda and Norwood that are without a doubt eco-friendly the last remaining hurdles involved lead and BPA.

The threat from BPA is still debated but consumers had already decided they did not want products with BPA and sales of BPA containing items fell through the floor in 2008.  As a result many suppliers began producing goods for release in 2009 that were “BPA Free” and these goods are now readily available.  The question of whether BPA is safe or not is no longer relevant as BPA free alternatives such as the Excursion BPA Free Sport Bottle are easily to find and affordable.  Most of these bottles are made from a type of rigid plastic but several are now arriving that have been developed by a division of Eastman.  These materials are virtually indestructible.  The Paradise Sport Bottle is one of the bottles made from the newer materials and was combined with a neat contoured handle to make it easy to carry.  PromoManagers has released dozens of BPA Free Sport Bottles and most are available at discounted shipping.  Custom Stainless Steel Drinkware is almost always BPA free as well but you do have to watch the interior liners.  Luckily almost all the products currently in the channel are free of the chemical.

Next up will be guarantees that items are without lead.  This started to happen last year but most distributors quickly pulled any such verbiage as it is impossible at this stage to be absolutely sure and providing a false sense of security can be harmful.  The best advice we can give is treat all products with care and keep any shiny metal type trinkets away from young kids mouths.  If kids do play with them make sure their hands are thoroughly cleaned afterwards.

Tomorrow we will be discussing the dangers in printing ink used in many products and what can be done to mnimize the risk.  Check out our earlier article on Green Promos in Time for Earth Day.

I am a huge fan of environmentally friendly promotional items.  I am also a fan of socially friendly items that only come from areas and manufacturers who take the time to check on the quality and also verify the products are being made in a socially acceptable facility.  All too often products are coming from factories half a world away with little concern for product and labor safety. 

Just in time for April comes the release of several recycled promotional items that actually have great looks and are built off of previously successful models.  The Recycled Cotton Expo Tote features strong handles and is made from recycled cotton.  Built off of the hit Expo model this tote has a large carrying capacity and can double as a shopping bag.  The Recycled Cotton Zippered Tote keeps true to the namesake by having a solid and smooth zipper and enormous storage capacity.  What I like about this tote is that you can use the multi color imprint method from Gem that keeps costs down over traditional multiple color imprint methods.  With the constant barrage of commercials today from the major shopping chains promoting reusable shopping bags there has been great demand for products such as the Recycled Cotton Market Bag which has 22″ handles that can be used over the shoulder or as a traditional arm carrying.   For those looking for a little more color in a tote the Accent Tote provides several exciting colors and multiple decoration locations.  There is even the opportunity to decorate with embroidery which is somewhat rare in the lower price range.

The economy continues to stumble with no clear sign of a recovery in sight.  The markets took a beating today due to continued fear about the automobile industry and the potential for eventual failure.  Combined with poor data from around the World the equity markets slumped over three percent.  There is little hope for an immediate recovery but the idea continues to be promoted of a recovery in the second half of 2009.  Although this seems somewhat plausible one has to keep in mind the millions of jobs lost and the jobs we continue to shed each week.  With home prices continuing to coast down and with so many out of work the drag on the economy will continue to be severe.  Efforts to promote the economy and spending will include tax breaks on car purchases, overall tax breaks and even home purchase rebates.  The problem ultimately is that with so much of the world suffering through difficult economic times there is little hope for meaningful recovery soon.  As I discussed in Marketing Your Way Through A Recession the best course of action for many will be to continue to aggressively market their businesses in these tough times.

Recessions can provide a unique opportunity to build your business and market share but requires a level of planning and patience.  Under most theories economic slowdowns require rapid and measured budget cutbacks.  However these actions are contrary to what you would need to do in order to grow your business and proportional market share.

Instead consider expanding your promotional and marketing budgets during downturns such as the one we are in currently.   Your competitors are probably cutting back and spending less money while cutting staff.  Pick up any newspaper and it is full of stories involving cancelled trade shows, conventions and other corporate retreats.  In some cases it’s necessitated by a business in jeopardy of failing but in other cases it is the result of over compensation to perceived market conditions.  If finances allow these periods can be full of opportunity for your business as you fill a void being left by your competition.   While they are spending less to keep and capture new clients any dollars you spend will go further and have less direct marketing competition on the other end.

The American Marketing Association has a multitude of information on their site as do groups such as the Direct Marketing Association for those looking for general marketing information.   If you are looking for promotional product information PPAI is a great place to start.  Taking it a step further there are various vendor websites end users can browse such as Sweda and sites such as Ashworth.   Most of these manufacturers are prohibited by agreement from selling to direct end users and instead use a network of local distributors which you can generally find by browsing their sites.

Take the opportunity as it presents itself and get a head start on the recovery.  Most of the recent economic data points to the economy now being in the trough and showing the beginning stages of recovery.  Now is the time to increase your marketing efforts and make new contacts.

Not every economic downturn is created the same.  This one is global and is occurring at the same time which has major ramifications for all industries.  It is also the best time to gain market share for those willing to double or triple their efforts.

Take for example big box retailers like Costco and Walmart who are both still enjoying solid success despite the current climate.  They have done this through a concerted marketing effort and accompanying message of low prices.   By now everyone knows the bouncing yellow smiley face and many of you probably remember the cowboy version of the smiley face slashing prices.  Walmart positioned itself properly going back several years during the good times.  Back then lower prices didn’t seem all that important as the economy was booming and people were flocking to stores like Target which was perceived as having a higher value. 

Fast forward twenty four months to today.  Target has announced major changes to both store expansion and to the credit portfolio their bank holds.  They are tightening credit standards, lowering and eliminating limits all the while they are trying to get the message out that they are now the low price leader.  A few years back they prospered being portrayed as the higher end retailer and they are now left scrambling to make customers understand they too are price competitive.  

Costco is another interesting case.  By providing massive amounts of goods at reasonable prices they have done very well and in many respects have been recession proof.  Instead of promoting low prices they instead have promoted maximum value which was done by selling large blocks of goods at bulk prices.  Whether or not the bargains are really there is still up to the consumer to decide which to this point they have by continuing to spend money in the stores. 

These are two dramatically different approaches but they illustrated the importance of picking a message and sticking with it.  Both brands have flourished and continue to prosper during difficult economic times by having a multi-year coherent message.  The economy is going to have some historic lows and will continue to be extremely volatile over the next two years.  Use this time to build your brand message and brand loyalty.