Will Holiday Buying Take Place in the Corporate Markets?
The great debate continues to rage on whether or not the promotional products industry will see the normal holiday buying. Last year was fairly robust with buying at levels not seen since the last good year of 2006. The traditional holiday bump would often equate to almost twenty percent of annual sales for many distributors. With growth what it was earlier in the year there were strong hopes that it would continue into the fall. Unfortunately it seems to be heading the other way with most suppliers reporting slowdowns beginning in October.
So what has happened? It is probably a culmination of things with first and foremost there being a major drop in economic activity. The stimulus has totally run the course now and that money has flowed through the economy. Second it is likely partly due to over worked staff not having the time for non-essential activities. Let's face it buying promotional items is not the first and most important task of a lot of these businesses. There are roughly eight million fewer workers out there now than a few years ago and that's a lot fewer workers to buy your products. About the best thing you can do is put new products in front of customers. A month ago we were handed a Latitudes Foldaway Shopper Tote when we were attending a show for business managers in New York City. The logo of the company was placed on the outside of the bag. There were two inner bags, each was stuffed with another item. In one was a blanket tote, in the other a box of chocolates. I know Gemline doesn't make food so this was obviously a well thought out promotion where they sourced from several different manufacturers. They brought 500 totes to the convention, they were gone in two hours. That is a pretty incredible return rate and one that was most impressive for this business climate.
Why was the tote so popular? Gemline has a great brand name but that likely had little to do with it. Instead it was a gift that customers could appreciate it and one that they can use outside of their professional lives. A foldable and reusable tote is eco-friendly which is important and that also makes it much easier to store them when not in use. To this day promotional products totes remain one of the most popular categories and are still a big seller even around the holidays. Consider combining your tote purchase with another item such as a box of chocolates or even a wine opener. Just be certain that whatever you send is packaged properly so it does not get damaged.
Pack on Back A New Spin For Old Products
The first backpack made an appearance in the promotional products market about two decades ago. It was primitive by todays standards with weak straps, thin construction and bulky. That was the major trend for a decade as manufacturers focused on more popular niches like portfolios and clothing. It took the sports craze of the last decade to really get things flying in the right direction. Now backpacks and totes are a prominent part of almost any marketing effort.
We had a new focus arise as air travel became more difficult and that was airline safety. Last year there was a rush to airport safe bags but there was quickly a marketing problem. Just because the backpack is TSA friendly that does not mean you will fly through checkout. It is up to the person that works for the TSA. So we are seeing manufacturers change the classification of new bags. When the new High Sierra Outbound Deluxe Compu-Case hit the market last week the terminology is gone with regards to checkpoint status. There is no word yet that is conclusive but it seems this is because complaints were coming in when people were getting stuck in long lines. So what have they done with the new version? It is instead classified as conforming to the required standards while all the other features are thoroughly listed. The High Sierra quality is highlighted and the new features they have added like the cushion zone padded compartment which means a laptop can be dropped from a low height and still be okay.
The biggest problem this year with these backpacks wasn't issues at the airport. The problem facing distributors was lack of inventory. The factory that produces High Sierra bags was way behind and the shipping containers east from Asia were jammed. For months there were no product available even when the item had just been released. These new backpacks appear to have plenty of inventory but that could change quickly. All High Sierra Backpacks are produced in the same factory that ship to the corporate market. They are well built, rugged and puncture resistant. They all have durable padding on the shoulder straps and often on the regular carry straps. They all have the signature High Sierra branding on the bags. The only complaint we have ever heard is that the zippers could be heavier duty but that is likely not a problem with the zipper but instead too much weight being put inside the packs.
The promotional products industry is not seeing the normal holiday bumps. Most vendors report sales are flat when compared to previous months. Gone is the larger 5-15% sales increase that came with the holidays. Some feel it is just delayed, most believe it's not coming this year.
Bright Lights Good Business Big City
Next week marks the traditional beginning to the corporate gift buying season. There are several directions purchasing agents will go this time of year with one being the tired old items, the other new and functional items that will be used by the original recipient and others. With the downturn in the economy a couple of years ago one of the most immediate changes was to corporate gift buying. Higher end brands fell out of favor as the banking industry crumbled in favor of more reasonable gifts.
This is where we are today with the focus being on multi-purpose marketing efforts. Instead of giving a luxury brand buyers are encouraged to give out middle tier items that can be regarded as having a purpose. That can be said for the Icarus LED Flashlight which has all of the key requirements, it can be used in the home or around the office and comes neatly packaged. It can be used for personal safety reasons or in the event of an emergency or disaster and can still be given away at a trade-show or event. With the price in the middle of the spectrum it would not carry the same "how much did they spend on this" question that would surround some leading national brands. In short it hits the sweet spot without going over the top. The last thing anyone wants to do with such high unemployment and tighter budgets is to give the perception that they are insensitive to the plight of many.
We talked about giving flashlights as gifts in an earlier piece. It really has become one of the number on items over the last few seasons and we expect that to continue in the weeks and months ahead. Unlike last fall there is plenty of stock so with any luck inventory issues will not arise as they did last November. The slowing economy should also help in that regard.
We did suffer an outage over the past weekend. It was related to a problem with the DNS servers and it raised some interesting security issues that have since been resolved. We all appreciate your patience.
No Clearer Path than Illuminating Your Brand
As the days get shorter and we all begin to gather our candy for the end of the month we also get ready to turn the calendar to November. Soon many of us will be heading home in the dark and combined with the approach of the corporate gift giving season we find flashlights once again will take center stage. Luckily each year the offerings more closely match what you would see in your local hardware store and this year the focus is on versatility and safety.
Several years ago Garrity became part of the Duracell brand. They had been in the corporate markets for several years and quickly recognized a unique value opportunity while preserving their brand name. Along came Leeds which acquired the rights and now the Garrity Zoomed LED Flashlight is available to those looking to put a logo on an aluminum light. To clearly understand the zoom feature you have to look at the light itself. The entire lens portion twists from right to left which focuses the beam more intensely. Garrity has included a printed indicator which makes it easier to keep the light at a reasonable level. At this point a couple of years ago when the economy was booming plastic flashlights cost just as much as this light does and it includes the logo, batteries and aircraft grade aluminum that has made another brand so popular. Usually the batteries are not inserted prior to shipping and this continues to raise some concerns with clients as they don't understand the potential for damage in shipping. Founded in 1967, Garrity Flashlights have been around now for over forty years. The brand is well recognized and still available at hardware stores nationwide.
American Apparel has dodged going out of business and in addition to raising much needed capital they have also brought in new management. It seems 60 minutes may have missed the mark a few years ago in glorifying the actions of the company founder. The company enjoyed strong sales growth yet was still in a very difficult situation largely thanks to the actions of the CEO. They are a dominant player in the industry and it is great to see that they are going to continue as an operating business. They will continue to face strong competition from Sanmar as we discussed in Keys to Jacket Success but they largely target different markets and can co-exist in the same space.
Extending Functionality While Getting Your Message Out
Although some of the financial news over the last few weeks has been positive that is in the corporate arena. The average consumer is still struggling through high unemployment, stagnant wages and several years of living through a recession. Giving away corporate gifts with too much flare and that can potentially be viewed as trinkets is no longer popular. Instead take a look at functional employee gift ideas.
The entire point of the new late season line from Leed's was to encourage this type of giving. The Leeds Cook-Safe Cutting Board Set with your logo accomplishes this goal by providing the recipient a food grade quality present. Each board is FDA compliant and color coded to prevent cross contamination while making a meal. The front of the stand has a color coded label which allows the chef to keep raw foods away from cooked foods, meats away from vegetables permanently which can increase overall food safety. No printing is done on the boards but instead the stand is decorated which is unobtrusive and looks good sitting on a kitchen counter. Although cheese and knife sets continue to be popular you do have the concern of giving sharp objects to a mixed audience, this set is safe for any age bracket or user base.
But what if your intended target is not of cooking age? The popular gift right now among school age students has to do with silicone bands and cool shapes. Take advantage of that with the Leeds Silicone Bracelet USB Flash Drive 1GB with your logo imprinted. The silicone is flexible, is available in a bunch of attractive colors and looks a lot like the bands kids are actively trading. This means it is likely to be widely accepted in schools especially the middle school through college levels. Your logo, school group or team name gets imprinted in bold colors on the bracelet and meanwhile you have a gigabyte of storage space to carry your homework, office presentations or payroll information back and forth from work or school. Better yet take a look at branding one of these drives for Breast Cancer Awareness Month as they are available in pink.
Whatever way you choose to go this buying season keep in mind a lot of people are struggling and by giving a custom promotional gift this holiday season you can also help those in need. As strange as it sounds by providing a functional gift you are filling a need, reducing the expense to the recipient and in turn getting some advertising in the form of your printed logo. If you pick the right item you may find demand is significant and referrals and re-orders will take off. We will introduce some other items online this week.
Functionality Essential to Stationary Success in Technology
For years ASI and PPAI suppliers have released tired old designs in terms of padfolio and portfolios. No matter how many ways you adjust the layout or change the underlying material a simple paper carrying padfolio is not exciting nor is it unique in any way. This year and with the introduction of one of the most popular technology devices in the ebook type readers manufacturers are stepping up and delivering flexibile and functional gifts just in time for the holiday season.
Polyconcepts has left Bullet Line dragging in the dust with no new apparent releases late season. Their larger line Leed's has come out with an entirely new catalog for September featuring the Elleven Zippered Padfolio which breaks from tradition in offering not only the regular writing padfolio but has included a soon to be patented techtrap storage. Instead of trying to conform to a particular device the mesh scuba elastic bands allow the end user to put the latest book readers including the iPad and Kindle as well as phones and even small netbooks. Keep in mind there is no padding as you would see with a backpack or computer bag but this is after all a regular writing pad. The dobby material is also different and the large decoration area on the front provides plenty of options. Most customers will elect to go with the debossing as it looks better and for whatever reason only single color imprint is allowed by the manufacturer.
The new Elleven line will eventually expand to just under a dozen pieces. Right now they are focusing on maintaining plenty of inventory to feed hungry distributors as we head into one of the busiest seasons of the year. Although they appear to have missed the mark with a few items such as the technology organizer that cannot hold the newer tech gadgets they have done a good job overall and we expect to review more items in the near future.
Irritation from Comfort Colors – Dye Allergy
Back a few months ago I ordered a bunch of t shirts for an upcoming promotion we were having in June. The shirts arrived and looked great. I took about four or five of them for personal use and proceeded to wash them in cold water. Within two minutes of turning on the machine the tub basin was filled with a mix of inks. Three months later and perhaps twenty wash cycles later I still cannot wear the shirts as they irritate my skin terribly.
What I never fully understood until doing some research is how dangerous some of the chemicals used in coloring textiles may be to humans. Acetamide which is used in some acid dyes was recently added to the California EPA list of compounds known to cause cancer or reproductive toxicity. Another chemical used in some dyes is Nitrobenzene which is highly toxic and easily absorbed through the skin. These are all constituents of some of the harsher dyes but even the more simple dyes can be irritating especially if they are not done properly.
In the case of the comfort colors shirts I bought to this day they stink. By that I mean they smell bad. Compared to the exact same style and color shirts purchased last year there is a permanent odor and texture to the shirts that is downright uncomfortable. The minute they come out of the cabinet you can smell them and note the difference. It's a chemical smell and one that immediately irritates skin and I have never had any sensitivity to shirt dyes. What is probably most disturbing is that it is near impossible to get a listing of what brands use which dyes in their products. The long and short of the story is when purchasing a new shirt product you may want to go ahead and order a single sample first. Five months later I still cannot wear the shirts I picked up earlier in the year at all and they are soon going to the landfill for donation to those in the need. I have no idea what dyes are used in the Comfort Colors line but I do intend to ask as this is a socially and environmentally responsible company.
Alarmingly it is impossible to find much information on dyes. In order to gather even this limited information I had to search a bunch of different sites and piece the information together. I have sent emails to the major shirt manufacturers and plan to update with a new article as soon as I hear back from them all. I do also wonder if this dovetails with the ASI inventory problems article I wrote last night. Could quick production be to blame?
Supplier Product Line Expansion Magnifies Inventory Problems
By now just about everyone is aware of the major stock issues present in the promotional products industry this year. It has gotten so bad that in many cases products that were released in January have never been available to the majority of the distributors in the industry. Leed's as one of the dominant suppliers has had entire segments out of stock at one time or another and the news does not appear to be improving with their new fall catalog.
A recent article in ASI places the blame on many issues external to the actual suppliers. That is fine but how can it be that the 62" Tour Golf Umbrella which just became available six days ago is already back ordered into October? Truth be told the moment it went live on the manufacturers site is was already unavailable which much like the fiasco from earlier in the year probably indicates the item was never ordered in sufficient quantities to be available to the entire market. The other alternative is that they never should have put this umbrella in their fall line as it was not available in the first place. This is the same syndrome that we all went through last year and again this year with items like the laptop bags that allowed the customer to get through the checkpoint quickly and easily.
But is the ultimate problem the result of an assortment of problems like shipping containers being taken by the highest bidder or overseas stimulus as the inventory crisis article in stitches indicates? Those excuses partially explain the problems experienced the first half of 2010 but do nothing to explain why suppliers are making the same mistake again this fall. Instead of trying to release new products to stay ahead of one another they should stock the ones they already launched. They have not learned a thing from their earlier experiences and that is evident from a quick check of Leed's site where you will see they are already short on dozens of products just released last week. Perhaps this is the Achilles heal of the huge supplier in that they cannot carry the core items in large quantities because inventory dollars are tied up carrying hundreds of items that will end up failing and be put on the clearance rack. In the end this makes the job of the individual distributor almost impossible as they cannot sell with confidence and right now few suppliers are immune. Gemline seems to be carrying sufficient stock and when they run low they get items back in quickly. Primeline also seems to be able to maintain high inventory levels and at the same time they return to inventory items that get back-ordered very quickly. Leeds on the other hand continues to lag with the site being full of "call for inventory" messages including many of the soon to be popular but unavailable fall line items. Their motto this fall is "a return to giving" and all that many of us ask is that they give us some inventory which would be the greatest gift of all.