Will Your Promotional Products Business Survive the Next Five

Will Your Promotional Products Business Survive the Next Five Years? 

Back in the day, Carnac the Magnificent (a.k.a. Johnny Carson) was able to divine hilarious questions to farcical answers he was given on his decades long late-night TV show. You don’t need to be a psychic though to see our industry is changing…rapidly! And unless you can keep up with the pace of change, you just might be left behind.   

While our industry hasn’t always been on the cutting edge of trends or technology, big venture capital companies see huge potential and are buying into our business at ever increasing levels. Their investments mean the big companies will only get bigger while the small companies will either adapt, merge, or die. The saying  “the only constant is change” has never been truer as there are big changes ahead for the world of promotional products.

While there are many factors contributing to these changes, I believe the three areas below will have some of the biggest impact over the next few years. 

Technology - Everything that happens in the future of our industry will start with technology. We’ve come a long way from the days when there were no computers, Internet, or email and every order was handwritten and flowed through suppliers manually. 

Today buyers want more control over their orders, which means technology must be developed to make the experience seamless. But ramped up technology costs big money, which gives the largest distributors and suppliers an advantage. From seamless back-end integration, advanced cybersecurity, data collection, and global distribution to augmented reality, virtual reality, or 3D holographic avatars, it all costs money. Big money, which is why many small and mid-sized distributors and suppliers are likely to either be gobbled up or disappear.  

Younger buyers are tech savvy and simply want a “view and buy" experience where they don’t have to interact with humans. These buyers want to work with companies with fully integrated platforms. From looking at products via Augmented Reality (AR) to tracking orders all the way to delivery… and everything in between.

Those companies willing to invest to make their platforms state-of-the-art will also be the ones snapping up the small and mid-sized companies and consolidating our industry. There is no end in sight as to where technology will take us, so hang on for some marvelous adventures ahead!

Consolidation - Venture capital continues to drive consolidation in our business with a handful of billion-dollar corporations leading the way. Mergers & acquisitions were quashed during the pandemic, but they’ve coming back strong and will only increase in the coming years. For small suppliers, the product testing, social audits of factories, safety, and compliance with federal laws all end up costing hundreds of thousands of dollars annually. Distributors meanwhile have to spend big bucks to keep up with e-commerce advances, cybersecurity, global fulfillment, and the ever-increasing cost of employee benefits. 

Buying groups and software as a service (SaaS) companies like Facilis, Proforma, CommonSKU, and Sage offer distributors a way to look big by spreading the cost of technology upgrades amongst all their members. But these groups aren’t for everyone and unless suppliers and distributors can offer their customers a seamless buying experience, they’ll be snatched up by big players or close their doors. 

There will always be a place for the smaller, boutique-sized distributors and suppliers, but they will need to have incredibly creative ideas or specialized knowledge for specific niches to offset the buying power and suites of technology offered by their larger competitors. Expect to see consolidation continuing as promo products gain in stature as a desired marketing medium. 

Sustainability Matters - Far from just a buzzword, the movement for sustainable and eco-friendly products continues to grow. The demand for products made from recycled goods, plant-based materials like bamboo, cork, and jute or carbon neutral manufacturing processes is huge. 

The new generation of buyers are environmentally aware and want to know the products they’re buying and the manufacturers who make them adhere to socially conscious guidelines. CPS or cheap plastic stuff will go by the wayside replaced by products that have value, staying power, and are easily recycled. Companies that can’t document how their products are responsibly made and how their company is environmentally and socially aware will lose business to those who can. The new leaders of our industry understand this and are incorporating technology, sustainability and new ways of reaching customers into their companies to stay on the cutting edge. The future of our industry is really very exciting, and in five years from now, it will look much different than it does today. 

As the host of proFILES, an industry podcast here on PromoCorner, I’m excited to announce we’ve revamped our format. We’ll be interviewing many of these new leaders and entrepreneurs in the months ahead to get their take on our industry and what plans they have to disrupt it to make it more engaging, exciting, and relevant!

It doesn’t take a psychic to see the world is changing quickly and our industry right along with it. If you’re not at the front of the pack, then you’re already behind.  Or, as the late southern humorist Lewis Grizzard noted, “If you ain’t the lead dog, the scenery never changes.”