What's Hot in Your Neck of the Woods?
By Kenneth Hein
March 2010
Distributors across the country weigh in about hot sellers and top markets in each region.
The United States of America is a massive country. For a little perspective, Texas is bigger than France and Maine is pretty much the same size as Austria. Much like Europe, our country has different climates, different accents and different preferences. That’s why Advantages reached out to a number of distributors in each of the country’s four Census Bureau-designated regional divisions.
We asked folks in the Northeast, Midwest, South and West what products were spurring sales as well as what industries were holding strong. The answers were as varied as the terrain. While those techies in the Pacific Northwest clamor for lip balm, the professionals in the Northeast love hand sanitizers. In the Midwest, hoodies are always popular among the schools, and down South – don’t forget the suntan lotion for those tourism clients.
Here are some other obvious and not-so-obvious items and industries that are driving sales across the U.S. Keep in mind, all areas should see some boost from the 2010 Olympics and elections, with items like wearables, buttons and bumper stickers. Our prognosticators have put together a sales forecast for each region, too, so read on to see how yours
will fare.
#1 Seller: South
One wouldn’t expect to score a big fleece order in Miami, but think about all the air conditioning. That’s just what happened to Danette Gossett of Gossett Marketing (asi/212200). A local hospital ordered microfleece “because they are always freezing in the hospital. Right now wearables seem to be heating up again. Not that they fell off that much last year, but I get more and more calls every day for apparel for corporations for training, incentives and team-building type things,” she says.
Still, Gossett’s clients are typically looking for fitness and health-related items like pedometers and golf items. “We’re in season right now. We do travel and tourism, hospitals and universities and fast food [Burger King is headquartered in Miami].”
Overall, Gossett says clients are being smarter about their purchases. “They don’t ask for 1,000 throwaway items. Everyone wants return on investment and value. They are really thinking about what the items are for.”
We all know everything is bigger in Texas, and apparently so are promotional product sales. “The economy isn’t as bad in Texas as it is in other places,” says Joe Blair, vice president of Prime Premier. “We have a diverse economy. We’re not like Detroit which relies on auto. The cost of living is pretty low. There is no state income tax and the corporate taxes are very favorable.” And although unemployment does rank high in Texas at 8.3% as of December 2009, the state ranks second as a top state for business, according to CNBC.com.
That’s why a number of large corporations like Frito-Lay, Hewlett-Packard and Cinemark are headquartered in and around Dallas. “There are 40 or 50 different world headquarters here,” says Blair. “There is a pretty good list of companies that have settled here.”
Of course, there’s no shortage of competition gunning for this business. Blair has found success in health care and the smaller businesses in the area. They are currently attracted to the tried-and-true products like coffee mugs, magnets and can coolers. “I’m selling a lot of lower-end things, the old standards that people are used to,” he says.
Not all areas in the South are as prosperous as Texas. In South Carolina, for Steve Riley of Emerald Ink & Stitches (asi/187714), it’s all about sticking with what he knows. Riley was a fireman for 17 years, so he concentrates on the public safety. “I know the lingo and the people. We love public safety.”
Riley focuses mainly on apparel and says, “We always try and be budget-oriented and price-conscious. If you get the account, they’re usually loyal if you do a great job and deliver on time.” To spur new business, he networks at events, “because after six months of doing shows and they see you four or five times, they start to trust you.”
#2 Seller: Midwest
The Olympics are coming up and for some lucky distributors, it will be a boon for promotional product sales. Bob Levine recently pitched a series of items to a company that makes bottle products. On a Friday the client asked for 10 ideas from his company, MADCO Printing & Advertising in St. Louis. The following Monday he pitched everything from coolers to bottle openers to hockey puck stress relievers. The client appeared likely to go with the latter.
Still, business overall in St. Louis has been tough. Although unemployment in St. Louis ranks at 9.8%, one brighter area is the Consumer Price Index (CPI). According to the Bureau of Labor Statistics, the CPI for St. Louis decreased 0.5% from the first half of 2008 to the first half of 2009, the first over-the-year decline recorded since 1955. The release cites decreasing transportation costs as accounting for the price drop. “There has been a major downturn. Corporations are leaving to go to the middle of nowhere where there is cheaper labor. It’s getting tougher on a daily basis,” says Levine. One bright spot that remains is health care. “We have some major health-care clients like hospitals and biological research. Doctors are always looking for new patients and we look for inexpensive but decent products they can use to promote themselves. Bags and hand sanitizers are huge,” he says.
In Milford, OH, Rick Seissiger, of Digimax Graphics Plus (asi/180734), has found success by servicing blue-collar organizations. Sales among his client base of landscapers, contractors and manufacturers have remained strong. He sells a lot of apparel, from higher-end items to inexpensive screen-printed T-shirts. “That business is up 50%. Any increase is good” he says.
In nearby Cleveland, Bob Walker says he too is “doing an awful lot of wearables.” JMA Promotions/CW Embroidery relies on corporate businesses that are looking for company stores. “I definitely love doing reorders,” says Walker. “I’m sensing more optimism from our customers.”
Feeding off of this, Walker is launching www.iheartpromoz.com to target “accounts I haven’t been able to break into yet. We think it may be more approachable than JMA. It’s exciting for us,” he says.
In Minnesota, it’s all about keeping warm. That’s why hooded sweatshirts with retail looks are very popular, says Rick Pierre, president of Heritage Embroidery. “Quarter-zip sweatshirts are very popular with the youth market, which is more of our focus than anything.”
Pierre says he has made a niche out of high-school spiritwear. “Consistently in the last two years it has been strong for us. Price-conscious moms and dads will still spend $60 for a sweatshirt with their kids’ team’s name on it,” he says. He sells a lot of knit caps, fleece and “anything to stay warm.”
#3 Seller: Northeast
Salespeople in the Northeast have an advantage over many other parts of the country. What is that advantage? The sheer number of businesses located in and around their towns. Many distributors who had once relied on one type of industry have since diversified or found another niche to hang their hats on. One of the reasons for the sheer number of businesses is the growth in big cities. According to Census data, many of America’s largest cities are now growing more quickly than the rest of the nation. For metropolitan areas greater than 1 million people, the growth rates of cities grew 1%, compared to 1.1% for suburbs.
Jody Ferrer, of The Perfect Promotion (asi/293518), says because of her location in Connecticut, she attracts a lot of doctors and lawyers. “More professionals are coming out and saying, ‘We need to market ourselves.’ I’m in a very professional area. There are lots of hospitals, doctors’ offices and lawyers.”
Ferrer’s clients are interested in fleece, food gifts, tech items and, of course, hand sanitizers. “We’ve done a lot of that,” she says. “Industries all over the map are using it. It shows that they care about their clients. It’s a value-added product even though the hyping of swine flu is really just the media making us crazy.” She also usually sells a lot of ice scrapers.
In New York, “There is no shortage of business as far as I’m concerned,” says Donna Shwechter of Diamond Star Promotions (asi/180212). “I have a lot of clients who are still holding major events that you read about in the paper.”
One area in particular that has served Shwechter well is nonprofits. She provided products for a recent fundraiser for the Michael J. Fox Foundation for Parkinson’s Research, as well as other high-profile events. “Corporate nonprofits are big for me. They might not be making a profit, but I hate to say it, I am.” She says one trend across the board is an inclination toward less expensive items. “Last year they spent $8, this year they want to spend $5. There are a lot of event planners who have cut back.”
Next door in New Jersey, where many pharmaceutical companies are headquartered, business has fallen off, says Michael Reisbaum, president of ProCon Marketing. “Pharma is not doing great right now because of the restrictions. Veterinary sciences aren’t down as much because there aren’t as many restrictions.”
While the financial industries have taken a beating, Reisbaum has actually seen some growth in that area of late. “Banks are obliged to at least give the impression that they are lending even if they are not. They want people to think they are open for business. They need to maintain that stature,” he says. Debt consolidation services and credit unions are also buying.
Reisbaum says many end-users are interested in talking about green products, but it often ends up just being talk. “They are looking for anything that will make a large impact on a small budget. They may buy a padfolio that is bonded leather, not leather. A couple of years ago, that would have been frowned on for being cheap. Now it is looked at as being economical. Perception is important,” he says.
Some of the safest sales come from teams and school organizations, Reisbaum says. “Those margins are bad and the quantities are abysmal, but there is business. It keeps the machines going.”
Near Philadelphia, Terry Derstine of Executive Promotions continues to look to diversify his client base. However, larger is better. “My target isn’t the small company that doesn’t have a budget. I’m trying a little bit of everything,” he says.
Derstine’s clients are looking for reusable bags. “That’s the hottest item out there right now.” He also does a lot of stainless-steel travel mugs and tumblers. “I try and find things people will reuse instead of throw in their drawer. There is more value to that,” he says.
#4: West
The sun doesn’t come out a lot in the Pacific Northwest, but when it does, people take advantage. That’s why outdoor-focused items always sell well, says Cal Ormiston, president of Outlook Inc. (asi/288445). “Protection from the sun is a big one for us. When we get outside, believe me, we want to have all of the fun we can when we can.”
In Ormiston’s opinion, lip balm has become the new pen. “It’s an inexpensive item with really good advertising space that promotes health care and lasts a long time,” he says.
Although tech giants Microsoft and Amazon.com are nearby, Ormiston focuses mainly on health care. “It’s just what we fell into. When you’re in this business long enough, you find your niche. We tried to stay as broad as possible, but we ended up doing more in health care after we hit some home runs,” he says.
Ormiston says it is gratifying. For one program, for instance, he created a variety of incentives for people who are trying to work themselves back to health after joint-replacement surgery. They receive water bottles, coffee mugs and buttons for reaching certain goals.
Cyndy Tubin of Paw Print Promotions is located just outside of Seattle. She says clients are looking for USB ports, outerwear and stainless-steel water bottles. “Obviously bottles are now BPA-free, but people are still avoiding plastic. Bottles are important because they lend themselves to our outdoorsy vibe,” she says. She does a lot of work for nonprofits and educational institutions.
Overall, Tubin says she is sensing more optimism from clients. “There is a good energy I didn’t feel last year. Last year people didn’t want to see what’s new. They wanted to stick with classic items like pens and sticky notes. This year people are open to new ideas,” she says. The optimism she notices from clients is echoed among small business entrepreneurs. More than half of entrepreneurs have an optimistic outlook on near-term business prospects, up from 45% in March 2009, according to the American Express OPEN Small Business Monitor, a semi-annual survey of business owners. One quarter report expanding opportunities for their businesses, up from 15% a year ago.
Down the coast into California there are a variety of vital industries like technology, tourism, entertainment and even finance, says Craig Nadel, president and CEO of Jack Nadel International (asi/475001). However, the local government is suffering. “California has a massive financial structural problem. The tech industry is a bright spot, but in California the bar is low,” he says.
Nadel says technology end-users are very concerned about looking green, so they are embracing recycled totes and drinkware. Looking forward, he expects cell-phone accessories will be a hot item in the state as well because, “virtually everyone has a car and spends more time in it than in the rest of the country.”
In Arizona, not surprisingly, it’s all about golf. “It’s huge out here,” says Holly Polston of Garment Graphics (asi/201682). At the same time, she does a great deal of business creating uniforms for charter schools. “That’s my big niche. It works for our company. It’s an area we try and stick with because we’re good at it,” she says.
Kenneth Hein is a contributing writer for Advantages.
