9 Things To Know
Wearables Sales Forecast 2014
By C.J. Mittica, Shane Dale, Sara Lavenduski and Christopher Ruvo
That’s the predicted revenue for imprinted apparel in 2014, according to our Wearables Sales Forecast.
It’s a robust number, underscored by the fact that roughly one-third of all sales for the advertising specialty industry comes from wearables. As the industry continues to demonstrate bankable strength, it’s no secret where distributors turn to when they need to make a mark.
That’s not the only bit of good news in our annual forecast. Average order size for apparel grew for a fourth consecutive year in the study. Performance apparel continues to demonstrate explosive growth. Opportunities are arising in a number of major markets. To capitalize on these opportunities and more, here are the 9 things you need to know from the Wearables Sales Forecast.
1. Performance apparel shows no sign of slowing down
Andy Shuman, general manager of Rockland Embroidery (asi/734150
), says there are three reasons why performance apparel has risen in popularity – and why nearly 60% of survey respondents expect its sales to continue to increase.
“The first component, obviously, is comfort. The stuff is just really comfortable to wear in most cases,” he says. “The second is care. It’s wash and wear – take them out of the dryer or hang them to dry, and no ironing, no wrinkles. That’s huge as well.
“And over the past several years, the third element is price. There are a lot of price points for performance items. At one point, it might have been out of budget for a lot of end-users, but in bringing a lot of the styles and brands down in price, they’re covering a much broader landscape.”
Shuman says the industry has been a direct beneficiary of the millions of marketing dollars spent by brands such as Nike and Under Armour to promote their performance wear product lines. “In the decorated apparel industry, so many conversations start with, ‘Can you get me something like Under Armour?’ They don’t even know they’re talking about performance fabric; they just know they want that shiny, smooth stuff,” he says.
2. Moisture wicking takes the cake for performance properties
From the survey, nearly 90% of both screen and non-screen printers find that moisture wicking is the most popular performance feature on the market. Rich Medcraft, owner of StitchWise Embroidery Design, says comfort is moisture wicking’s number one draw. “Moisture wicking allows the wearer to be more comfortable, which is why cotton was once preferred. It pulls moisture away from the body so it can evaporate,” he says. “Some manufacturers like Ash City (asi/37143
) add an anti-microbial treatment, which also helps reduce odor from sweating.”
Shuman says the feature is essential in some environments, like athletics, and simply preferred in others. “In the corporate market, it’s probably more of a comfort element,” he says. “They’re nice and comfortable to sit around in in your office, and you can pull it right out of the dryer and put it on.”
Wrinkle resistance runs a close second in terms of customer preference for performance properties. (Both it and moisture wicking are the clear top two choices.) “Everybody likes simple,” Shuman says. “Nobody likes to iron, and you don’t have to dry clean. Carefree is great for everybody.
“If you’re talking about uniforms such as in the restaurant industry, managers don’t have to worry about somebody coming in looking like a schlub because they didn’t iron their shirt. It’s the same with athletic staffs: Everybody’s going to look the same. They’re going to look uniform, and there’s no variance in care.”
3. The average wearables order size keeps growing
For Sunday Print Co., 2013 has been a banner year. Business is up 20% at the Los Angeles-based screen-printing shop. A big reason for the increase, says Co-Owner Tim Guza, is a rise in the average dollar size of an order. “We’ve definitely seen more substantial totals on our invoices this year,” Guza says.
The uptick in order size at Sunday Print Co. is representative of an industry-wide trend. Screen printers and distributors reported that the average dollar amount of an order increased to $876 in 2013, the highest tally in four years of tracking. Encouragingly, the average order this year was $194 more than in 2010 – a leap of 28%. The most substantial jumps in growth occurred in 2011 and 2012 as the budgetary shackles of the recession started to loosen, but the fact that order size again grew suggests that client budgets are stable or strengthening, and that they’ll continue to invest in imprinted apparel. “It seems like there are people who have more money to spend,” says Guza. “They’re less skeptical about spending.”
At Sunday, the increase in the average dollar size of an order has been driven, in part, by the fact that customers are simply ordering more product. Whether it’s an organization buying apparel to sell at a fundraising event or musicians purchasing T-shirts to promote their band, order volume is swelling. “We’re a small shop and in the past we’d do a lot of orders for 25 or 50 pieces,” says Guza. “But now the orders are generally coming in the 100 to 500 range.”
Additionally, the upsurge in order dollar size has been propelled by changing tastes. Customers, says Guza, have been more inclined to buy higher-end apparel and pay for more elaborate prints. “We’ve been doing a lot of American Apparel,” says Guza, “and we’ve had more customers going for four- and five-color prints.”
Matt Gledhill, marketing consultant for Walker Advertising (asi/354440), tells a similar tale. Larger companies and corporations he serves are keener now than in years past to buy retail-brand apparel, a welcomed evolution that’s helped drive his average wearables order to around $2,000 while contributing to a 20% increase in overall sales this year. “My clients are starting to understand that appearance means a lot,” says Gledhill, noting 65% of the apparel he sells is retail name brands. “They are realizing that money spent on the cheapest apparel possible is not necessarily the best solution for the balance sheet. I definitely see this trend continuing.”
4. Margins are holding steady
While the recession may have cut into margins for some distributors or decorators in recent years, there is little fear of that happening in 2014. Between two-thirds and three-quarters of distributors and screen printers expect profit levels to hold steady on a variety of apparel and accessories, including T-shirts, polo shirts, outerwear, caps and bags. Some firms are even more optimistic: 21% of distributors expect margins on T-shirts and caps to increase, while 30% of screen printers anticipate a profit rise on tees.
Guru Ink is among the industry businesses that anticipate an overall rise in margins next year. This would continue the profit gains of 2013, a year in which the Medford, OR-based screen printer’s average profits rose between 10% and 15%. “We’ve seen potential for especially good margins on sweatshirts,” says Owner Jason Hanlin.
The shop’s ability to post healthy profits is a direct result of the quality, creativity and service it offers. Guru advises customers about how the logos and graphics can be substantially enhanced. The shop then delivers fawless prints on a range of quality apparel. Recently, such a performance helped a school sell 1,500 shirts in just a few weeks; prior to that, the school hadn’t sold nearly that many shirts in four years. Needless to say, the school will be coming back to Guru. “We help clients brand themselves better,” says Hanlin.
5. Brand names are important to buyers
For an industry that wasn’t known for selling brand-name products until recently, it’s remarkable that nearly half of survey respondents report that those products are important to their clients.
Mike Emoff, CEO of Shumsky (asi/326300), remembers his first years in the mid ’70s, when big brands and their reps would “snub their nose at small businesses” for fear of degrading their brand. “Then, when business started getting tough in the early 2000s, these brands at retail weren’t selling anything,” Emoff recalls. “The events of September 11, 2001 hurt the retail market, so they started looking for other distribution sources.”
Emoff says customers are attracted to brand-name promotional items primarily because of the consumer trust that comes with them. “That’s where people say, ‘I’ll pay more because Nike invested so much into making a trusted brand,’ ” he says.
And even though these items are also more expensive for suppliers, Emoff says the payoff is worth it. You get higher margins on them, and you can’t really knock them off,” he says.
6. Major growth isn’t expected with eco apparel
Eco apparel sales have apparently leveled off, as less than 20% of survey respondents predict an increase in that area of their business going forward. Stefan Bergill, sales manager for Econcsious (asi/51656), says the reasons for this are both superficial and financial.
“I think it is true that in the promotional products world, ecofriendly promotional products are not as sexy as they were 5-6 years back,” he says. “The newness of organic cotton faded, and distributors started looking for the next trend. The recession also hurt big time. And the prices for raw cotton went through the roof.”
Evan Toporek, CEO of Alternative Apparel (asi/34850), says those in the eco apparel business may need to become a bit more dynamic in their marketing strategies. “If your only pitch is that you’re making something that’s environmentally-friendly in the fashion business, that won’t get you anywhere,” he says. “The products you make have to stand alone as something that people want, including the look and feel.”
7. There is optimism for T-shirt sales – especially with screen printers
Both screen printers and non-screen printers are largely optimistic that wearables sales will increase over the next 12 months, particularly in the T-shirt category.
The reason: “They’re so popular!” says Steven McKee, owner of Heritage Screen Printing Inc. (asi/700490). “Every year, there are more and more T-shirt styles coming out that people of every age enjoy wearing to support their causes, schools, or favorite brands.”
Screen printers may be more optimistic than non-screen printers about rising demand, says Howard Potter, CEO of A&P Master Images (asi/702505), because they can testify first-hand to the benefits of screen-printing garments as opposed to other methods of imprinting.
“Wearables can be screen printed faster than they can be embroidered, and markups are higher,” Potter explains. “If you have a great design team and you print with all sorts of different inks, you’ll unlock a Pandora’s box of endless possibilities. If your screenprinted designs are very good, the quality of the prints is high, and your turnaround times are quick, you’ll get increasing numbers of orders.”
8. Screen printers rely on heat transfers for added capabilities
Nearly three-quarters of screen printers surveyed report using heat transfers as well. Why? According to Brent Bolm, owner of Eagle Activewear, it’s the fexibility factor. “The largest advantage of transfers is that you can print or purchase transfers and not be solely married to printed apparel,” he says.
Such was the case in a recent order that Bolm completed for a nationwide food company through a distributor. “The end client needed six different true four-color process logos on individual T-shirts. We were able to group the six images on one screen print transfer sheet and saved them over $1,000 in setup costs alone,” he says.
“Besides a substantial cost savings, the additional benefit occurred since we ordered a certain percentage over the initial order and then fulfilled the dreaded add-on orders with no issues.”
Screen printing always has a place in Bolm’s shop, but he says the mobile aspect of transfers come in handy for on-site decoration. “You can order transfers for an event instead of printed apparel to lower your initial cost and potential waste if dated materials do not sell,” he says. “You are not out the printed shirts if you do not sell all the transfers.” He adds that during the art setup phase, you can cut away the date and use the prints for other events. If the event is on-going, some vendors can react quick enough to send more transfers if you run out. “I would expect transfers to follow the explosive growth of event marketing,” says Bolm.
9. With special effiects, go for distressed
The distressed print continues to reign as king of screen-printing special effects, used by almost 75% of screen printers and sold by nearly six in 10 distributors. One of the main reasons, says Dany Ochoa, president of RELIK INK, is it’s simple to produce: no specialized equipment or handling is required, and it’s relatively inexpensive to pull off. “In contrast to other more demanding methods, like discharge printing, distressed requires standard equipment,” Ochoa explains. “Plus it’s a forgiving print. Small details and imperfections are much less noticeable.”
Terry Keeven, owner of St. Louis Print Company (asi/700623), says that not only are distressed prints easy to produce, but also that their popularity at retail has moved into the promotional market. “Everybody’s looking for the printed lightweight tees and burnouts,” he says.
Plus, distressed prints produce a softer, easier-to-wear print. C.J. Mittica is the editor, Shane Dale is a contributing writer, Sara Lavenduski an intern and Christopher Ruvo a staff writer for Wearables. Larry Basinait is the executive director of research services at ASI.
ABOUT THE WEARABLES SALES FORECAST
There were a total of 545 respondents to the study. Survey respondents consisted of two groups.
Screen printers include:
- Screen printers who do not sell promotional products hard goods
- Promotional products distributors that also offer in-house screen printing
Non-screen printers include:
- Decorators that do not provide screen printing themselves or sell promotional product hard goods
- Promotional products distributors that do not decorate in-house