Bet On Brand Names

Wearables Sales Forecast 2013
By Christopher Ruvo

Believing In Brand NamesWhether it's a brewery or aerospace corporation, many of Matt Gledhill's clients have one thing in common: they desire name brand apparel. "For the majority of people I work with, brand is an important factor," says Gledhill, marketing consultant at San Antonio-based Walker Advertising (asi/354440). "They like to have the branding of the apparel on their shirt in combination with their brand because it adds prestige."

Gledhill is among the swelling ranks of distributors who say that clients feel it is important that the threads they buy be name brand. Since 2010, the percentage of distributors who believe name brands are important to clients has steadily risen, increasing from 42% to 47.3%, according to this year's forecast. "The interest we're seeing in name brands goes against the grain of the narrative that customers are only interested in the lowest price," says Zachary Tyler, president of San Francisco-based Creative Marketing Concepts (asi/170631). Since name brands typically carry a heftier price tag, distributors who can capitalize on interest in such apparel stand to generate more lucrative orders. "The interest in name brands presents everyone in the industry with opportunities," Tyler says.

Distributors have different ideas on what's driving the uptick in name brand interest. It could be that some companies are rebounding from the recession and, with more budget to spend, want to invest in apparel that has a higher-perceived value. "You can get a comparable shirt for less money, but my clients are willing to pay more for the brand image," says Gledhill. It could be, too, that interest is being driven by the fact that more name brands than ever before are available in the advertising specialty space. Still, some say it's the other way around: Market demand has compelled name brands to enter or increase their offerings to distributors. "There has been pent up demand for years," says Tyler.

Whatever the reason, many distributors are scoring successes with name brands. Creative Marketing Concepts sells crates of American Apparel (asi/35297), to the technology companies that populate the greater San Francisco area. Powered by a young workforce, the start-ups want the hip cache associated with the L.A. clothier's lines. "It's routine for customers to come in asking for specific brands," says Tyler, noting name brand T-shirts and track jackets are especially popular with local customers given the Bay Area's climate.

For Gledhill and his clients in the sweltering south, name brand polo shirts with moisture-wicking properties are popular. Nike and Adidas sell well with the beer companies that Gledhill services, while an aerospace corporation recently purchased hundreds of Nike polo shirts for executives and supervisors. "They're the people who are very visible to the company's customers and having that Nike branding on the shirt adds a perception of greater value to their service," says Gledhill.

While the number of distributors who think name brands are important to clients is growing, more than half of distributors still say that name brand is either unimportant or neither important nor unimportant to clients. Price can be a hindrance for clients, who might dismiss name brands as too expensive. The escalating quality of private label options has made it easier for distributors to pitch an alternative.

Optimistic ThinkingWhile price considerations remain crucial, distributors may be missing opportunities by not pitching more name brand gear. Tyler tells how a nonprofit client recently asked him to suggest a hat it could give to executive-level attendees of a golf fundraiser. While Tyler instantly thought of a Ralph Lauren Polo hat that would be just right, he balked at suggesting it. "I really didn't believe they'd buy a $35 hat," he says. Nonetheless, he acted on his initial instinct. Good thing he did. The hat was a resounding success. "Later I got an e-mail from them saying how amazed they were with the hats and how the hats were nicer than the ones in the golf resort gift shop," says Tyler.

So far, the appeal of name brands in the apparel category does not seem to be extending to the products side of the industry. "Name brands tend to resonate more with apparel," says Tyler. Gledhill, meanwhile, says that certain clients are enticed by name brand accessories and hard goods –Wenger Swiss Army knives, Oakley sunglasses – but generally they opt for less-expensive alternatives. "We'll have clients who ask for name brand products, but then they don't want to pay for them," he says.

"Products tend not to have the same kind of brand following that you get with apparel."

Whether name brands will grow in importance when it comes to products remains to be seen. Regardless, the appeal of name brand apparel appears to be on the rise. Don't miss the chance to cash in on it.

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