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Target Hot Markets
From State of the Industry 2009
May 2009
By Julie Cajigas

When it comes to surviving the recession, Jay Fishman, owner of Wicked Stitch of the East, tells it like it is: "Let’s be realistic. When you’re talking about millions and millions of unemployed people, the downturn is going to hit every industry. People need to tap into multiple markets to keep their business going strong."
Don Tillquist, owner of Coastal Embroidery LLC, agrees. "It’s all about diversification," he says. "We don’t have one customer that makes up more than 2% of our sales – if one customer jumps ship, we’ll be just fine." But what markets are the right ones to enter during the recession?

We asked decorators who their top clients and top markets were, and no one group took the majority percentage. With that in mind, we set out to learn which industries and vertical markets are faring better than others in the current economic downturn, and how embroiderers are beginning to increase their market share in those niches. Even though no one single market dominated in the survey, if you combine the athletic teams market, the education market and the organization/club market, together they make up more than 26.1% of the reported sales. These markets were also the most mentioned when we asked decorators where they saw the potential for recession-proof markets.

"What we have noticed over the past few months is that the school market is definitely going strong," says Ginny Gaige, owner of Artistic Thread Design. "Schools keep ordering – they need garments for their sports teams, the prom and for fundraisers to help them keep afloat in the economy." Jodi Hinkelman, owner and operator of Ago Bella Embroidery, agrees with Gaige. "The schools are recession proof, especially when it comes to uniforms," she says. "Regardless of the economy, uniforms are mandatory at many schools."

Hinkelman also suggests that sales in team sports and other organizations outside the schools will remain steady during the recession as well. "I do a lot with teams and clubs," she says. "Every time the season changes, the team will need new shirts, and coaches are continuing to contact me for pricing." Hinkelman explains that this year she is seeing more price sensitivity and consciousness from those buying for sports teams, "but even if it’s the least expensive item I offer, they continue to buy," she says.

Some other markets that decorators report as holding steady in this economy include the emergency services industry, the beverage industry, the entertainment industry and government at the federal, state and city levels. "My biggest customer is the local city government," says Meredith Kowalsky, owner of Prestige Monogram. "They’re pretty regular customers no matter what the economy seems to be doing."

One market seems to be growing during the recession and may account for the "other" designation on the graph – small businesses. "Now, we’re actually seeing a lot more sales out of small business," Tillquist says.

"Some of the small-business clients have been regulars, but a lot of them are new businesses, started because of the economy." New small-business owners will need branded apparel, along with a host of other marketing products, and will depend on decorators to direct their purchase decisions and help them digitize their new logos for the first time.

So, now that you know which industries seem to be weathering the recession, how can you add them to your client mix to help recession-proof your own business? Most decorators suggested that selling into new markets is in many ways no different than the selling you do every day, and that all the tried and true tenets apply. "Word of mouth is still the best way," Gaige says. "The people we’ve worked with will recommend us because we’ve done a good job. A lot of it is asking for the referral. When we have a current client on hand, we make a point to ask them to spread the word." From marketing to customer loyalty programs, the way to gain and maintain new clients in recession-proof industries is to really emphasize business development. – Julie Cajigas

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