Strategy April 28, 2020
Promotional Products Sales Report 2020 – East
A steady, established business climate offers plenty of optimism for the coming year.
Looking at the four regions of the U.S., the East certainly isn’t the hot new thing, but it remains a dependable source of income that continues to pay the bills at promotional products firms.
Full Coverage: State & Regional Sales Report
“It’s not explosive. It’s steady. It’s solid,” says Howie Turkenkopf, director of marketing for Stran Promotional Solutions (asi/337725), a distributor with headquarters in Quincy, MA. “There doesn’t appear to be a lot of weakness right now. There are the usual concerns, tariffs and things here and there, but nothing that’s freaking anyone out. It seems to be pretty steady.”
Washington, D.C. is a stalwart market for the promo industry and is one of the regions in the East experiencing above-average population growth.
With established industry, historically low unemployment rates throughout the region and overall economic growth, the East remains a hub of commerce with plenty of opportunity for promotional products distributors, industry veterans say.
“We’re definitely trending up,” says Staci Whittington, promotional products manager for Graphtech, a small distributor in Harrisburg, PA. “We’re growing steady year to year, which usually is about 5% to 8% growth in sales every year. We’re going in the right direction, and spending is up with promo. The markets are good. The economy is good. People are spending money.”
While not seeing the robust sales growth of emerging markets around the rest of the country, the East region includes strong, established markets in cities like New York, Philadelphia, Boston and Washington, D.C.
Larry Cohen, CEO of Top 40 distributor Axis Powered by HALO (asi/128263) in New York City, says the company ended 2019 with a 5% increase in sales after expecting a flat year. “We have a broad-based business that was consistent across many industries,” he says. “We continue to see some challenges as the media and advertising industry adjust to changes in the marketplace. As the Northeast tech sector has grown, we’ve seen added opportunities to provide creative marketing services to these industries.”
Josh Frey, founder of Geiger (asi/202900)-affiliated On Sale Promos and the Swag Coach Program, calls the past year “one of the best years ever for me and my Swag Coach sales team. We grew over 30% in overall sales and in spite of the tariffs, were able to maintain consistent, healthy and way-above-industry-average gross margins.” Swag Coach has four team members on the East Coast, Frey says, and two of them saw the largest percentage year-over-year growth of all teammates across the country.
With its location just outside of Washington, D.C., Frey says his company is poised to capitalize on the growth in that metro area. The District of Columbia, Virginia and Maryland have all enjoyed average or above-average sales growth in recent years when compared to the region.
“The region is booming with Amazon moving in, the federal government located in the city and tons of tech companies,” he says. “That’s a lot of business opportunity.”
Distributors are still facing challenges, especially from online competitors. “We’re a service-based company. That’s where our reputation is,” says Trish Glazer, CEO of Mahwah, NJ-based Glazer Promos (asi/208261). “I do believe there’s a very big space for us and companies like ours in the industry. I don’t think we’re outdated yet. But we do have the millennials who are very happy to do their own thing and run online. I think that online is still a challenge, much like retail stores. We have overhead they don’t have. But I think there’s opportunity.” A new, large client and a continuing commitment to customer service has Glazer very optimistic for 2020. “This year we anticipate enormous growth,” she says. “We’ll probably triple our numbers.”
Distributors say they expect to see continued growth across all market segments, and one of the keys to success has been to remain diversified.
“At the moment, I don’t know that I see a market that’s particularly weak,” Turkenkopf says. “I feel like we’re going as far as we can in all the markets at the moment. I haven’t identified one that we’re concerned about. A couple years back, there was slowness in energy and fuel, but that’s come back decently. Healthcare is still a good, steady market. Retail has been solid for us.”
Hot List
Hot Trend: Eco
As the discussion of climate change continues, expect to see even more demand for sustainable promotional products, distributors say. “We’re really focusing on green right now,” says Glazer Promos CEO Trish Glazer. “We feel that across the board; it isn’t something attracted to any industry. There’s not one business out there that would admit they don’t care about a green initiative.”
Wheatstraws, bamboo products and items made from recycled products all are in demand, as are “give-back” campaigns that support green causes.
Hot Program: Company Stores
Company stores aren’t just for large clients anymore. Smaller, mid-sized companies are also setting up stores to centralize their purchase of marketing supplies, distributors say.
As clients seek to streamline their own operations, company stores help them manage inventory and be more efficient with staff. “If one can get their foot in the door with a growing company, and expand the store offering with supply chain product, they’re well positioned to increase and scale their sales profitably,” says Josh Frey, founder of On Sale Promos and the Swag Coach Program.
Hot Products: High-Quality Items
With brand names like Yeti and Under Armour increasingly entering the promotional products field, expect the demand to continue for quality high-end items. “With the millennial clients that we have, the retail brands and higher-quality items are definitely a trend,” Glazer says. “Brand names are very big with that group, and that group’s getting bigger and bigger.”
Crissa DeBree is a contributing writer for Advantages.