At the start of the pandemic, the world outside our homes was more or less a ghost town. Everything closed for weeks and months. And that included retail shops. Sadly, those closures greatly impacted, and continue to greatly impact, the retail market for promotional products.

“It goes without saying that the in-person retail landscape became almost 100% nonexistent for many months of the pandemic,” says Leslie Schreck, director of strategic accounts at Catalyst Marketing, part of Top 40 distributor HALO (asi/356000).

That had a tremendous impact on the retail experience, which had already been undergoing a remarkable online shift. According to commercial real estate firm CoStar Group, 12,200 stores in the U.S. closed last year – 2,200 more than the year prior. Holiday shopping last year in brick-and-mortar locations was expected to decline 4.7% compared to a 35.8% increase in e-commerce, according to eMarketer.

As stores went out of business, they took their promotional products purchases with them, causing suppliers and distributors to completely take retail sales off their radar. Kellie Claudio, senior vice president of sales and marketing at Sweda (asi/90305), says the Top 40 supplier was preparing to deliver to several retailers at the beginning of 2020. But once COVID hit, those retailers stopped taking receivables, and Sweda was forced to stop those shipments. Claudio says the company isn’t planning to attempt a return to the market until the holidays or spring 2022.

“There is a thirst to shop. I think once holiday deliverables come around in July and August, we’re going to see a robust resurgence for the retailers.”Kellie Claudio, Sweda

She’s also quick to point out, though, that depending on the type of retail business you’re selling to, the pandemic may have been a boon for sales. Stores also selling groceries flourished. Think the Walmarts and the Targets of the world. Aaron Greenberg, the vice president of national accounts at Genumark (asi/204588), can confirm this.

“In my case, 2020 was actually a good year,” Greenberg says. “Sales were up. Fortuitously enough, my bigger clients are all essential services. They’re retailers that are big in the grocery and pharmacy areas versus traditional clothing retailers. They were all open and most of them thrived.”

PPE was a big part of 2020, but now the desire for promo items has shifted again. “We’ve stocked our stores with small customer ‘surprise and delight’ gifts to ease the pain of waiting outside to be let into a store in cold weather,” Schreck explains. “This could include a beanie, hand warmers, hand sanitizer, gloves and an umbrella. We are also slowly rolling out in-store customer thank-you gifts that we’ve held the past year to invite consumers back into the retail stores as long as it complies with all individual state regulations.”

Greenberg has seen the product base shift again. Since his retail clients have executive teams and support staff working from home, he’s moved more toward branded home wellness products or items to make it easier to work remotely. Those products include things like yoga mats, headphones, journals, blankets, pens and exercise equipment.

Unfortunately for some companies, the products haven’t so much shifted as disappeared. Stock that was ordered and delivered before the pandemic has been piling up in warehouses and is getting sold to customers at a discount. In return, the stores want to decrease prices on any new promo items they purchase. “Many of these guys want you to go in on consignment or at a discount right now,” says Claudio.

She does think once we get through the vaccination process, things will pick back up and promo product demand will return to normal. “There is a thirst to shop,” she says. “I think once holiday deliverables come around in July and August, we’re going to see a robust resurgence for the retailers.”

Schreck agrees and is already seeing a trend of reopening stores and rebuilding customer confidence so they can feel safe shopping retail again. She’s getting an increase in quote requests, which shows the opportunity to support retailers with promotional merchandise is returning.

In the meantime, customers will continue to shop online. In fact, e-commerce shopping in the U.S. increased by 32% in 2020, according to Digital Commerce 360. In Greenberg’s case, online business for his clients has practically quadrupled. And while that may mean a hold on in-person promo products, it also allows retailers to get more insight into their customers, which will help inform promotional campaigns in the future. Plus, it helps retailers stay connected to their base.

“We have created countless turnkey data collection sites and portals to gather sizing and home addresses to send anything from a work-from-home kit to a sweatshirt to gift baskets,” Schreck says. “These sites have created a solution for our clients to continue to connect with those they aren’t seeing every day and tell them they’re important. You can’t put a price on the power of connection.”