Wearables

Sales Spotlight

Want to up your apparel sales? Target these three key markets in 2015.

Though 2014 began with a dreary winter and sluggish spending, the spring thaw spurred green growth of all kinds, as the U.S. economy shot up at an annual rate of 4.6%, according to the Commerce Department. That’s the fastest pace in more than two years, and experts expect the momentum to continue into 2015. With that encouraging news in mind, here are three growing markets to capitalize on next year.

Retail

Industry at a Glance: Retail sales aren’t quite at pre-recession, shop-till-you-drop levels yet, but Americans feel more empowered than in years past to break out the bills for that perfect outfit. In August, the U.S. retail apparel market grew a full percent compared to the previous year, according to the National Retail Federation. Meanwhile, the NRF reports overall retail sales jumped to 2.7% year-over-year. The across-the-board positive change may be a precursor of better things to come.

“The rise in consumer confidence, labor markets and retail sales is encouraging,” says Jack Kleinhenz, chief economist for the NRF. “August sales figures signal that consumers are willing and ready to spend as the economy improves.” In fact, some economists are predicting retail sales growth of as much as 4.5% during the busy holiday season, from November to January. Financial consultancy Deloitte forecast holiday retail sales, excluding motor vehicles and gasoline, to jump as high as $986 billion.

Some economists expressed concerns that continued unrest in the Middle East could dampen domestic consumer spending, but Daniel Bachman, senior U.S. economist for Deloitte, believes worries over global insecurity are balanced out by a number of positive economic signs. “Debt levels remain at historic lows,” he says, and stock market gains coupled with increased home prices have a wealth effect on consumers, which may encourage increased spending compared to prior years.”

That should be welcome news to more than a quarter of Wearables readers surveyed who count retail among their top three markets for apparel sales.

Sales Strategy: If you want to service the retail sector, it’s important to have access to top-of-the-line, high-volume equipment, like automatic presses with the capacity for many color changes. Knowledge of the latest specialty techniques is also key. Consumers love the look of intricate mixed-media embellishments and the soft, lived-in feel of water-based and discharge inks. Plus, there are a wide variety of opportunities under the retail umbrella, from branded items for brick-and-mortar stores to printing jobs for top apparel brands sold in retail shops.

Success Story: The middle of the housing crisis five years ago wasn’t the ideal time to launch a retail apparel business, but Stephanie O’Connor, creator of the Dang Chicks brand (www.dangchicks.com), was determined to succeed. “When I came into the business, I didn’t have a stitch of experience,” she says. “There was a lot of competition. There are always cute T-shirts.”

What set Dang Chicks apart was its strong branding: cool, comfy clothes with a message of female empowerment. O’Connor’s husband, Tim, came up with the name. “When you walk into a room, you want people to say, ‘Dang, chick, you look good,’” she explains.

O’Connor started out selling shirts at a single booth in a retail mart in Atlanta. Now, Dang Chicks clothing is sold in more than 2,300 stores and boutiques, including the Omni Hotel in Nashville, Boot Barn and the Sundance Catalog. In its first three years, the brand saw volume double every year; that growth has tapered off somewhat, but Dang Chicks is still going strong. O’Connor says she’s branched out from T-shirts to sell jeans, cellphone cases and other lifestyle items. “The brand has really taken off,” O’Connor says. “I think a lot of women can relate to it. The clothes have a fun attitude, but most of all, they’re comfortable.”

Dang Chicks works with a number of artists and decorators to create cute and catchy looks, but the simpler styles often have the most longevity. T-shirts emblazoned with a star and the slogan “dang cowgirl” are perennial best-sellers. “We can’t take them off the line,” O’Connor says.

The brand has a loyal social media following, known collectively as the Dang Chick Nation, and fans are eager to share stories of how Dang Chicks brightened their day. A woman diagnosed with advanced-stage breast cancer sent O’Connor a card and a picture of herself wearing a “Dang Strong” shirt, for instance. “This is why I’m working so hard and don’t sleep at night,” O’Connor says. “It’s because of these stories that touch our lives. It’s incredible.”

Professional Services

Industry at a Glance: Job search site CareerCast named civil engineer one of the most underrated jobs of 2014, pointing out robust growth projections for the profession and a respectable median annual pay of nearly $80,000. Also on its annual list of occupational underdogs were legal assistant, geologist and accountant – all of which fall under the catchall term of professional services, a lucrative market segment that shouldn’t be ignored. With 21% of Wearables readers polled this year ranking professional services among their top three clients for apparel, it’s clear the promotional products industry, at least, is not underestimating these careers.

Typically, professional services exude a conservative feel, branding themselves on, well, professionalism. Firms in this sector tend to gravitate toward embroidered polos and golf shirts, particularly those with high-end, recognizable brand names, says Devin Jones, owner of Proforma Gateway Solutions in Houston. She has, however, noticed some of her clients trying to spice up their staid image, opting for bright colors. “They’re getting away from the black and gray and blue, the standard corporate stuff,” she says. “We’ve done a lot of oranges and bright greens lately.”

Dean Schwartz of Miami-based SOBO Concepts (asi/329592) agrees it can be difficult to push the envelope with professional service clients. “It’s like with anyone else,” he says. “You’ve got to approach if from the way of: What do you want people to think about your business? Do you want them to think you’re conservative or creative? You can’t push clients in a way that’s too edgy. For a law firm, we’re definitely not proposing the same kind of things that we do with clients who target a younger demographic.”

That said, Schwartz has been able to suggest more creative solutions after completing a few jobs for clients and giving them time to gain confidence in SOBO’s methods. The company created USB drives in the shape of the African continent for a large law firm holding a conference in Africa, rather than sourcing the more standard flip drives originally requested. Another client, a professional business association, ordered 100 shirts with laser-etched multimedia graphics rather than the expected left-chest embroidery for an annual membership meeting, he says.

Sales Strategy: Jones of Proforma recommends getting corporate clients into an apparel program, so you’re the go-to distributor whenever the company needs to place an order, big or small. “Our largest customers do an apparel order two to three times a week,” she says. “It may be just one or two shirts. Sometimes, it’s considerably larger.”

Success Story: An independent bankruptcy lawyer came to SOBO asking for logoed pens, but Schwartz and company convinced him to take a more clever approach to branding. That’s typically how it works at SOBO Concepts, Schwartz says. “[Customers will] come to us asking us to slap a logo on a T-shirt. We come up with a design instead,” he adds. “If we had to rely on our clients to give us cool stuff to do, we wouldn’t be very proud of any of the stuff we are doing.”

To start the process, the SOBO team chatted with the lawyer to get a better understanding of his needs, determining that the heart of his job is helping clients to stop worrying about losing their cars, homes – or worse. “People come to him at not a great point in their lives,” Schwartz says.

The team wanted to convey the lawyer’s brand in a way that best represented the services he offers, while also lightening the mood for clients stuck in a very stressful situation. So, they printed the lawyer’s business card information on a black sleep mask, along with the text: “Credit card debts keeping you up at night? Call us. We’ll help you sleep better.”

The lawyer has been pleased with the results, reporting back to SOBO that the sleep mask makes his clients laugh, giving them license to relax in his office, Schwartz says.

Automotive

Industry at a Glance: Turns out, a lot of Americans have been craving that new car smell. In particular, sales of pickup trucks, SUVs and crossovers jumped significantly this year, up 9% over 2013, according to figures compiled by Autodata Corp. As of August, more than 5.7 million vehicles in what is known as the “light truck” category had been sold, Autodata reports.

Higher sales also mean a larger sales force. New-car dealerships employed more than 1 million people last year, a 3.4% increase from the prior year – the highest figures since before the 2009 recession, according to a 2014 report released by the National Automobile Dealers Association, a McLean, VA-based trade group. “The economic recovery is continuing, and we expect a stronger housing market, improving job prospects and continued low interest rates for auto loans to boost sales this year,” says Steven Szakaly, chief economist for NADA.

Dealerships spent $7.6 billion on advertising in 2013, a 6.1% increase, NADA reports. Though about a third of those dollars went toward Internet ads, dealerships still see the value in allocating funds for advertising specialties, like shirts, mugs and keychains.

New and used car dealers aren’t the only automotive segment to consider, however. There are scores of classic and specialty car shows across the country, each of which requires a commemorative T-shirt, at the very least. Another area ripe for promotional sales is the lucrative aftermarket industry. Last year, sales of automotive specialty-equipment products reached $33 billion, a 6.7% year-over-year jump, according to a 2014 market report from the Specialty Equipment Market Association.

Sales Strategy: One negative? Profit margins for dealerships remain slim or flat due to heated price competition. Dealerships may give in to temptation to skimp on promos, but as Howard Potter, owner of Utica, NY-based A&P Master Images (asi/702505), it means ad specialties are a golden way for them to stand out. “Think about it,” he says. “If most dealerships are giving away things that would be thrown away, the few that spend extra are noticed faster, and the product is out there promoting longer, which is giving them more advertising for their dollar.”

Success Story: The J. Carroll Corp. (asi/529690), a 20-year-old decorating company in San Luis Obispo, CA, is carving out a niche creating colorful T-shirts for car shows, especially after hiring automobile enthusiast and graphic designer Kristina Albrecht. Albrecht estimates the shop churns out commemorative car show shirts at least twice a month. J. Carroll is working on expanding both the number of shows it works with and the amount of merchandise it decorates for each.

Albrecht has had particular luck with the Bud Classic Car Show, a growing event in Northern California that originally sought Albrecht out via her personal website two years ago. She brought the client with her when she was hired on at J. Carroll. “Every year, they just let me design what I want,” she says. “It ends up being a pretty big order.” J. Carroll helped boost that order with strategic use of freebies. A complimentary hoodie included in last year’s batch of T-shirts prompted show organizers to tack 150 hoodies onto their T-shirt order this year, Albrecht says.

Albrecht also reminds show organizers and the decorators servicing them not to neglect the women. “With a lot of these shows, it’s not just the men, it’s the wives too,” she says. “They don’t want necessarily just the standard, boxy T-shirt. They want something a little more flattering.”