As Counselor first reported last week, Walmart, the world’s largest company by revenue, is now a player in the promotional products industry. That dawning reality is drawing a range of reactions in the ad specialty space and raising speculation that Amazon’s anticipated heavy push into the industry could be coming sooner than later.
Late last week, news quietly broke that Walmart was throwing its hat into the promo ring with Walmart PromoShop, an online destination where seemingly anyone from a buyer for a Fortune 500 company to a family keen for shirts for their reunion can purchase branded merchandise.
The site features imprintable T-shirts, sportswear, drinkware, bags, pens and writing instruments, health and wellness products, and more. Other categories include desk accessories, home/auto items, and technology products like earbuds, power banks, silicone phone wallets and USB chargers. An online design tool allows shoppers to personalize/customize products with imagery and text.
Industry sources told Counselor that Harland Clarke (asi/219943), a Texas-based distributor, is playing an integral role in powering Walmart PromoShop. Counselor’s multiple requests for comment from Harland Clarke executives and Walmart went unanswered as of publication time.
Sources also stated that BIC Graphic (asi/40480) and SanMar (asi/84863) were Top 40 suppliers with product offerings on Walmart Promoshop. Reached for comment, SanMar would only say that it does not have a direct relationship with Walmart. Items from the Issaquah, WA-based supplier were available on the site, including this T-shirt and this tank top. Brands for sale in apparel included Gildan (asi/56842) and Hanes (asi/59528).
BIC provided a statement to Counselor.
“Bic Graphic does not sell direct and we sell through registered distributor members,” said Robert Babb, Jr., vice president of sales for BIC Graphic North America. “Although some of our products are being sold through Walmart’s site, we are not selling direct to them and we are keeping within our philosophy of selling through a registered distributor who has the relationship with Walmart. Like many of our distributors, Bic Graphic is chosen as a preferred supplier due to our professionalism, safety and compliance record, quality of products and IT infrastructure.”
By stepping into the promo arena, Walmart has also fanned the flames of already burning industry speculation about when and how its big rival Amazon will start transacting seriously in swag.
While Amazon has a foothold in customized/personalized products through its Amazon Custom and Merch by Amazon platforms, promo industry leaders suspect the ecommerce colossus is working toward making a much bigger play in promo. “My sense is that they’re dipping their toe in the water,” says Larry Cohen, CEO of Axis Promotions (asi/128263), of Amazon’s intentions. “It could be that they’re testing things out, seeing what works, what they want to do. And then they’re going to expand it.”
Amazon declined Counselor’s request for comment about what it may, or may not, be planning.
Nonetheless, professionals in the promotional products field were more talkative when Counselor contacted them for reaction about Walmart PromoShop.
Kirby Hasseman, owner of Ohio-based Hasseman Marketing & Communications (asi/221824), believes that any distributor that competes heavily on price without an added value offering is in danger of losing sales to Walmart. “Ask anyone in retail: If you are trying to beat Walmart in the price game, you generally lose,” says Hasseman.
Mark Ziskind, chief operating officer at Top 40 distributor CSE (asi/155807), believes Walmart PromoShop will further accelerate what he believes is the ongoing divergence of business models within the promo space.
“On the one hand, you will have the online players, and on the other, the full service agency-type companies,” says Ziskind. “Given the combination of Walmart’s resources, business acumen, and brand power, they will be a force to be reckoned with. I think the online and smaller shops will feel the immediate impact.”
Danette Gossett expressed a similar view.
“I would imagine distributors that work with smaller businesses and individuals may be impacted,” says Gossett, who spearheads Florida-based Gossett Marketing (asi/491973). “I can also see those individuals that focus on family reunions, some school programs and the like being impacted because those type of customers may already be browsing Walmart for other needs and then see this as an easy add-on solution.”
Still, Gossett doesn’t think that larger corporate accounts are going to shop Walmart for their branded merchandise. “If we are doing our jobs properly, then our clients recognize that we are marketing professionals offering them solutions,” says Gossett. “We are not requiring them to search for their own products and to spend time designing them online. That type of site will appeal to those companies that are smaller and have the time to spend searching and designing to save $.20.”
Meanwhile, Howard Potter, CEO of Utica, NY-based A&P Master Images (asi/102019), opines that Walmart’s presence could have both positive and negative effects for smaller and mid-sized distributorships that compete on service, creativity, and solution-providing, rather than being the cheapest offering in town.
Says Potter: “I see Walmart as being another company that continues to lower the price, quality and pay of the employees who do the work, which obviously would not be good overall for the industry. Still, they could end up putting the larger companies out of business and helping the smaller ones grow. Smaller companies like ours can still grow since we have a better handle on quality, customer service, and turnaround time.”
After Counselor posted an initial article about Walmart entering promo last week, ASI’s Facebook page received an inpouring of comments from industry professionals. Some reactions were downbeat. “I retired at just the right time. It’s over for the little guy,” wrote one poster. Another said: “Not good for all us family-owned businesses.” Others felt less threatened. “Walmart may be good for some things. This is not one of them,” wrote another poster.
Ziskind takes a high-road view, seeing positives amid the competitive challenges that Walmart PromoShop poses. “Walmart’s entry into the industry is a testament to the power of promotional products and the role they play in the marketing mix,” says Ziskind. “The increased visibility of our industry and the increased competition in the marketplace will force everyone to take a more strategic approach, which will be a benefit to all.”
At publication time, it wasn’t clear to what extent, if any, Walmart planned to complement its web-based promo site with in-store support and offerings.
With a reported $485.9 billion in fiscal year 2017 sales, Walmart is the largest company in the world by revenue. Globally, it employs 2.3 million people.