The economy is growing and optimism in business is riding high. Except, it seems, in the decorated- apparel industry. That’s the major insight from this year’s State of the Industry report. It’s not a story of stagnation, but decorators are certainly reporting a tale of dampening enthusiasm. On average, they are less optimistic about the industry than they’ve been in previous years. The majority of decorators believe their sales numbers will stay level this year rather than grow, and about a third of the professionals we surveyed are consumed with the need to broaden their customer base.
Why the tempered expectations? Decorators cite the ever-growing roster of choices that consumers have: online competitors, home hobbyists and suppliers who do their own decoration. And because buyers can find so many options, their choices increasingly become pricedriven, say decorators who were surveyed.
The news isn’t all doom and gloom. Over half of decorators see the average apparel order size increasing; social media is proving a surprisingly robust means of generating new business; and industry companies are reporting less trouble with retaining their best customers and meeting deadlines. And looking broadly, the desire for logoed apparel is as strong as ever. “More people want apparel with their logo on them. The public has never been more understanding of the importance of promoting their brand, from the corner store to the e-commerce site,” says one decorator. “This makes sales calls a lot easier, as your customer has an understanding of the importance of advertising. We have more customers calling us now than ever before to get logo apparel.”
How can you spur your business to success? Read on for insights on the decorated-apparel industry and business-building tips to carry you into 2019 and beyond.
Modest Expectations
This wasn’t the year to break out the pom-poms and megaphones. Optimism among decorators moderated to a 3.66, a marked drop from what was originally forecast. (In last year’s SOI, apparel decorators predicted industry health would be at an all-time high of 3.95 in 2018.) Though only a glancing few believe their sales will be down, the majority expects revenue to stay level rather than spike upward.
The average industry health rating, according to decorated-apparel professionals.
Just over four in 10 decorators are expecting to increase sales in 2018, a decline from 2017 forecasts.
The median size for apparel orders among decorators is $300. Fifty-five percent of those surveyed believe the average order size for promotional apparel is increasing.
Three Tips for Growing Your Business
- Focus on quality and service.
One negative review online equals the loss of 30 customers on average, according to a study by Convergys Corp. Avoid this fate by doing everything you can (within reason) to keep your current client base satisfied. - Ask for referrals.
Make it easy for your best clients to give testimonials and referrals: Build your referral requests into your customer follow-up process. - Get social.
Be strategic with social media. Use your accounts to show off your work, offer promotions (without spamming followers) and expand your network.
Back to Basics
Apparel decorators are refocusing on core techniques, with many offering fewer services than in previous years. Embroidery, heat transfers and screen printing reign supreme, while digital decoration methods seem to have been put on the back burner. There’s also less of a push to add new equipment. In last year’s SOI report, half of decorators said they planned to buy new screen-printing equipment this year. This time around, the figure plummeted to 28%.
These are the top five techniques apparel decorators currently offer.
The percentage of decorators who planned to purchase new equipment.
Fewer decorators are offering digital decoration – like direct-to-garment and sublimation – than in years past. The number of decorators that reported offering DTG has dropped 42% since 2016; for sublimation, there was a reported 37% drop in usage over two years.
Three Tips for Buying Equipment
- Determine your needs.
Analyze your customer base. Do you need a DTG to handle low-volume or one-off orders? Another automatic press or multi-head embroidery machine for an influx of corporate accounts? Or could your workflow issues be solved by reorganizing your production schedules or adding another shift instead? - Do your research.
Read up on the latest equipment advancements and evaluate which features are necessary for your shop. Have your vendor spell out if training, tech support and warranty protection are included in your purchase. - Budget wisely.
Even if you plan to finance your new equipment, it’s important to run the numbers first to make sure you’ll have the added cash flow to cover the monthly payment.
In the Market
When it comes to markets decorators sell into, education and associations remain dominant. This year, construction edged out professional services (last year’s number five) to make it on the list, with 28% of decorators ranking it among their top five markets. Another insight from this year’s SOI: Contract decorating in its purest form appears to be waning. Less than one-fifth of decorators surveyed say they don’t ever sell directly to end-buyers.
Here are the top five markets apparel decorators cater to.
Last year, construction didn’t make it to the top five, with only 23% of decorators counting it as one of the largest markets. A possible explanation for this year’s increase? According to the Commerce Department, total construction spending in July was 5.8% higher than the same period in 2017, at a seasonally adjusted annual rate of $1.32 trillion.
Three Tips for Breaking Into a New Niche
- Research the options.
Scout your community (or even online forums) to find an underserved market and learn everything you can about its needs. Maybe the local running club needs T-shirts for its recurring couch-to- 5K program. What about regional sports competitions? Would participants purchase personalized commemorative gear on-demand from events? - Make connections.
Find an in with one of the decision-makers in your chosen niche. Introduce yourself online or sign up to volunteer at an event sponsored by the prospective client. Once you’ve made inroads with that first client, leverage the relationship to expand your reach within the new market. - Show your worth.
When you meet with prospective clients in your new niche, make it clear how working with you will make their lives easier. Do you have an easy online ordering system that frees up busy parents? Do you offer top-notch graphic design services for the artistically challenged?
Tangled Web
The web is both a source of fear and opportunity for decorators. On one hand, more and more decorators report gaining new business from social media – it’s the second most lucrative source after referrals. On the other, nearly half of decorators view online companies – like Custom Ink, Vistaprint and Amazon – as a significant threat and their biggest source of competition. There are still a surprisingly high number of decorators without a dedicated website for their businesses.
Decorators’ top three sources of new business.
Forty-nine percent say online companies are currently the most significant source of competition for decorators (up from 42% in 2017). And the future won’t be easier: 58% believe online retailers like Amazon will pose a significant threat to their business in the next three to five years.
Three Tips for Smarter Social Media Marketing
- Choose the right platform.
Instagram, with its visual focus, can be a great choice for apparel decorators to show off their skills. Just make sure that’s where your potential clients are congregating online. - Create compelling content.
Behind-the-scenes videos are a proven method for capturing viewers’ interest. People love to see how their stuff is made. - Connect with influencers.
Reach out to prominent personalities in your top niches and send them highquality self-promo apparel. If you can get them to wear your gear on their feeds, you may be able to gain new clients from their eager followers.
A Growing Problem
For decorators, the biggest challenge of the last few years remains the same: how to increase the size of their customer base. This basic business dilemma outshines other concerns like price-cutting pressure and finding talented, reliable employees.
The top five challenges decorators say they face.
Two years ago, the percentage of decorators who believed adding new services was their biggest challenge was 16%, more than double 2018’s figure.