Print+Promo 2019 State of the Industry Report: Having the confidence to evolve with promotional products
For Print+Promo’s 2019 State of the Industry Report, we dug deep to measure print industry health, learn how policies from the Trump administration are impacting print and promo, and find answers to questions, like: Which verticals are poised for growth?
As part of our investigation, we reached out to experts in various market segments: printed forms, labels, promotional products and direct mail. Below is an excerpt from my conversation with Paul Bellantone, CAE, president and CEO for PPAI, Irving, Texas. Find out what he had to say about the current state of promotional products, industry consolidation and areas of opportunities.
What are your thoughts on the current state of the promotional products industry? What would the theme of 2019 be for you?
Paul Bellantone: The overarching theme is having the “confidence to evolve”… the confidence to adapt, innovate, disrupt and challenge the norm through strategy, technology and partnerships. The promotional products industry is a dynamic business environment with deep roots founded in long-standing tradition. It is easy to get caught up in the day-to-day and become complacent. For our industry and its businesses to continue to grow, we must have the confidence to evolve and never stop—never be complacent.
The promotional products industry is growing, no doubt—but are most of its members growing with it? For those who are not, how can they keep up with their more successful counterparts?
PB: According to PPAI’s 2017 Sales Volume Study, the industry grew by just over 9 percent to $23.3 billion. This was due, in large part, to companies, $2.5 million and above, [that] captured nearly 58 percent of the total market share. While the scale tipped in favor of larger companies growing through consolidation and acquisition, we cannot discount the significant impact that small businesses, which make up 96 percent of the industry, have on the future of our industry. With relatively simple adjustments to their strategy, technology platforms and key relationships with business service providers, smaller businesses are nimble and flexible, and in a position to adapt faster to mitigate adversity and capitalize on opportunities.
These days, conversations inevitably turn to tariffs. Is this something that weighs on your mind in regard to the promotional products industry?
PB: Going forward, tariffs and trade regulation will continue to be an everyday part of how the promotional products industry goes to market. Since its inception, PPAI’s government relations efforts have provided a platform for advocacy and outreach through programs like L.E.A.D. (Legislative Education and Action Day), August Recess activations and partnerships with like-minded affiliates to assure the voice of the promotional products industry is strongly represented at the federal, state and local levels. PPAI has been advocating for our industry for more than 115 years and will continue to do so. Our members and our industry are resilient. We do have concern that many, if not all businesses, will be impacted by the tariffs either directly or indirectly, and that can affect their spend on marketing in all areas. As always, it is incumbent on us and the industry to communicate and demonstrate the value promotional products deliver to marketers and advertisers. And that promotional products continue to be the most cost-effective, long-lasting and affordable way to make the best first and last impression.
It’s been slightly over a year since H.R.1, the Tax Cuts and Jobs Act, was signed into law. Do you think it’s succeeded in delivering the economic benefit that was hoped?
PB: I think it is still too soon to determine the long-term economic impact of the Tax Cuts and Jobs Act. Unfortunately, some of the uncertainty created in the business community by looming tariffs may offset some of the benefits of tax reform. Overall, I do not expect either to have a significant impact on our industry. The promotional products industry is healthy and has experienced a decade of solid and stable growth. PPAI will continue its work to prepare members for future success by giving them the tools they need to overcome the challenges and grow their businesses.
What are some other big changes that you believe will make an impact this year, and what will drive them?
PB: Now, more than ever, the consumer is clearly in control and driving how and when marketers and advertisers will have access to their valuable time and dollars. With ad avoidance and blocking rates higher than ever, the promotional products industry has a genuine opportunity to work with clients and customers to design strategic programs and campaigns that deliver a real return on investment and put brands in the hands of consumers in spaces and places no other medium can touch.
As with many industries, consolidation seems to be the new normal for the promo sector. In a broad sense, what implications does this have for the promo world and its remaining players?
PB: Consolidation is indicative of a strategic growth strategy that has enabled the industry to continue growing through advancement and efficiencies of scale. This growth strategy allows the industry to evolve whether the company is big or small. These efficiencies ultimately benefit the buyers of promotional products through streamlined product and program design, development and innovation, as well as pricing.
Related story: Print+Promo's 2019 State of the Industry Report