Print+Promo 2020 State of the Industry Report: A Closer Look at the Promotional Products Sector
Print+Promo remains committed to providing the best news and resources we can for you during these unprecedented times. For Print+Promo’s 2020 State of the Industry Report, we dug deep to measure print industry health, learn more about the major issues currently affecting the print industry, 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 Philip Koosed, president of BAMKO, Los Angeles. Find out what he had to say about the current state of promotional products, recruiting young talent and the threat of online retailer giants.
What are your thoughts on the current state of the promotional products industry? What would the theme of 2020 be for you?
Philip Koosed: I think generally there’s an issue with short-sightedness. Whether it’s the short-term perspective of private equity or simply staying stuck in the past instead of investing in a vision for the future, I think much of this industry is languishing in a short-sighted view of how our world should be. Our thematic focus for 2020 and beyond is two-fold: one, technology; and two, elevating the role of branded merchandise as an advertising medium. We’ve made no secret about the fact that BAMKO is committed to leading the way for the industry by continuing to lead with technological advancement. We think it’s important to pair our technological leadership with a commitment to being thought leaders about the power of branded merchandise. Too much of this industry is stuck in a small-minded way of thinking about the power of what we do. We want to continue to innovate and demonstrate the incredibly effective advertising tool that we have to offer when done thoughtfully and with intention. We need to keep some of the specifics tight-lipped, but we are trying to go where no other distributor has gone before.
We have a team of more than 50 of our own programmers who are working on the technological backbone of our business. All of the software that runs our business internally are proprietary platforms we built from scratch that are custom-tailored to our business. These days, our future focus is skewed toward the development of supplier integration platforms, complex integrations with customer technology platforms, automation of tasks that will give us speed and efficacy advantages, deployment of artificial intelligence tools, and the development of machine learning capabilities that we think have the potential to change how this industry operates.
In spite of record low unemployment, do you feel that finding the best talent, in general, is a challenge? Are there certain roles in your business that have been difficult to fill, as seasoned employees near retirement age, taking specific skill sets with them?
PK: We take a very different approach. We start by focusing on creating a culture that attracts very talented people who have lots of options to work in many different industries. By creating a great work environment, we attract the most talented people we can find, regardless of location or past industry experience. Hiring supremely talented people results in a team that does exceptional work. Being known for doing exceptional work helps us attract other talented people. So, I think we have a much easier time than most companies in our space at finding good talent, but it starts with looking at who we are and making BAMKO the best place to work that we possibly can.
We attract a certain type of person who wants to be at a place like BAMKO that will push and empower them to become the best version of themselves in all facets of their life. We start by being very clear and intentional about our culture. We talk a lot about how that shapes up and how that affects the way we interact with the world around us. By being so clear and specific about who we are and what we believe in, we attract people to us who are hungry for growth. People who are willing to be challenged and pushed outside of their comfort zones in the drive to become better. Those types recognize that who you surround yourself with matters, and they choose to be in an environment that surrounds them with others who are driven by a love of growth and who will encourage those around them to relentlessly pursue their best self.
With initiatives like Merch by Amazon, Amazon Custom and Merch Collab, what level of threat do you think the online retailer giant poses to the promotional products industry, now and in the future? Is your company making any investments to get ahead of technology waves?
PK: For BAMKO, it’s not a significant threat because of our resources and how we sell. We’re much more insulated from the impact of these platforms than most. Our customers look at us as much more than just a company to buy merchandise from. They’re relying heavily upon us for technological solutions, effective marketing campaigns and a retail-caliber design aesthetic. We have made, and continue to make, massive investments in technology so that we can continue to be something very different in this space. We are very much a technology company, first and foremost, and will continue to evolve in that direction. It’s one of the major competitive advantages we have of not being private equity-backed and being able to take a long-term view toward infrastructure and investment.
That said, I think there’s a huge tidal wave headed for most distributors and nearly all of them are entirely unprepared. The folks out there who don’t have the resources to do a lot more than just sell product, I think a great deal of them are going to be washed away. Even the bigger companies in our space who have little value to add other than just being a middleman for branded merchandise are in a world of hurt.
What is your best tip for winning over price buyers and differentiating your business from “cheaper” competition?
PK: Don’t be a price seller. If you have nothing else to offer your customers than the same product that your competitors are selling, you are competing on price. We don’t do that. We bring so much more to the table that the product itself ends up being almost an afterthought in most of our bids. When that is not the case, the key is to have such a good relationship with the customer that price still doesn’t matter. We do that by freeing up the time of our sales reps so that they can spend as much time as possible working on relationship development. We want them spending time getting to know their buyers, not doing administrative work. It’s a major point of differentiation for our sales reps.
What are some other big changes that you believe will make an impact this year, and what will drive them?
PK: I think coronavirus will have an impact on the entire supply chain this year ... for months, possibly more. I think people don’t fully understand just how interconnected our modern supply chains are. There are countless interwoven parts that each is dependent on other pieces upstream. Component parts manufacturers, raw material suppliers, transportation infrastructure, QC and testing—all of these pieces need to come together in unison in order for things to get made. There’s more to manufacturing than just having a bunch of workers showing up to a factory. People and things need to flow constantly to and from those factories. As measures are put in place to limit the spread of coronavirus, the free movement of people and things is restricted. That limitation on movement has and likely will continue to have significant downstream effects on all sorts of supply chains in many different industries.
I don’t expect to see more tariffs or much disruption from the China trade war before the election in November. I think Washington [mostly] will stay out of the way this year and try to keep things as smooth as possible through the end of the year. Whether that effort is successful is anyone’s guess.
Please note: News about the novel coronavirus is changing quickly. As we finalized our 2020 Print+Promo State of the Industry Report, there were different statistics compared to when you are reading this, as forecasts did not account for COVID-19’s profound effect on the economy.