A year ago, as the coronavirus pandemic wrought major changes in lives and businesses around the world, companies on both sides of the industry doubled down to meet customers’ needs and creatively reimagined how best to retool their teams and operations.
Todd Gabel, founder and CEO of Chicago, Illinois-based supplier Toddy Gear, was watching the news one fateful day in March 2020 when the governor of Illinois announced the state was shutting down to prevent the spread of COVID-19. The next day Gabel and company president Jason Emery announced to their team of about 25 that they were being furloughed until further notice. The two then met with Viktorya Kooistra, the supplier’s director of marketing and communication, at their suburban warehouse to discuss an idea. The company had been founded on the production of a dual-sided microfiber cleaning cloth for phones, computer screens and eyewear, so it had employed people to cut and sew the cloths, and it had equipment. While those cut-and-sew operations had been outsourced to Mexico a few years back, the company still had sewing machines packed away. Gabel says, “We called one of the sewers who had been furloughed and asked, ‘Do you think we can make a mask?’”
“She said ‘Let’s give it a shot,’” Gabel recalls, so they took a piece of microfiber and bought some elastic at a nearby fabric store. “We knew we could do this,” he says. That was on a Friday and Gabel asked Kooistra to put together a guerilla marketing campaign over the weekend because, starting Monday, Toddy Gear was going to be selling masks. Kooistra and her team designed the campaign, and emails were sent to customers on Monday morning at 8 am. “At 8:05, we started getting orders,” he says, and the phone kept ringing. As demand for masks swelled, their initial capacity of about 2,000 masks a day grew to about 16,000 a day. Before long, the company had a two-month back order.
Gabel brought back all furloughed employees and hired about 90 new 1099 workers to keep up with the orders. He also bought new equipment including a high-end laser cutter and more sewing machines. Among the early orders was one for the City of Chicago for 30,000 masks. “I was driving to the United Center every other day with 5,000 masks to fill that order. It was a crazy time for us,” says Gabel.
There were so many orders coming in that the company began pooling sales commissions. “It was all hands on deck and the salespeople worked as a team,” he says. Toddy Gear went from a company with one shift to three shifts working 24 hours a day. To keep workers safe, they found a local company that sold plexiglass and built workstations to separate those working on the factory floor. Most other employees worked remotely. The company also conducted temperature and blood oxygen checks of everybody upon arrival at the factory. “We got a few COVID cases,” Gabel says, “but we had protocols in place and sent people home immediately. We followed the rules. We knew we were doing the right things. We took care of everybody.”
In time, as other suppliers began offering masks and Chinese sources lowered their order minimums, Toddy Gear’s sales leveled off, but the strategy to quickly pivot to manufacturing a dye sublimated mask (an improved version with three layers, a nose bridge and adjustable ear loops eventually replaced the original model) created a momentum that kept the company humming along and people employed during a year when the industry definitely struggled.
In the second quarter of 2020, suppliers and distributors reported sales down 78 percent compared to the same quarter in 2019, according to PPAI research. By the fourth quarter of last year, 20 percent of suppliers reported that sales decreased by up to 20 percent compared to the third quarter and 15 percent reported decreases of 20-40 percent. For distributors, 12 percent saw sales decrease by up to 20 percent compared to the previous quarter. Eight percent reported decreased sales of 20-40 percent.
Likewise, in the first half of 2020, PPAI research showed that 25 percent of companies on both sides of the industry had to lay off employees, 16 percent had to reduce work hours, 15 percent had to furlough employees and nine percent considered changes to staffing levels. Surprisingly, 35 percent reported no changes in staffing for those six months.
Many of the companies that were able to keep employees on the payroll were those whose product lines allowed them to step into personal protective equipment (PPE), including face masks, face shields and gowns, and hand sanitizer. In Q4, a PPAI study found that 43 percent of supplier sales and 77 percent of distributor sales were in decorated PPE. In comparison, 28 percent of supplier sales and 36 percent of distributor sales were in blank PPE. But making that leap from traditional promotional products to PPE took some creative strategy.
Dan Edge, national sales manager at Newark, New Jersey-based supplier Peerless Umbrella, began searching for solutions as soon as he heard the New Jersey governor was shutting down non-essential businesses in March 2020. He discovered that, as a manufacturing company, Peerless could remain open even though business overall was coming to a screeching halt. The company had to lay off more than 50 percent of its factory workers and about 30 percent of the customer service team, but Edge didn’t lay off anyone in sales. “That was something strategically I felt [I had to do]. As things were getting worse, we had to double-down and push that much harder,” he says. “I was able to secure everyone on the sales side. I told them, ‘It’s on our shoulders to turn this thing around as quickly as possible.’”
He says business had picked up strongly by May 2020 because a big part of the company’s business is patio and restaurant umbrellas. As dining establishments started reopening and moving diners outdoors, there was a huge demand for the umbrellas. “Umbrellas were our hand sanitizer,” he says. “We were over capacity with orders and in employee bring-back mode—we were back at 100 percent in our customer service team by summer.”
Peerless also introduced face masks, playing off its expertise in producing domestic sublimated bags. The idea came to Edge at one day at 3 am early on in the pandemic. He thought about how to convert the sublimated bag process to make masks, and spent the entire next day researching masks, templates and how to make them. On Monday, he approached his production team and Peerless was on its way into PPE. “That was a really important item for us and still is,” he says, “because it got people working again.” He says the company plans to remain in the mask business, at least through the end of this year or as long as people want to buy them. He’s also seen his patio and restaurant umbrella business kick off earlier this year—in late February. Indoor dining capacity at restaurants in New Jersey and New York is limited to 35 percent at press time, and Edge thinks that and the fact that people just enjoy eating outdoors will create more demand for Peerless umbrellas this year.
During April and May 2020, Peerless employees worked in teams where they alternated being in the office and working at home. By June 2020, most were coming back to the office regularly although most employees still work from home one day a week.
From May 2020 through year-end, the company remained busy. “A lot of that was having the right products combined with our marketing efforts,” Edge says. “I figured this was our chance and we had to be as aggressive as possible. My marketing team went into overdrive.” They focused on the next trends and what people needed at home including introducing a backyard vacation assortment such as hammocks, sports chairs and the like. “It got people working again and that was my goal,” says Edge.
He adds, “We learned so much about ourselves; personally I learned so much about myself, including what I had to do to keep people motivated. I was so concerned about everyone’s mental health—that’s real.”
Because he could not do the usual team-building activities, such as go out for Happy Hour or bring pizza into the office for lunch, he looked for workarounds. Now, every Friday at 4 pm he brings a rolling cooler into the office and invites everyone to enjoy a beer to finish off the week. He didn’t know if that simple gesture would make a difference, but several employees said how much they appreciated it during performance reviews in January. He also put together 45 swag kits for employees containing Peerless-branded promotional items (some from other suppliers) including an Igloo cooler, a Bluetooth speaker and a personal letter. “People were so appreciative that we were recognizing their efforts,” says Edge.
Looking back over the past 12 months, he says, “In a weird way, from a business sense, it was the worst of years and the best of years because there were a lot of lessons learned last year that we’ll continue to act on.”
Adam Campbell, MAS, operations manager for distributor North Georgia Promotions, a small, family-owned company in Alpharetta, Georgia, kept the company’s doors open throughout 2020 by making clear and regular communications a priority with the eight-person staff and being honest with them. Early on, Campbell, who has been with the company for three years, committed that he would do his best to keep them informed as he and the owners made some tough decisions, including laying everybody off for a couple of months in early 2020, but he helped by filing partial unemployment claims for them. “When the pandemic hit, everything just stopped,” he says. “It was scary.” He did a lot of research into the Georgia Department of Labor and learned how to file partial unemployment claims for those employees. Under the unemployment claims, employees cannot turn down work if the employer offers it, he explains. He told the team he would give them 24 hours of notice if they needed to come in, but he worked to accommodate their schedules as much as possible while abiding within the law.
“They felt we were looking out for them and I think that carried over into their passion [for the company],” he says. “When I’d call to ask if they could come in, they were only too happy to get back to work. The communication we had with employees ahead of time, letting them know what was going on, made them more willing to work with us through this pandemic. Whatever it took, everybody pitched in.”
As a result, he did not lose any employees during that period. “They were grateful to know there was a job to come back to. I look at our employees as our company’s biggest asset. We tried to do what we could for them.”
Campbell also filed for a Paycheck Protection Program loan that allowed him to bring back five full-time employees as business began to pick up, and he took advantage of the Employee Retention Credit. However, the team is still down a couple of people because it’s tough to find good hires in his area right now, he says.
There was no option for working from home in this hands-on distributorship, so everyone works in the facility but wears face masks and has their temperature checked every morning. “Being so small, if we get someone out sick, we’re in trouble,” he says.
Team members are cross-trained and wear a lot of different hats at the 10-year-old company that provides embroidery on apparel, backpacks, blankets and similar pieces, as well as screen printing on t-shirts and sales of hardgoods. The company got into selling face masks in a small way and they chose to sell masks they had personally tested and liked. Campbell says their embroidery work has remained steady because most of it is corporate wear, but their screen-printing business dropped off because no one was doing big events last year. “We’re slowly starting to get more of those now but not the big events like races yet,” he says, adding that January and February are always slow months for the company but he’s optimistic about the year. “We’ve tried to watch what we’re doing,” Campbell says. “We told our people that we were making very careful and calculated decisions so they would have a job to come back to.”
Coming off a good year in 2019, Dan Mendelson, president of distributor Unitex Direct in Walled Lake, Michigan, signed up to exhibit at 12 client-focused trade shows set for the first quarter of 2020. In his 28 years in business, he had found exhibiting at shows to be an effective way to talk with potential customers and create awareness for his company that specializes in supplying and inventorying security uniforms. He had gotten through seven of the shows by March 2020 before the pandemic caused the remainder to be cancelled.
Soon after the governor of Michigan closed the state, Mendelson realized his business was going to take a hit and he needed to reduce his team of eight. The three positions eliminated were in customer service and warehouse operations, but by June business had picked up again and he brought one person back part-time and reinstated that person to full-time in July. He’s still two employees short of where he was early last year and although business is picking up, he says it’s not yet enough to bring back additional staff.
Mendelson explains that some of the markets for security apparel were actually booming in 2020, such as hospital security, but others were not buying at all, such as retail store security. “Those parts of the economy that became difficult caused our customers to slow down their business. They stopped hiring and needing uniforms, but I had some pockets of customers where business was bigger in 2020 than in 2019,” he says.
In late summer, as business was picking back up, he started giving a percentage of profits to employees as a thank-you for the extra work they were doing. “I didn’t want to just raise their salaries,” he says. “I figured if I was having a good month, I wanted to share it.”
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
2020 second quarter:
Suppliers and distributors reported sales down 78 percent compared to the same quarter in 2019.
2020 fourth quarter compared to the third quarter:
Suppliers: 20 percent reported that sales decreased by up to 20 percent, and 15 percent reported decreased of 20-40 percent
Distributors: 12 percent saw sales drop by up to 20 percent, and eight percent reported decreased sales of 20-40 percent
2020 fourth quarter:
43 percent of supplier sales and 77 percent of distributor sales were in decorated PPE. In comparison, 28 percent of supplier sales and 36 percent of distributor sales were in blank PPE.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
While many small distributors stayed afloat through the pandemic by being nimble and resourceful, the industry’s largest companies navigated their way by employing careful strategies and digging deep into their resources, specifically people.
Distributor HALO Branded Solutions employs more than 1,000 people across the U.S., with nearly 500 working out of company headquarters in Sterling, Illinois. During the early months of the pandemic, in March and April 2020, the company implemented a combination of layoffs and reduced hours. As the business climate improved in late summer, the company was able to return all of the staff to full hours and gradually bring back almost all of the furloughed employees.
“We’ve always tried to right-size the business and it’s that way whether it’s growth or constraint,” says Dawn Olds, MAS, senior vice president of operations. “I have a set of metrics on efficiency and transaction volume that makes it easier to be precise, whether we’re growing the team or reducing it. Back in March and April [2020], we reduced hours so we could keep as many people as possible.” Depending on who their customers were and what industry they were in, some sales teams were very busy while others were stagnant. “We had some sales teams in telecom and distribution—and last summer everyone working in telecom was in high demand. If you were in those kinds of businesses, you were super busy. We monitored where the demand was and responded accordingly.”
While most of HALO’s field sales support staff has always worked remotely, the post sales staff—customer service, order processing, billing—are used to working in an office. Olds says the biggest work impact on them was finding ways to work remotely. “There was a little transition when people started working at home, learning Zoom and setting up their workstations but after that, the metrics popped when I looked at their productivity and efficiency. We were really focused on the buying experience for customers. We were able to achieve that without disruption, so I was really proud of the team. They were very innovative and looking outside the box on how they could support customers in the way customers expect,” Olds says.
She says the company looked at essential workers who needed to be at headquarters versus those who could work from home. The mailroom person, the receptionist who answered a general phone number and the warehouse manager and his staff, who also handle fulfillment, had to be in the office the entire time but those workers split their shifts to come in at different times to maintain more social distance.
The company follows the CDC and state guidelines on how many people can be in the office. At press time, it was no more than 50, unless they are essential employees—like the fulfillment team. As far as when headquarters might reopen to all employees, Olds says that if employees can work at home, they will do so for now, but she wants to return to the office as soon as possible. “I definitely see myself going back to the office,” she says. “I’m too much of a people person to be working at home but I do see an environment where people could work at home if they choose to. We’ve found that people can be very efficient and very productive working at home.”
She adds, “If there’s a silver lining, it’s how staff and leadership have found new, creative ways to connect when physical barriers kept the team from doing so in person. Everyone found their own way to keep the HALO family connection going.” As an example, she says the team always had a potluck meal together during the holidays but in 2020, they shared recipes and sent photos of teammates trying out the recipes with their families. “It really carried our whole community forward and I think these things will continue after the pandemic subsides,” she says.
Working and connecting remotely are skills Amy Roller, MAS, hones daily in her role as sales support manager at HALO. From her home in Kansas City, Missouri, she and her New York-based counterpart, Mae Lincoln-Kass, are responsible for managing the needs of 150 sales support people located across the U.S. “When we had to close our offices nationwide, it was not too much of a change for us because a large portion of our team was used to working remotely, either all of the time or at least portions of the time,” says Roller, who’s been in the industry for 22 years and with HALO for five. She and her team use online tools like teleconferencing, webinars, internal team email and Instant Messenger daily. The company’s new employee orientation and training programs have always been online along with an extensive library for internal systems and policies.
Sheer growth was a strategy Los Angeles, California-based distributor BAMKO used to get ahead of any downturn brought on by the pandemic. The company recently reported that it grew top line sales in 2020 by 88 percent. A large percentage of that growth was in PPE, but sales also grew in traditional promotional products through efforts focused on industries identified as less impacted by the lockdowns such as the gig economy and food delivery services.
As a result, BAMKO’s workforce of about 300 is significantly larger than a year ago. “We’ve brought on a number of large accounts in the past year, so we’ve had to bring on project managers and account managers to help us with that program business,” says Joshua White, SVP of strategic partnerships and general counsel. “We were responsive and proactive about not waiting for things to come back. We saw that the business climate was changing around us, and we looked for where the opportunities were and gave our sales team the tools to win those accounts. We went out and asked people for their business—and a lot of times they gave it to us.”
To help position the company to be able to power through what looked like a very difficult year ahead, BAMKO’s management team voluntarily took a 10- to 20-percent pay cut early in 2020 that lasted through year-end. This allowed them time to see how business was going to play out before making any staff reductions. By the time they had to make a decision about the rest of the team, the company had done enough business in PPE to ensure that downsizing would not be necessary.
“For a $200 million company, we are wildly entrepreneurial,” says White. “We were really consistent about experimenting in an entrepreneurial way. We had humility to admit when what we tried didn’t work and we stopped doing it. And when something worked, we did more of it. We were quick and agile and ran experiments in different segments with different marketing and different products.”
White also says the company is unique from technology, warehousing and sourcing perspectives, with 35 employees in Southeast Asia who provide independent sourcing. BAMKO also has its own software, order processing and order management platform called CORE, an internal, proprietary system that manages every aspect of the business from an order quote through completion of the business and delivery. It allows all employees access to information and to collaborate with anyone in the company across the globe on any project. As a result, when the lockdown required employees to work from home, it did not necessitate a big adjustment. “We had more than a half-dozen offices in California, Chicago, Denver and other places, and people just moved home—it was the least disruptive move you can imagine, because we were just set up to do that,” White says.
While managing the lockdown from an infrastructure and technology standpoint was fairly easy, White admits it was much more difficult to manage from a people perspective because of the personal challenges people were going through. “Just because the business was doing well and the software worked well, that doesn’t mean that someone who is isolated, lonely and lacking a social connection is doing well,” he says. “One of the things we did well was to take stock of the emotional realities that our employees were confronted by.”
He uses himself as an example. White had recently relocated from LA to Austin, Texas, and was in lockdown alone in a new city, but he says his work and colleagues were a constant source of energy, connection and stability. “I spent a lot of time with these people on Zoom calls talking about marketing. We became a more cohesive bunch. Everyone was going through something equally challenging and it was important to feel that shared direction and purpose. As success played out over the year, there was more exuberance and gratitude being part of that team.”
It was an emotion many people shared, and as a result, White says the company’s culture has become more cohesive.
Like many employers over the past year, BAMKO put a lot of time, thought and effort into creating ongoing connections with employees. The company regularly sent out work-from-home kits with products like a custom calendar, scheduled virtual events and brought in guest speakers.
“BAMKO has always been a global company with people collaborating across borders and time zones,” he says. “We were very well situated for this type of thing. Still, last year wasn’t just a pandemic—which was a massive, destructive force that tore people’s sense of social connection apart—but we also had racial justice protests over the summer, the election. Every person had their own set of challenges. It was tough to manage that. We had to do the best we could to give people a sense of connection and let them know they weren’t alone.”
This year, the company is continuing to strategically position itself for growth with a goal of 12-percent organic growth in promotional products, which would be a new record. In February, it completed the acquisition of Gifts By Design, a Seattle, Washington-based distributor specializing in corporate awards, incentives and recognition programs. “We think the employee gifting and corporate incentives market segment is permanently altered by what happened in 2020 and work-from-home is going to be a permanent fixture in the corporate world,” White says, “and we want to be really good at that.”
* Online Bonus Content *
Supplier Maple Ridge Farms’ senior management team was out of town at a conference when COVID suddenly hit the U.S. last March. One conference attendee called his office to learn that $50,000 in orders had been cancelled that morning and that was just the beginning of bad news. The final speaker at the conference was a woman from Hyatt hotels who shared that in the past 48 hours her company had $1.5 million in bookings cancelled at their local hotels.
The Mosinee, Wisconsin-based group had planned to spend that afternoon relaxing at the pool but instead they gathered to develop a plan for what was sure to be a tumultuous year. “Back in Wisconsin, we immediately planned and budgeted for a 20- to 40-percent decrease in sales,” says EVP Jodie Schillinger. “We had an open meeting with the entire Maple Ridge team to talk about options, which included voluntary layoffs, reducing expenses, reviewing our relationships with our vendors and early implementation of our summer schedule working only half days on Friday.”
Within a short period of time, the company started to see a strong uptick in sales, mostly in gifts for employees who were being asked to work from home. “While this added business was a pleasant surprise, we were still well aware that approximately 85 percent of our business is generated during October, November and December. It was difficult to project what those months would bring,” says Schillinger. “We needed to be prepared for that 20- to 40-percent drop in sales that we had anticipated in March.”
As it turned out, the year was far better than the management team could have ever imagined, with a strong double-digit increase in sales, but 2020 was not without its challenges. Nearly half of the office staff needed to work remotely to maintain COVID restrictions—an entirely new challenge for this food gift supplier.
“Necessity is the mother of invention. Creating a plan quickly and learning and embracing new technology taught us to become extremely lean, which further reduced some expenses,” explains Schillinger. “Our seasonal workforce, upon which we are very dependent, dropped by 25 percent because many seasonal workers just preferred to sit out this season. This worker shortage required us to work every Saturday and Sunday from early November through mid-December.” The company also put in place a very stringent COVID policy and adhered to it in order to keep the community, customers and team members safe.
Despite management’s best efforts, Schillinger admits that maintaining their culture during those difficult times was challenging. “However, we became creative and still hosted our team-building events in a very COVID-centric manner.”
She also says that like many other industry suppliers, Maple Ridge Farms was also forced to battle through supply chain shortages, which made scheduling production very difficult.
Despite all the obstacles though, Schillinger feels very fortunate. “All of these challenges required us to strategize, collaborate and move forward with a new pattern of thinking. We are where we are today because of what we learned from these opportunities and challenges.”
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Tina Berres Filipski is editor of PPB.
