As your new chair, I have the privilege of being your guest columnist in six upcoming issues of our industry bellwether publication, PPB.
If you have attended The PPAI Expo or any recent industry events, no doubt you’ve heard President and CEO Paul Bellantone, CAE, speak of our industry as one that must have “the confidence to evolve.” I could not agree more. Your PPAI board, the regional associations, and hopefully the membership, also agree.
This year we will be embarking on the creation of our next strategic plan. Fortunately, with hard-working staff and volunteers, we have a solid base from which to build. Membership is growing and we are financially strong. Expo continues to be the marquee industry event and surveys indicate that we maintain a high level of trust and respect from our members. It’s a trust with a foundation we earn by doing the right thing not only every day, but for the long term.
Key elements of the prior plan, such as driving member value, being an advocate for the industry and managing an efficient and progressive organization, will continue. However, recognizing the number of changes we face, a Strategic Foresight Committee, comprised of suppliers, distributors and business service members, was formed to anticipate the ever-changing industry and business landscape. We are excited at the prospect of continuing to move forward in the face of the most rapidly changing environment any of us can remember, and business historians will no doubt confirm.
The Strategic Foresight Committee has discussed and vetted five areas of focus: 1) Maintaining growth amidst a changing industry profile; 2) State and federal regulations that pose an additional burden for distributors and suppliers; 3) Sustainability, the environment and how it impacts new buyers; 4) Technology and business process connectivity, including the role of Promo Standards; and 5) Diversity and how we embrace all potential members who seek to be a part of our industry.
In this article, I have chosen to discuss the first area: maintaining growth amidst a changing industry profile.
We are seeing a bimodal industry develop comprised of very large companies, $1 billion-plus suppliers and soon-to-be $1 billion-plus distributors at one end, and distributors with sales as low as $15,000 at the other. Three percent of distributor members account for 50 percent of sales, with the balance of sales, $12.5 billion, in the hands of more than 15,000 smaller distributor members. We need to make sure we address both sides of this dynamic.
We also need to maintain access for all who want to join the industry, seeking out supplier newcomers that add different products and processes, and distributors that have new ideas on how to grow their end-users’ brands. In the near term, the need to stress consultative sales will be key, recognizing there will be distributors who will also focus on online sales to grow their businesses.
We must also recognize a different type of buyer who is more likely to do business online and 24/7. How do we engage that individual in a meaningful way, while maintaining creativity of programs that can’t be managed with a “click?”
Private equity money plays a larger role, yet family businesses and single proprietorships are still the backbone of PPAI’s membership.
The promotional marketing industry is a $75 billion-dollar industry when you include the incentives and sales promotion industry as well as the adjacent apparel decoration business, trophies and awards, and print industry. The crafts industry (think Etsy marketplace) may play a part in our future for new members. Who knows how Instagram and Facebook will impact how we do business? Amazon is already affecting how we conduct business and will continue to do so.
Distributor opportunities in global markets and supplier dependency on China will also affect how we do business. Will a nascent domestic manufacturing business evolve? What new services will distributors develop to grow their businesses?
How do we maintain the strength of regional associations as part of the industry infrastructure?
These are only a few of the many challenges and opportunities we face and intend to address with specific tactics in PPAI’s new plan.
Look for promotional products to grow in use and PPAI to continue helping to strengthen the industry and members’ success through a robust, engaged membership. You have played a big part in our current success and I urge you to participate in any way to spread the power of promotional products, stay on top of marketing trends and assure our future success. It’s all about the confidence to evolve.
We look forward to your participation, input and ongoing support today, in 2020, and well beyond.
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Ira Neaman, CAS, will become PPAI chair at the conclusion of The PPAI Expo in January.
