Keep Shoveling. We’re Getting There.
Tuesday February 23, 2021 | Filed under:
It’s been a long winter for much of the country, and that’s entailed a lot of snow shoveling. When you first get out there, the task can seem insurmountable. But soon, you find a rhythm and before long you’ve cleared a path. That’s how I feel about the promo industry’s collective performance in 2020. When COVID-19 struck, promo pros could have chucked it and quit. Instead, the industry got to shoveling.
Last year, distributors’ sales still declined 19.8%, on average, according to ASI’s recently released Distributor Quarterly Sales Survey. However, that’s a remarkable improvement over the dramatic 45% year-over-year decline in Q2 and beat mid-2020 forecasts calling for annual plunge of about 35%.
With end-markets our industry sells to reeling or hibernating, promo clawed back business late in Q2, Q3 and Q4 by pivoting to sell PPE. Without that lightning-quick shift in focus, distributors’ sales would’ve plummeted 43% year-over-year in 2020.
But promo’s hard-forged path back from the depths of Q2 was not all about PPE. As the year went on, industry firms prospected for -- and found -- channels of business for sales of traditional promo products, too.
Especially notable, the industry provided kitted/drop-shipped solutions en masse to clients’ end-users who were working from home or attending virtual events. Let’s commend the logistical dexterity and creativity many suppliers displayed in coming up with uniquely packaged, poignantly messaged solutions.
The drop-shipping/kitting collaboration really bore fruit in Q4, powering end-clients’ holiday season gifting, with a nearly 30-percentage-point improvement over Q2 2020.
And, equally important, everyone started feeling more optimism, with the Counselor Confidence Index, which measures distributors’ financial health and optimism, rising to 85, up from an all-time low of 54 in Q2. That’s progress – more snow shoveled off the driveway.
The pandemic didn’t end when the calendar turned to 2021 and substantial challenges remain. Supply chain issues related to skyrocketing shipping costs and lack of shipping containers may lead to price increases amid inventory challenges. Some distributors report that end-clients have been hesitant to spend in Q1, unsure what the year will bring.
Yes, it’s still winter.
But…spring isn’t far off. Vaccines are cause for hope that “normal” might begin to return by summer. Clients across industries emerging from the pandemic should be eager to market themselves and, as ASI’s Global Ad Study proves, affordable, effective promo products will be increasingly attractive to businesses with limited budgets.
In short, it’s going to get better. It is getting better. Every shovel load we heave, together, is one step closer. Keep shoveling.