Amazon Has Arrived, But Now What?
Like it or not, Amazon is already a player in the promo industry. There are services like Amazon Custom, which focuses on personalized products, and Merch by Amazon, which is disrupting the licensed merchandise space with its print-on-demand model. Amazon has obtained patents that indicate an apparel creation and delivery process involving fabric printing, cutting, sewing and dispatch to a buyer in one computer-controlled service. Given Amazon’s penchant for disrupting verticals, it’s worth asking: What will Amazon’s role in the industry be in a decade?

Some promo execs think Amazon will function as a search engine where industry companies compete through paid advertising. Others believe an Amazon promo acquisition is coming. “The business leaders at Amazon will eventually purchase a giant player in our industry, and continue to purchase product through suppliers,” says Kellie Claudio, senior VP of sales and marketing at Top 40 supplier Sweda (asi/90305).

Distributors expect Amazon to take a significant step into the promo market through an acquisition.

Leo Friedman, whose distributorship iPROMO (asi/229471) sells on Amazon, predicts Amazon could cut out distributors altogether. “Amazon will most likely leverage their rapidly growing business platform to offer top-selling promo products as they do corporate gifts today,” he says. “They’ll use analytics to determine what to invest resources in.”

E-commerce Is Headed Toward Market Dominance
The way Sai Koppaka sees it, online transactions will account for more than half of total promo industry sales within the next three to five years.

The CEO/president of Bel USA, parent company of DiscountMugs.com (asi/181120), a Top 40 distributor that originates all of its sales online, isn’t alone in thinking so. About 80% of respondents to Counselor’s SOI survey believe that e-commerce revenue will overtake “traditional” distributor/end-buyer sales by 2025. Currently, about four in 10 distributors offer some degree of e-commerce, ASI research shows. On average, these distributors generate 16% of their total revenue from e-sales, with the largest firms gaining the most from the web.

In 2018, only 40% of distributors sold promo products online. But in five years, distributors think e-commerce-generated revenue will trump traditional selling.

“Our customers are increasingly comfortable with ordering online and using online design tools,” says Koppaka. “I expect e-commerce transactions will accelerate exponentially as more promo companies invest in the online experience and leverage data to predict customers’ preferences and simplify the buying process.”

3-D Printing Will Disrupt the Supply Chain
Action figures, food, shoes – even a house. These are just some of the things that have been created with 3-D printing, a process that involves producing physical objects from digital models with high-tech printers.

Some promo suppliers are already leveraging the tech. When developing new stress reliever shapes, Top 40 supplier Ariel Premium Supply (asi/36730) uses 3-D modeling software. “We use our 3-D printer to make an actual model of the design, which gets passed around for review,” says Christopher Duffy, Ariel’s director of marketing. “Once approved, we share the file with our factory, which has the same 3-D printer, and they can now replicate/produce the exact product we designed.”

Distributors are optimistic about 3-D printing, viewing the technology as much more of a help than a hindrance.

Design models might only be the tip of the iceberg. Voodoo Manufacturing is already capable of producing high volumes of 3-D printed products at prices competitive with injection molding. The Brooklyn, NY-firm does work in the market, fulfilling custom orders for firms like Top 40 distributor PromoShop (asi/300446).

One day, widespread adoption of 3-D printing at scale could bring big changes in promo. “We could see a possible disruption in the current supply model of long product development cycles and the perceived need today for deeper inventories,” says Duffy. “3-D printing would let suppliers and distributors respond more quickly to end-buyers’ custom design requests.”

Predicting the Future: A Timeline

ASI editors use their crystal balls to imagine what’s ahead for promo over the next two decades.

2020

“With a presidential election looming, the U.S./China trade war will end. Import tariffs will be rescinded, leading to a less combative global trade climate. The promo industry will breathe a sigh of relief.”
— Theresa Hegel, executive editor of Wearables

2025

“At least five suppliers will post sales exceeding $1 billion, and at least two will have sales above $2 billion. One top 20 supplier will have gone out of business because of a product safety liability issue.”
— Nate Kucsma, ASI executive director of research

2030

“Prospects will be greeted with targeted ads based on changes in vital signs and moods because of health-tracking wearable technology available first at retail and then in promo.”
— C.J. Mittica, editor-in-chief of Advantages and Wearables

2035

“Consolidation in promo will have accelerated to a point where smaller, independent companies will have largely disappeared, either having gone out of business or affiliated with larger firms.”
— Sara Lavenduski, senior editor of Advantages

2040

“The live events market will be the largest sector for promo sales as younger buyers put a premium on experiences. Another top five promo market will be the cannabis industry, thanks to easing regulations.”
— Dave Vagnoni, editor in chief of Counselor