As the United States deals with more than 33,000 confirmed cases of coronavirus and 400 deaths, the new reality for promo firms for the indefinite future is one of work-from-home policies and creative marketing pushes as sales plummet.

An industry survey fielded this week by Nate Kucsma, ASI’s executive director of research and corporate marketing, found that 73% of distributors and 67% of suppliers expect a year-over-year decrease in orders this month. Among distributors, the industry’s health rating fell from 7.27 in January to 5.39 in March.

Usually packed with thousands of people, New York City’s Times Square is virtually empty after the mayor ordered all nonessential businesses in the metropolis to close.

Some of the hardest-hit areas of the country are on the coasts. In New York City, there are almost 2,500 cases across the five boroughs and more than 4,100 in the state. A move to order city residents to “shelter in place” could be in the works, according to NYC Mayor Bill de Blasio, though Gov. Andrew Cuomo has rejected the possibility; 7 million residents in Northern California, including San Francisco, are now under that order and are required to stay home.

‘Uncertainty Is Very Scary’
New York City-based Axis Promotions Powered by HALO (asi/356000) sent all employees home this week. “For those who don’t often work from home, it can be unsettling,” said President Larry Cohen. “They’re not among people, and they’re not interacting. Our suppliers are in good shape, but it’s a wait-and-see situation. They might have to slow down or shut. One day they could be open, the next they’re closed because their warehouse is rampant with virus. We just don’t know.”

Meanwhile, the city’s public school system, the nation’s largest, is closed until at least April 20 and could be shuttered for the rest of the school year. Cohen said that will definitely impact employees’ productivity as they work from home. “Our order count is down definitely, but we’re still getting requests,” he said. “It’s not like everyone went home and now they can take two weeks off. If you’re an event planner, you might not be planning much, but a marketer still has to market to clients.”

New York City’s school system — the nation’s largest — to be closed until at least April 20 due to coronavirus concerns, NYC Mayor de Blasio says, adding that “we may not have the opportunity to re-open them” this school year.https://t.co/6OnXGXe2tB pic.twitter.com/Sovsh7SEum

— NBC News (@NBCNews) March 15, 2020

Earlier this week, the Commonwealth of Pennsylvania ordered all nonessential businesses and government buildings to close at least through March 27. “Everyone at Pop! Promos is working from home,” said President Sterling Wilson, regarding his Philadelphia-based company. “Fortunately, we’ve been preparing for this for several weeks. We’ve received an exemption for our shipping department, which will continue to ship orders on time and as scheduled.”

In California, public schools will likely remain closed for the rest of the school year, said Gov. Gavin Newsom. While businesses have not yet been ordered to close in Los Angeles, home to Top 40 distributor PromoShop (asi/300446), Mayor Eric Garcetti strongly encouraged people to work from home.

Breaking: California public schools will not open for weeks and possibly not until summer, Gov. Gavin Newsom says https://t.co/SpVPHT5RtU

— Los Angeles Times (@latimes) March 18, 2020

PromoShop president/owner Memo Kahan made the decision last week to institute a virtual work policy. The company had prepared to make such a move, and so far things have transitioned smoothly. But Kahan said they’re already feeling the sales pinch.

“Business has definitely taken a hit,” he said. “We’re monitoring everything closely and becoming dependent on our friends and colleagues to learn patience and best practices. We’re communicating as much as possible and will continue to do so.”

Top 40 distributor BAMKO (asi/131431) sent all employees home except warehouse personnel for the time being, with plans to work virtually for the weeks and even months ahead, and any travel must have express approval from the CEO. Since the company has spent the last few years building technology systems that facilitate global business, the transition to remote work has been smooth.

“The biggest focal point of this adjustment has been the emotional realities of our employees,” said Josh White, general counsel and senior vice president of strategic partnerships. “Uncertainty is very scary. We want to help remove some of that by offering them clarity, honesty and transparency. This isn’t just about business. We think it’s important that we acknowledge and take great pains to understand how our team is feeling as this situation unfolds around them.”

Frank Cardenas, marketing manager at Beck & Call (asi/135151) in Pasadena, a suburb of L.A., said they’re trying to keep operations as normal as possible. “No employees are traveling at this time, and some personnel are working at home in an abundance of caution,” he said. “No one has shown any symptoms, but we’re monitoring the situation and continue to take orders and fill them from unimpacted suppliers.”

It’s a similar situation at supplier MVP Sportswear (asi/68324) in nearby Van Nuys. “We’re still open and up and running as usual,” said President Helen Karapetyan. “We can’t think too far ahead, so we’re just going day by day.”

Suppliers have continued to send updates to the industry regarding operations levels. Gary Schultz, CEO of Top 40 supplier Edwards Garment (asi/51752) in Kalamazoo, MI, said workers will continue picking, packing and shipping inventory that arrives daily, and they’ve instituted extensive sanitization measures in their facility. Some employees are working from home, and territory managers will be limiting travel for at least the next month.

It’s a similar situation at Top 40 supplier Cutter & Buck (asi/47965) in Seattle. In a notice this week, CEO Joel Freet emphasized that no employee has tested positive for the virus and no one will go without pay. In addition, extensive sanitizing measures have been enacted and they’ll continue to fill orders within their standard turn times.

“As we combat this pandemic together, our thoughts and prayers are with those stricken in the U.S. and around the world,” said Freet in the statement. “[I’ve] never been prouder in my 21 years to work for such a values-focused company. Our values are guiding our response to the outbreak and our promise to conduct business in the right way has never been stronger.”

Top 40 supplier IMAGEN Brands, the parent company of Crown (asi/47700) and Vitronic (asi/93990), sent a notice out this week listing efforts to keep their workers safe while continuing to serve customers. They're ensuring social distancing with color-coded manufacturing zones and staggered breaks, sanitizing work areas according to CDC guidelines and encouraging employees to stay home if they feel ill or need to care for a family member.

“Our Executive Team is meeting daily to review the IMAGEN Brands Infectious Disease Outbreak Response Plan and will evolve as is required,” said President Paul Lage in the official statement. “We will remain nimble during these uncertain times to mitigate the impact. Currently, IMAGEN Brands has no delays in production. Should the production status change, we will communicate in a clear and transparent manner.”

Showdown Displays (asi/87188) in Brooklyn Center, MN, outside Minneapolis, has sent employees home to work remotely and has asked them to self-quarantine if they exhibit flu-like symptoms and contact their health provider. As of March 15, no employee had tested positive. The company has prohibited all employee travel, client visits and employee meetings, and has instituted cleaning measures, but plans to continue serving clients with minimal disruption.

We’re taking a proactive stance to ensure business continuity while keeping our employees safe: https://t.co/27GQR1SqRr pic.twitter.com/CJdzXadLW0

— Showdown Displays (@ShowdownDisplay) March 18, 2020

A Big Impact on Business
As the threat grows and stricter health measures are put in place, distributors say they’re already deeply concerned about these next few weeks and the impact on their businesses. Alan Arnopolin of Creative Promotions, Inc. (asi/170711) in Prospect Heights, IL, said orders have stopped and he doesn’t expect to receive more “for a long time.” Wayne Yeaw, president of Alpha Omega Print (asi/119192) in Pleasanton, CA, has closed his business for the next three weeks.

Sue Wainio, owner of Uniform Solutions Plus (asi/348311) in Lakewood Ranch, FL, said her company, which specializes in school and team uniforms as well as event-based products, has never been impacted like this in the 11 years they’ve been in business. “With school and sports canceled, we’re looking at zero revenue for the foreseeable future,” she said. “We’re using the time to get updated and organized for (we hope) the new school year in August. We’re working on inventory issues, website and systems upgrades, and marketing ideas for when we’re able to come back. We’re also going to research and act upon any Small Business Administration or other agency programs that’ll help with cash flow in the future. We want to come out of this on the other side in the best shape possible. We’re keeping the faith as best we can.”

Duane Svec, president of Svec Promotions (asi/183650) in Omaha, NE, said his three-person staff is working mostly from home while he’ll remain in the office as long as possible. “It’ll be a struggle to keep paying employees as the weeks and months go on,” he said. “I keep telling everyone to stay healthy. It amazes me how much more friendly and human people seem to be towards each other.”

Travel restrictions and event cancellations have impacted not only commuting, but also client relationships. In an industry built on face-to-face interaction, it’s been particularly devastating, said Joe Davis, national sales manager at ModernLine (asi/65910) in Clearfield, PA. He’s the only sales rep at ModernLine, so he does the vast majority of travel to shows and clients. He was planning on attending the ASI Roadshow in Southern California this week, and then would have been on the road for four of the next six weeks. All those shows have been postponed or canceled.

“On the way I usually try to visit clients and prospects, but social distancing has made that impossible,” he said. “My contributions to our business mainly come from being on the road and introducing people to what we do. It’s a crippling and helpless feeling when that’s been called off for at least the next month. And we don’t know when everything will be back to normal.”

According to news reports in Ohio, Totally Promotional (asi/168375) will let 150 employees go through June 15, including temporary, voluntary and permanent layoffs. “The restrictions put into place by the federal government in response to the coronavirus pandemic have greatly affected the promotional products industry,” Brad Stultz, director of human resources, told The Lima News. “The order to limit gatherings to less than 10 people has been detrimental to event-driven businesses such as ours. … We look forward to returning to a full workforce after officials lift the restrictions currently placed on events.”

Finding Creative Solutions
Cohen at Axis said his team is working with suppliers to put together sensitive marketing campaigns that don’t risk coming off as tone-deaf given the gravity of the situation. “It’s weird at the moment,” he said. “Right now, people are home just trying to figure things out, and you don’t want to be like, ‘Hey! You can do XYZ with this product!’ We want them to focus on two weeks from now, not tomorrow. Our clients know that once this is over, they need to get their customers back and engaged. So, we want to focus on what we can control, like spec samples and marketing decks.”

Seth Needham, commercial sales rep at KEY Apparel (asi/64632) in Fort Scott, KS, said suppliers and their distributor clients are certainly “feeling the pain” during what’s normally the busy spring sales season. But he’s decided to make the best of the extra time spent at the office by implementing a free spec sample initiative for clients. Distributors can send in an end-buyer logo and/or name, the team either embroiders or prints it on a piece of apparel and then ships it to the distributor with end-user-friendly sales material. The distributor can then mail the apparel and the letter to their customer. There’s no charge for the service, not even for shipping.

“It allows them to continue to show products even though they can’t physically meet,” said Needham. “They can maintain the relationship with their client because they’re able to gift them with a nice personalized shirt, jacket or sweatshirt. This is a service that Amazon isn’t offering.”

The Riviera Towel Company (asi/82647) in Santa Barbara, CA, suggested a similar idea this week via a marketing email – they’ll dropship towels to distributors’ clients with personalized tags to remind end-buyers that “sunnier days are ahead.”

Meanwhile, Desiree Colonna, CEO of Inkwell Designers (asi/553001) in Woodstock, GA, is “taking lemons and making lemonade” by learning new skills and sharing her knowledge with her peers. “I just perfected a new technique on how to sublimate on noncoated acrylic and I’ll be hosting a Zoom video for my fellow engravers and sublimators,” she said. “I figure I’d take some time to learn new things and teach them to others.”

While the situation continues to change hour by hour, Cohen is leading his team as best he can as he reflects on the impact this will have. “At some point, the economy will come back, but it’s going to cost two or three quarters’ worth of sales,” he said. “No one alive right now has experienced something like this. It’s going to make history like the Great Depression and the Spanish Flu.”