News December 15, 2023
10 Predictions for Promo in 2024
From sales growth to the presidential election to AI, industry pros from companies large, small and in between offer insights into what lies ahead.
It’s the time of year to play Nostradamus.
As 2023 winds down, eyes are turning to 2024. What will it hold for the promotional products industry?
For answers, ASI Media talked to a range of promo pros. From CEOs at some of the industry’s largest companies, to the solo-operating owners of small-town distributorships pulling in under $250,000 annually, we got the pulse on what many expect for next year.
Of course, if COVID taught us anything, it’s that even the most informed prognostications can fly out the window at a moment’s notice. Our “20 Predictions for 2020” article, written in late 2019 just before the pandemic struck, might give readers a good “LOL” (though some of the predictions have certainly come true as the market has normalized).
Still, all promo pros can do is make the best possible forecasts based on what they know now. It’s a worthwhile exercise to help orient your focus in the year ahead – with the knowledge that you can pivot in the face of the unexpected. And so, without further ado, here are 10 promo predictions for 2024, straight from industry pros.
1. Industry Sales Will Grow
There appears to be a cautious optimism simmering at promo firms of all sizes.
Sure, they recognize that macroeconomic uncertainty, a possible recession, and related issues like still-high inflation and interest rates could dent sales and sink the topline below 2023 levels, depending on how things play out.
Still, the majority of distributors ASI Media spoke with believe revenue expansion is in the cards for their businesses in 2024, even if industry growth has slowed in the latter half of 2023. Various reasons are driving the 2024 outlook.
“We’re projecting an increase for 2024 driven by a mix of expanded client opportunities and new client growth,” says Marc Simon, CEO of Top 40 distributor HALO Branded Solutions (asi/356000) and a member of Counselor’s Power 50 list of promo’s most influential people. “Buyers who have put off evaluating promotional products, uniforms and recognition categories post-COVID are back in the market looking for solutions.”
Counselor Confidence Index
The Counselor Confidence Index measures distributor financial health and optimism. At the end of Q3 2023, the index was up compared to the prior quarter, with a reading of 103 – above the baseline of 100.
Power 50 lister Andy Shape, CEO of Top 40 distributor Stran & Company (asi/337725), believes a sales increase is coming, too.
“We expect continued growth in 2024 as a result of enhancements to our sales leadership, increased marketing efforts, and developing more structured strategic growth plans and incentives throughout the entire company,” says Shape, who was named Counselor’s 2023 Person of the Year.
Elsewhere, California-based Team Phun (asi/342550) and New York-headquartered A&P Master Images (asi/102019), both distributors with revenue between $1 million and $5 million, foresee growth in 2024.
“Based off of our Q4 reviews with clients, especially with those whose spend was down in 2023, we’re projecting an increase for 2024 thanks to a more positive economic outlook,” said Team Phun principal Jesse Goodwick.
A&P Master Images, which offers extensive in-house decoration, is aiming to grow by $750,000 to $1 million next year. “We’ve built our team and added more decoration processes to our company,” says CEO Howard Potter. “This will allow us to expand our internal product options and turn the orders over in house quicker than having to sub some of them out.”
Sally Back runs a distributorship that’s set to pull in about $210,000 in 2023. The owner of Backhome Creations, an independent Kentucky-based Century Club Dealer for Top 40 distributor Kaeser & Blair (asi/238600), says she works hard to present new and exciting options to clients – an effort that’s paying off.
“I believe,” she says, “that things will continue to grow in 2024.”
2. Tech Sector Spend Will Rebound
The technology market experienced significant headwinds in 2023, including most prominently widespread layoffs. Some distributors relate that the business they did with such clients was down on the year as a result. Still, the skies may be clearing with buyers in this sector, and there’s a sense that opportunity is blossoming again.
“There’s a resurgence of positive trends among some of the larger technology companies, driven by their renewed focus on growth and the adoption of AI-enabled technologies,” shares Simon.
Top 5 Markets for Promo Sales
1. Education
2. Healthcare
3. Construction
4. Nonprofit
5. Manufacturing/Distribution
Meanwhile, distributors are also expecting a bounce back from another market some characterized as down in 2023: the financial industry. “Service-based markets, including finance, will see success,” says Goodwick.
Broadly speaking, distributors tell ASI Media that traditional top markets will keep their place in 2024, with education and healthcare commonly cited as fertile ground for revenue generation.
But distributors can also capitalize on niche opportunities based on dynamic and unique marketplace conditions.
Angie Gallo-Hughes, for instance, has found a nice niche serving credit unions. “I enjoy doing business with them because they’re so diversified in their purchasing and events,” says Gallo-Hughes, owner of North Carolina-based Awesome Advertising (asi/128275), a mid-sized distributor (a revenue class with annual revenue above $250,000 but below $1 million).
“No matter the industry,” says Potter of A&P Master Images, “there are businesses that have learned to grow even during very challenging times. Pay attention to those businesses and partner with them.”
3. The Presidential Election Will Fuel Merch Spend
Presidential candidates will be hot on the campaign trail, and they’ll be using branded merchandise to raise funds, galvanize their base and connect with new supporters.
The phenomenon is already underway, with Republican candidates releasing “moment merch” based on things like soundbites to score points for themselves and over rivals. For sure, former President Donald Trump, currently a GOP candidate, notched a notable though controversial success with his so-called “mugshot merch” released over the summer.
(Photo courtesy of Nikki Haley for President)
In an example of presidential candidate “moment merch,” the GOP’s Nikki Haley turned a criticism that she was “past her prime” into a defiant rebuttal on this can cooler.
While it’s the rare few in promo who will work on a presidential campaign, the high-profile use of merch by candidates competing for the highest office in the land will have the knock-on effect of influencing politicians vying in local, regional, state and federal elections to invest significantly in promotional products to help propel them to victory, industry pros believe. In that, there’s potentially dollars for many distributors.
“I think one of the biggest opportunities of 2024 will be the election cycle,” says Goodwick, the Team Phun principal.
Mark Gammon, CEO of Top 40 supplier Cap America (asi/43792), believes that distributors who think outside the box in consulting political clients will earn the biggest wins.
“Candidates are going to need promotional products to get their names out there,” Gammon says. “Firms can capitalize on this by going above and beyond to create a customized presentation filled with unique items to make the candidate stand out from the crowd.”
4. There Won’t Be Another Stanley (But Retail’s Influence Will Still Matter)
Dan Jellinek never thought he’d be drinking out of a 40-oz. tumbler. And yet, in 2023, it’s become the norm for the executive vice president of Top 40 supplier The Magnet Group (asi/68507).
Him, and literally millions of others.
The reason, of course, is because of the 40-oz. Stanley Quencher, a product that soared to stratospheric popularity after going viral with social media influencers. The popularity with consumers at retail cascaded into promo, with end-clients requesting en masse either the Stanley itself or products made to look and perform just like it.
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Retail trends have always had an influence on promo product design and buyer preferences. But the success of the Quencher is a vivid reminder of just how profound that influence can be.
Expecting another breakout hit akin to the Quencher isn’t likely in 2024. Still, Jellinek and others say retail’s influence will remain exceptionally strong, and perhaps will even grow overall. “Trend-wise, when it comes to the product side of things, simply watch retail,” he says.
The smartest suppliers will find ways to forecast the forthcoming trends and stock product to match, and savvy distributors will be able to drive sales by proactively pitching such items, executives say.
5. AI Use Will Take Off
Cap America is already utilizing artificial intelligence to help with image editing and content idea generation for its email and social media marketing. It’s a toe-dipping into AI’s capabilities, the company says, that’s likely to deepen next year.
“AI has been a topic of conversation at every promo event I’ve attended over the past several months and its possibilities seem endless,” says CEO Gammon.
Ask Us Anything: How Will AI Change Promo? https://t.co/lxVkl91v1w
— Chris Ruvo (@ChrisR_ASI) December 15, 2023
Generative AI software such as ChatGPT went mainstream in 2023, and many promo companies began to slowly experiment with it. In the coming year, expect the promo industry – especially larger distributors and suppliers – to take a major leap in their AI usage, powering everything from marketing/content creation efforts to internal processes, data analysis and production capabilities. Earlier this year, ASI Media reported on the growing use of robots in some supplier distribution centers; expect that to grow as well.
“AI will play a key role going forward,” says Dan Pantano, president/CEO of Top 40 supplier alphabroder (asi/34063) and a member of Counselor’s Power 50. “AI allows for the generation of tailored content and solutions based on simple inputs around customer characteristics and needs. This will influence everything from product recommendations to customer experiences. It will enable the creation of personalized experiences like never before.”
6. Tech Advancements Will Be a Must – For Everyone
Staying on technology: There’s a widespread belief that companies large and small in promo are going to have to better leverage technology to provide more streamlined and comprehensive solutions to meet the mounting demands of end-buyers.
This will continue to manifest in a variety of ways, including the order process.
Power 50 member Brandon Mackay, president/CEO of Top 40 supplier SnugZ USA (asi/88060), shares that significant portions of supplier budgets are being allocated toward improving application programming interfaces (API) and to PromoStandards, a nonprofit-driven initiative to improve supply chain and transactional efficiencies in the industry through standardized systems integrations between suppliers and distributors.
That’s a step in the right direction, say distributors.
“Inconsistent service levels from suppliers are a drain on distributor resources that could be removed if we could adopt a common enforceable service standard across the industry,” asserts Bob Herzog, CEO of Top 40 distributor Corporate Imaging Concepts (CIC, asi/168962).
“Clients’ technology requirements have expanded to not only include e-commerce, but fully integrated technology platforms as well.” Marc Simon, HALO (asi/356000)
Supplier executives say the evolution is a must.
“Electronic purchase orders will become a necessity rather than a luxury to efficiently conduct business in the industry,” maintains Frank Carpenito, president/CEO of Top 40 supplier Gemline (asi/56070) and a member of Counselor’s Power 50.
Carpenito continues: “With labor rates and benefit costs continuing to escalate year after year, companies can no longer simply keep throwing labor at solving their inefficiencies and expect to be able to pass those costs along without pricing backlash from the marketplace. One of the solutions to this problem is converting a predominantly manual transaction process into an automated electronic process sooner rather than later.”
Industry distributors are also working to meet end-client demand for what Simon describes as “a more robust set of technology features to distribute branded merchandise.”
“The technology requirements have expanded to not only include e-commerce, but fully integrated technology platforms as well,” says the HALO CEO. “This includes seamless back-end integration, secure data collection, social and email amplification and more advanced security protocols and data integration. There’s strong marketplace demand with significant opportunities for distributors that can deliver these technology solutions.”
It’s not just the industry’s select largest firms that are poised to grow technologically. Smaller companies like A&P Master Images have invested in things like creating their own software to help scale their businesses, for instance.
Meanwhile, expanding tech solutions from industry service providers that include entities like ASI and others aim to help distributors streamline and simplify daily business in a manner that enables them to prosper.
7. Personalization Will Be a Difference-Maker
From social media feeds to online retail shopping, consumers have become accustomed to having experiences tailored to their tastes. This conditioning is increasingly shaping the expectations of both buyers and recipients of branded merchandise – a phenomenon executives think will become more pervasive in 2024.
“Customers are looking for personalized products and experiences,” says Shape, of Stran & Company. “They want a product that’s branded with a personal connection – name, hometown, pet, you name it – to the recipient. When we can help make that one-on-one association between an individual and a brand, our products become even more powerful marketing tools.”
The positive effects of personalization and customization don’t just apply to products.
“There’s a big opportunity around customer-centric marketing,” says Pantano. “Our industry is large and has many diverse customers – each with different needs and wants. We have to be more sensitive to each customer’s pain points, challenges and buying habits. The businesses that can meet and exceed expectations by ‘speaking the language’ of their customers and prospects will have a leg up.”
8. 100% Sustainable Requests Won’t Be an Aberration
Environmental, social and governance (ESG) initiatives are not “trends” about to disappear.
They’re a growing movement of sustainability and corporate social responsibility (CSR) efforts that increasingly will influence everything from the materials and processes used to make promo products and how industry companies operate, to the buying preferences of end-clients and information they require of distributors. For sure then, the ESG focus by promo companies and end-buyers will ratchet up in 2024, executives say.
Mike Wolfe says the sustainability emphasis is already revving into high gear with certain large clients for which Top 40 distributor Zorch (asi/366078) provides merch programs. “We have some clients requiring that 100% of their collections be sustainable, and I only see the momentum of this trend continuing next year,” says Wolfe, Zorch’s president/CEO.
Simon, too, says the industry will have to commit to practices like recyclability and upcycling in addition to communicating the eco-friendly attributes of products. “In response to consumer demands, businesses of all sizes will prioritize environmental stewardship and ESG will be paramount in our industry,” he says.
In 2024, says Shape, “sustainability and product value will become increasingly important – especially for larger brands concerned about the environmental impact of their purchases.”
#CSR / #ESG are not fads soon to fade. They're a movement. If you're in the #promoproducts industry, it's pivotal to be up on how this phenomenon intersects with your business. The Promo for the Planet site will help you do just that. Stop by: https://t.co/DW9d5kwLYT
— Chris Ruvo (@ChrisR_ASI) December 10, 2023
From a supplier perspective, there’ll be a push among the forward-thinking to eliminate harmful chemicals like PFAS and PVC from collections and to create items that are made from more eco-conscious materials that have less environmental impact, says Carpenito. Sounding a similar note, Mackay says ESG-aware suppliers are working to reduce wasteful packaging and their overall operational footprint.
“The focus on CSR/ESG will continue to accelerate in 2024 as the buyer demographic continues to shift younger and to individuals that are more concerned about climate, the world and their local communities,” Carpenito asserts. “Certain industries like technology and financial services, whose purchases of promotional products were depressed in 2023, and who are projected to rebound in 2024, tend to lead the way with new demographic shifts, so this too will fuel further acceleration with CSR/ESG.”
There’s a flip side to this coin. “While sustainable products are an opportunity, this trend also presents challenges for an industry that has thousands of items that will not be considered eco-friendly,” says Wolfe. “Several of these manufacturers are going to have to pivot quickly or risk significant declines in their business.”
Make no mistake though: It’s not just suppliers that need to keep stepping up their ESG game; distributors must operate more sustainably and be able to verify that they’re doing so, executives say.
“We’re seeing an uptick in requests from very large customers who are asking us to provide specific numbers to show the environmental impact of our business,” says Herzog. “These companies are using large outside firms to specifically measure their impact on the environment and therefore they want to know our contribution. This is forcing us to find ways to specifically measure our carbon footprint so we can comply.”
9. ‘Greenwashing’ Will Need To Be Addressed
Amid the demand for eco-friendly products, firms that are either unscrupulously deceptive or, in cases, just ignorant, market products as “sustainable” when in fact they are not.
This making of an unsubstantiated claim that deceives a potential buyer into believing a product is environmentally friendly is called “greenwashing” – and it’s a growing problem in the promotional products market that needs addressing, say certain executives.
“The risk of greenwashing in promo is already real, as some companies in our industry are fueling the phenomenon when it comes to CSR/ESG,” says Carpenito. “As an industry, we simply must figure out a means to self-police when it comes to greenwashing. The potential consequences would be regrettable if any incidents were linked to the promo industry and, as a result, impacted the value we offer as a marketing and incentive medium.”
10. Promo Will Rise to the (Many) Challenges
Beyond greenwashing, industry pros shared no shortage of concerns about possible business impediments for 2024.
For some smaller-sized distributors like Sally Back, a challenge will be continuing to strengthen client relationships by providing value to fend off what’s perceived to be growing competition from web-based sellers.
Among distributors, there was a common refrain of worry about having to navigate potential service issues related to delivery times, supplier responsiveness and inventory of the right product in the right quantities.
“Over the past few years, we as an industry have been thrown every curve ball possible from COVID to supply chain upheaval. And yet, here we are standing strong. The same will go for 2024.” Dan Jellinek, The Magnet Group (asi/68507)
Still others assert that distributors will have to do a better job of educating clients and prospects about the high-value cost-per-impression and potential longevity-of-product that can come with well-executed promo solutions. This will be important, they say, given the limited but not insignificant marketplace sentiment among some that merch is mere landfill fodder.
Given the uncertain and often conflicting predictions about the direction of the economy, it’s no surprise that industry firms are leery about the macroeconomic situation and its potential to sour promo sales. Nonetheless, those ASI Media spoke with didn’t seem daunted.
“An economic slowdown would be a challenge, but this can be overcome with a solid marketing effort and a focused sales team,” says Andrew Titus, president of Top 40 distributor Fully Promoted (asi/384000) and a Power 50 member. “The entrepreneurs in our network of franchises don’t give up. The key word through a tough time is ‘resilience.’ That’s something we have.”
Jellinek sounds a similar note.
“Over the past few years,” he tells ASI Media, “we as an industry have been thrown every curve ball possible from COVID to supply chain upheaval. And yet, here we are standing strong. The same will go for 2024.”