Catching the Chill on the Rebound

I could not think of anything else to give for a title today and this one seemed to encompass a couple of notable news stories ranging from the spreading virus to the approach of Summer 2009.  This day marks many firsts which includes the first major failure of an American automobile manufacturer which in and of its own is groundbreaking but it is also being shadowed by the looming spread of a potentially pandemic virus.  Both have the ability to land a heavy body blow to the economies of the World and truth be told none of us yet know how it will play out.  We are approaching the tipping point as the economy has certainly begun to rebound but both of these situations have the ability to stop any recovery.   As of lunchtime today approximately 236 cases have been confirmed and will use our frequent writings here as a barometer tracking the spread.

With the grim news out of the way we will now switch to the chill portion of today’s rambling.  It is late Spring and with some scorching heat now occurring in parts of the region we are seeing a sharp uptick in searches for insulated items.  As a result we have rolled out the Contemporary Six Pack Cooler at an ultra aggressive price point.  We like the solid construction and attractive looks of this product over that of other brands.  It does not have the flimsy feel of lesser competitors.  The Gemline All Sport Cooler II is a remake of a popular earlier model from the same manufacture and like all of the cooler products from this brand feature safe PEVA lining.  We still sell items made from PVC as the FDA among others say they are safe but are glad to see a major vendor pulling away from incorporating these volatile materials.  Gemline has extended an existing line with the Vertex Cooler  which has been an annual best seller.  This particular item features there class leading logomagic which allows for easy dual branding.  The ability to use dual logos has been a huge selling feature this season as it allows customers to split costs.  Another opportunity for budget pruning exists when new less costly products are released such as teh Bungee Six Pack Cooler which we are using as a dual function product by stuffing a water bottle in the package.  We expect the trend towards bundled goods to continue as it gives the best dollar value on a weighted scale.

As many have heard by now industry giant Broder Brothers is threatening to declare bankruptcy next month if creditors do not relent to their demands for changes in terms.  This is much the same as what happened today with Chrysler but unlike that case investors would be wise to renegotiate with them versus taking a potentially much more severe hit.  The problems in securing financing continue for many of these firms and really they have no choice apparently.  Any failure of such a large firm would send terrible ripples down through the supply chain as many small embroidery shops would be left scrambling to find new suppliers that are willing to extend credit.   Investors seem to continue reflecting upon good times long gone instead of realizing we are in a much different economy.

Subtle Ways to be more Earth Friendly

With Earth Day 2009 having come and gone it is now time to look forward to the intervening twelve months and more closely examine other ways we can all minimize our impact on the environment.  By now we are all aware of the benefits of switching to fluorescent light bulbs providing they do not contain mercury, the advantages of upgrading to a more fuel efficient vehicle and the obvious advantages of recycling.  What is often not discussed are the other less dramatic ways for which we can reduce our impact.

Enter several new coolers this spring that are “unleaded” unlike thousands of similar products being sold.  Most major manufacturers sell coolers with PVC lining.   PVC is simply put Polyvinyl chloride otherwise known as one of the most valuable chemical compounds worldwide in terms of revenue and sales.  PVC lined coolers are everywhere but they do have a hidden danger.  To make PVC soft and flexible companies must add either Phthalate plasticizers or in some cases even some variations of lead.  Phthalate safety is widely debated at this time but there is little doubt we are better off without it in coolers that we later store our children’s drinks within.  This spring we have introduced a series of coolers that do not contain these compounds chief among them the Compact Six Pack Cooler which not only uses the much safer PEVA lining but is a striking value.  Available in multiple colors it provides a safe alternative for your next corporate outing and one that you can actively promote.   Likewise the Sofia Cooler Tote offers extraordinary function and power of design while excluding the dangerous chemicals that may contaminate coolers from other brands.   Right now there are very few manufacturers promoting PEVA lining because so few offer it.  Because of the clear benefits it is safe to assume that if the product you are looking at does not glowingly advertise the use of non-pvc components it probably still contains those compounds.   At that point you have to weigh the value of the product versus potential dangers of use.

The Vector Tote is new to the market this April and features a sharp vector angle design that is not something commonly seen previously.  This helps as giving it to your potential or existing client likely won’t evoke the “not another one of these” type responses as it is unique.   We like the design overall and expect it to sell well heading into summer.  A little bit more modern in terms of design and flare, the Groovy Tote minimizes frontal distraction providing maximum impact for your logo or tag-line.  With very little to distract the eye and a large billboard area it presents some exciting branding opportunities particularly for those utilizing the four color process printing offered.   Both of these items are made from durable forms of polyester which provide significant weight to strength benefits and also take well to being decorated.

The economy continues to slowly push forward and with Ford recently announcing they did slightly better than expected it is clear the assurance programs being offered are bringing in sales.  As discussed in Assurance Programs and How Little We Have Learned the real question will be have we just further delayed the inevitable?  We have already begun to see the dead cat bounce with some indicators clearly pointing to the rebound we have seen in the markets being a simple bounce but as of yet whether it is a real or fools rebound remains to be seen.  With each day the market stays up one would have to believe the market has turned.  Indeed we would like to believe we are all now seeing an increase in economic activity at least for the time being.

A Real or Fools Rebound

The happy dance days are here again if you watch the financial news networks.  Each week we hear more about fundamentals and the economic strength of the economy.  Last week wild projections were once again made on the price of oil suggesting a serious climb.  No mention was made that the expert quoted had oil prices pegged three times higher than actual just six months ago. 

The positive psychological impact is undeniable though as buying activity continues to steadily increase.  The first quarter was a disaster for many in the promotional industry with widespread reports of distributor and manufacturer sales being down as much as 50 percent.  To counter the turn there are many deals available including the Enterprise Pique Polo which is far above the entry level golf shirt you would have seen a year or two ago at a local convention.  Featuring three buttons and made of cotton this polo looks beautiful with your logo emblazoned across the front or back.  For the more budget conscience this same manufacturer offers the Vantage Velocity Cotton Pique Polo for a little less but as it turns out with the nature of the market the far superior Enterprise is available at nearly the same price point.  Vantage makes a premium product under the name Vansport Tournament Double-Tuck Pique Polo which includes sophisticated moisture management in the actual 65/35 cotton/polyester blend.  The entire Vansport line is considered the upscale version of traditional Vantage shirts with the major difference being the material.  As you move up their line you get into softer and smoother materials including shirts that wick moisture away from the body similar to much more expensive brands.

Shirts can provide an inexpensive incentive during these difficult times but even apparel sales are struggling badly.  The industry is typically dominated by apparel sales with close to fifty percent of the entire industry business being done out of this category.  The tshirt segment has been so saturated over the years that the impact of a custom t-shirt can be muted.  Think about it, when was the last time you really bothered to look at what was on a shirt?  This is where product placement is critical in selecting an item people actually care about and will wear outside of mowing their lawns or taking their dog for a walk.  If you give them a five dollar shirt that shrinks to the point of being one of those form fitting body shirts after two washes will anyone ever see your message?  Worse will the boss that ordered the purchase of those shirts ever come back to you again?  We see this quite frequently, you can always tell who ordered the cheap shirt when everyone is walking around with shirts tight to the bicep.  You are almost guaranteed that someone thought they could skimp on the shirt price as the samples they looked at fit.  The manufacturers will argue that nobody followed the washing instructions which usually require the cheap shirts be washed in cool water and only dried on low or medium.  Nobody ever follows those instructions and what you end up with is a frustrated customer or client.  What we like about the entire Vantage line is that the products are solid quality and do not shrink or fall apart like the bargain brands.  As we talked about in putting some thunder into your message it is critical that you select products that others will deem valuable. 

We will see in the upcoming week whether the economy is roaring or whimpering back to life.  We still do not know the answer even though our original piece was written weeks ago.   Despite the terrible economy there are still many unique opportunities in the economy and what it mostly comes down to is capitalizing on the existing situation through hard work that is both more efficient and better directed than your competition.

Putting Some Thunder into Your Message

A lot of the items we have talked about in the past weeks are similar to other items offered by the various manufacturers.  Duplication is the most sincere form of flattery and in the ad specialties industry it happens all the time.  It is nearly impossible for a manufacturer to spend the dollars required to patent every product they come out with as so many will be failures they would all go broke trying to keep a thumb on every product they launch.  As a result usually within six to nine months of a product becoming a success there will be an instant duplication of ideas. 

This is true with the Big Thunder Tote which was the first polypropylene tote in the non-woven category to arrive a few years ago.   The product comes from Bag Makers out in Illinois and enjoyed a meteoric rise in the industry.  Due to their smaller size they were able to slide through in the shadows for about a year before the larger players in the industry figured out how hot a product it had become.   There are many knockoffs but as of yet none have supplanted the original in sales or following among customers.   The only issue with the original was the size, some customers felt it too large and there was an immediate need for an item at a slightly lower price point.   Along came the Little Thunder Tote which trims a few cents off the original but is also considerably smaller.  This fits the profile of the type of item that would be given out at a convention where massive quantities are given away.   Both of these totes are made from polypropylene but Bag Makers has taken it a step further by using recycled materials in the bag.  Although technically they would fall below the threshold to be considered “recycled” which is usually 50% the fact that they contain some recycled content is admirable.  By using these materials in lower quantities than 100% recycled they guarantee the same durability and long lasting capabilities of fresh products.   They took a slightly different approach with the Ultimate Series Tote Bag in using non-specified or origin unknown original material but in building a pseudo product that fits between categories.  This item can be used as a shoulder bag, a regular tote or even a carry-all.  They have hit it out of the park in popularity and have an impeccable reputation within the industry and among  loyal customer base.

It is good to see so many manufacturers rolling out new products for the spring as the news continues to deteriorate in the U.S. economy.  Retail sales fell flat in March which is no surprise to any of you that own shops that deal directly with consumers.  What is very concerning about this number is the proximity to tax refunds.  Many will already have gotten refunds if not directly from the taxing bodies they may have used front services from H&R Block and others that put the money up for the return at a huge annual percentage rate.  Either way that money should have been flooding into the economy in March and was not.   Usually Earth Day and the associated increase in economic activity surrounding the awareness of Earth Day help to spur some sales.  Alas it would appear we too are reflecting on the good times now gone and that growth in the economy as a whole will be slow as our economic miracle continues to be a mirage.

Economic Miracle Now An Economic Mirage

At one time not long ago the United States was in the midst’s of what was being called an economical miracle.  As recently as 2006 supposed expert historians were proclaiming a new age of financial freedom and independence which turned out to be a total mirage.  As we are learning through the school of hard knocks there is no such thing as an economic miracle and instead we are paying the price for grave excesses.  

Today bore witness to yet more evidence that the modern day equivalent to the Gold Rush continues.  Just a week ago there were many experts telling us the recession was passing and all the economic data indicate smoother sailing ahead.  Then the March retail numbers hit today showing a huge decrease in retail activity which was contrary to the expected increase.  Higher oil prices likely were one culprit as speculators once again drove oil prices up in February and March which have resulted in 20-30% price increases at the pump.  It is no surprise that the moment gas prices rose retail activity went into the dumpster.  Promotional product sales are reportedly horrible which is why new and unique products are a must.  The Side Stripe Tote would fit this requirement as it is new and innovative.  What is probably most cool about it is the deliberately off center design that is unusual and eye catching.   Norwood takes the same approach with the Zebra Tote which uses the handles to provide a distinct look.   They also run the handles through the top of the tote which is something you will not see very often.  Our only concern would be carrying capacity but in this range users will not typically expect more than lightweight carrying.   Norwood has also updated an old classic, the Medium Snap Tote is made of the somewhat infamous Cotton Duck material which offers durability, soft touch and great decorating options.  

Air-Tek and Norwood are both members of UPIC which has assumed a role within the industry that is similar to ASI and PPAI.  As both the usefulness and authority of the underlying industry bodies begin to dwindle overall indexing services such as UPIC will continue to flourish.  An ever increasing number of distributors and clients are going direct to overseas producers.  Over time this will continue to erode the user base and willingness of the existing user base to pay the fees associated with the parent organizations.  Like all downturns economic turmoil provides unique opportunities and this period of time is no different.  I think we are all reflecting on the good times of the early part of this century and realize it will be many years before we get back to that point again.  As the President indicated today the road ahead will be long and difficult and we will not likely return to the same type of prosperity we saw earlier for many years to come.  In many ways the political and business landscapes have changed to the point they may never return to the way things once were.

Reflecting on the Good Times Long Gone

Having enjoyed the company of many good friends over the last forty eight hours I felt I should take a minute to offer a retrospective of the prior months.  As we gather for the holidays we are often able to get a multi-generational perspective of the way things are in the world today.  What was clear after these discussions is there is no promoting the current state of affairs as anything but negative.  Whether the person doing the talking was a senior citizen or a senior in high school there are endless tales of great misfortune.  High school students face ever increasing fees for everything from sports to books and senior citizens face dwindling retirement funds and increasing health and energy costs. 

I do not ever remember things being this difficult for so many people.  I remember times when certain industries would be effected.  In the 1970’s and 1980’s the textile industry first moved out of the northeast and then out of the country in the 1990’s displacing thousands of workers.  In the 1980’s the electronics industry left the United States in favor of places in the Far East.  In the 1990’s our call center jobs began to vanish and by this decade our financial sector jobs are getting the boot and moved overseas.  In addition regions are suffering from “near sourcing” where jobs are moved to other parts of the country where the costs are lower.  Even in the promotional products industry this is happening.  One of the largest online providers that heavily promotes “Made in USA” products is actually shipping hundreds of jobs to the Philippines.   Unknown to customers chatting with their respective reps they are buying “USA” made goods from a company that just outsourced jobs overseas!  There just does not seem to be that next magic bullet, that next Microsoft to employ thousands like IBM once did, like the textile, electronics, shoe, automobile and other industries once did.  The financial sector almost met the criteria but as we later found out those jobs were built on a pyramid with a very weak foundation and as a result the jobs have vanished.  Vacancies in New York City are at record highs as financiers flee the region.   Strange and sad times indeed.

The season has since passed but as we discussed in the article about rebounding your business there is only so much you can do to improve the current situation.  Until the economy begins to show positive growth all businesses are fighting for a dwindling customer base.  This leads to inherent cannibalization of the core business and is a detriment to all.  All other things being equal that leads to a shakeout and eventual destruction of involved businesses which could mean outright closing or mergers and acquisitions.  Finding low cost mechanisms to gaining business such as custom koozies as we head towards the warm weather should be a prime concern.  Let’s face it with so many out of work there will be a lot of time spent sitting around beaches and pools this summer.  A padfolio may fall flat while something like a Koozie Picnic Basket may hit the target.    Keep in mind you may be able to hit two birds with one stone as you reach potential customers and potential employees.  During down periods many companies have learned to expand their talent pools with vigor as it is a lot easier to hire someone of a high caliber during these markets.  We heard of one company recently giving away a Metal Koozie Can Kooler to anyone they interviewed at a recent job fair in New Hampshire.   News coverage showed mostly cheaper items being given away but reports from the show indicate the koozies were gone in a flash.    I prefer the Adjustable Koozie Can Kooler as with the velcro backing it fits just about anything including the odd shapes and sizes you often find at your local convenience store, health club or even fast food joint.   Even many of the new beers and energy drinks are coming in such odd sizes and shapes the traditional coolers just do not get the job done.

I think a lot of what happens in the next few months will ultimately be dictated by energy prices.  No matter how hard the speculators try they have not been able to keep prices up as there is just no support in the demand numbers.  Although this is a blessing and a curse as the drive towards more energy efficient vehicles is muted right now it is more important to get the economy firing forward.

When Going Green Goes Bad

We recently reviewed the new Belkin surge protector that was supposedly going to reduce our electrical bill and have all sorts of other green features.   After about a week of use we sadly have to report it does not work as advertised and is in the end a glorified overpriced traditional surge suppressor.  The Belkin Conserve line works on the premise of having an RF remote that allows the customer to shut off a series of outlets at the end of the day.  This would therefore cut power to those outlets eliminating any standby power.  The problem is the remote is terrible and no matter how many times we switched channels and synced the two units they would only work together once before failing.  We literally tried perhaps thirty times and only had the remote work five times.  Therefore I can only say that at this point it is not a unit we’d recommend. 

In the meantime the Scripto brand has made its way to the advertising specialties industry.   Scripto has a long history of providing high quality goods and services in the consumer sector which has now been crossed over to the business sector when a major industry vendor began to carry the line.  Custom Scripto items are now available which includes a full complement of pens, jotters and the trully unique bundle sets which offer one of the best values in the market.  The Scripto Writing Pad Bundle Set comes complete with both a seventy page paper pad and a decorated Scripto pen which is not something you will see very often at these rates.  The materials are rugged and durable and although they do not carry with them the same grace as leather products they are still an exceptional piece with impeccable quality.  The Scripto Journal Bundle Set also comes with a journal with paper and a customized pen.  The Journal tends to be the more economical choice but both are available in a range of colors and options.

The marketing spin continues on the economy and in the financial markets.  Despite some recent good news from major banks it does not appear a recovery will be coming anytime soon.  Instead of the 1990’s version of the soft landing what we are instead witnessing is a continuation of the soft fall.   During these times we are noticing an uptick in green marketing which we discussed in an earlier piece about teaching kids to be eco-friendly.