As every year, eppi magazine interviewed suppliers and distributors from the European industry to sum up the last twelve months. A review of the promotional products year 2016.
End-of-year reviews are similar to obituaries – one actually only wants to write something conciliatory and let the past shine out in a positive light. However, a review of 2016 is more like an obituary of an evil person – regarding what happened all over the globe, there are unfortunately many bad things to report, which can hardly be glossed over. The events of the year have of course had an impact on the promotional products industry too – this is also the conclusion of the industry monitor, which eppi magazine carried out again this year among industry players all over Europe (the interviews can be found below). The Brexit that was decided per referendum in June, the coup in Turkey, the terror attacks in Brussels and Paris, the ailing EU, the rise of the right-wing populism in Europe and America as well as the refugee crisis also affected and occupied the European promotional products players. “The Brexit was definitely the most discussed issue this year” (Colin Loughran, Goldstar Europe). “The economic and political upheavals in Turkey were the most frequently discussed problems of the past months” (Hertsel Murat, Murat Tekstil), “Apart from the refugee crisis, the most-discussed theme in 2016 was the US elections” (Jan Breuer, mbw).
Although the consequences of many events can still hardly be forecasted, insecurity and indecisiveness is already perceivable among the economic decision-makers. “The business decisionmakers have little confidence in the future at the moment. We are all flying by the seat of our pants” (Bertrand Passot, Passot Innovation), “In a tense economic situation, marketing isn’t the top priority and customers opt for the cheapest solutions” (Willi Richter, Respiro). In the light of this overall situation, it is surprising that the summary of many of the industry players was comparably positive – it can be confirmed that the industry had a good year overall. “Despite a post-Brexit dip in sales for three months, Fluid Branding’s turnover has increased 72% year on year from 2015 to 2016.” (Matt Franks, Fluid Branding). “We are celebrating our best year since 2005” (Wolfgang Bosch, Mitraco). There was also an upward trend in the Southern European markets, which had suffered under the consequences of the economic crisis for many years. “The mood in the business world was good; overall things are continuing to move forward” (Cristina González, Clipy), “The promotional products market in Italy showed significant recovery this year” (Luca Bortoletto, Maikii).
How was your year?
Artur Owczarski: Once again twelve months full of hard work and new challenges lie behind us. In January, we moved into our much more spacious headquarters. This meant we were in a position to “spread out“, increase the production volume and shorten the delivery times. Primarily however, having our new PVC factory on-site in Warsaw allowed us to launch a production for tailor-made USB storage media – a step that is innovative in Europe and which enables us to compete with the Chinese manufacturers in terms of price and lead-times. Thanks to these developments we were able to increase our turnover.
What did everyone talk about in 2016?
Artur Owczarski: In our product area, 2014 and 2015 and the first six months of this year were a critical period. Due to the low prices of flash storage media a lot of companies went bankrupt and disappeared from the market – this was equally true for Chinese manufacturers, suppliers and trading agencies as well as for European importers. On the other hand the reduced competition was beneficial for larger, more efficiently organised companies and helped them grow. In any case, it strengthened our position and we were able to increase our market share.
What new developments is the market holding in store in the product area?
Artur Owczarski: There is a strong trend towards custom-made designs, which will increase further in future. Tailor-made solutions are the future, this is apparent in many sectors. 3D printers will very soon allow the fast and favourably-priced design of individual products and shapes. Our newly founded PVC Factory, in which we produce USB storage media as well as key fobs, magnets and coasters that are completely designed to meet the customers’ individual requirements, accommodates the trend towards special designs.
Which trade shows are must-attend events?
Artur Owczarski: Definitely the RemaDays in Warsaw. The event has shown rapid further development over the past years and the relocation in 2016 offers room for further growth. The attendance grows every year and the RemaDays are in the meantime an event of high international significance. The PSI Show is the largest and most famous industry event, but it is quite possible that the RemaDays will assume this leading role one day. In addition to this, smaller international events, which give us the opportunity to meet customers locally, are also very important for us. This helps us to understand their needs better.
Are you satisfied with how the year went?
Cristina González: At the end of a year with a few fluctuations, we will have been able to increase our turnover by around 5% in comparison to 2015. That is o.k., but we are not totally satisfied, business could have been better. One must of course take into account that the political situation in Spain had a direct influence on the industry’s economy – after all we didn’t have a government for almost a year. Apart from that the political occurrences of the year had little influence on the industry happenings. Nobody can predict what will happen now after the elections in the USA, it is too early to say. In any case, like many other people, we certainly hadn’t expected this election result.
What is the overall mood like within the Spanish industry?
Cristina González: In spite of the difficult political framework conditions, the mood in the business world was good, overall things are continuing to move forward. The average order volumes are slightly down, but the number of orders is up. Since we are a company that focuses strongly on export, we are however only dependent on the Spanish domestic market to a limited degree and on the European front we achieved good growth in 2016, above all in Eastern Europe.
What were the dominant tasks of the year?
Cristina González: Against the background of economic fluctuations, one of the most difficult tasks was to keep the prices stable or adjust them in line with the market circumstances. We additionally talked a lot about product development and were strongly involved in creating and developing new models. That took up a lot of time. But it is essential to continually present new products. We consider trade show events that end users are also allowed to attend to be a further challenge. The promotional products trade is and will continue to be our only sales channel and we don’t know how to react when we are contacted by the end users too, for one reason alone because we don’t have the corresponding price lists. That is why the PSI Show is still a big question mark for us at the moment. In line with our regular cycle, we won’t be exhibiting there in 2017, because we are concentrating on other events this year.
What challenges do the daily dealings with the promotional products trade bring with them?
Cristina González: It is always a demanding task to offer comprehensive services and good quality at attractive prices. This is frequently a juggling act, which demands constant adjustment. Especially when one considers that the demands of the customers continue to increase as a result of the ever stricter product laws, regulations and compliance guidelines: The corresponding certifications are demanded more and more often by the customers and external testing companies are commissioned for the testing. However, this year we successfully passed several audits of big companies.
Which European trade shows are the most important for you?
Cristina González: In addition to the PSI Show, the CTCO in Lyon as a platform for France and Southern Europe and the RemaDays in Warsaw focusing on the Eastern European market are of high significance. We meet up with the promotional products trade from the Benelux countries at the Leveranciersdagen in Utrecht – and of course the Promgifts in Madrid is an important “home game”.
What is your appraisal of the current fiscal year?
Bertrand Passot: Business went well up until the middle of the year, the mood on the market was positive too and the curve was showing an upward spiral. Then, unfortunately, everything turned around in June so that we will probably close the year on a stable turnover that is however slightly down on last year.
What was the reason for this? Is there a connection to the rather negative political occurrences of the year?
Bertrand Passot: I can’t assess at the moment as to what extent the political situation influenced our turnover or how it will influence it in the future. However, we have definitely noticed that the market has been very slow in the past months. No doubt, this is largely due to the fact that the business decisionmakers have little confidence in the future at the moment. We are all flying by the seat of our pants, day by day!
Can the market participants rely on each other at least? What are the relations between the suppliers and the distributors like at present?
Bertrand Passot: Actually very good. The framework conditions are generally positive: Promotional products are increasingly being recognised as an important part of the marketing mix and are being awarded serious budgets on a par with the “big advertising media”. When it comes down to exploiting these budgets, the cooperation between the distributors and the manufacturers or importers still works very well, the relations are intact and close. But here threats are being posed too: New players, who exclusively operate on the web, are a threat to the industry structures and threaten the profit margins of the suppliers and the distributors alike.
As a manufacturer, which developments are you observing in the customising technology area?
Bertrand Passot: There is less and less demand for unicoloured embellishments that are printed using conventional methods – instead full-colour customisations, which digital printing even makes possible for small volumes, are gaining in popularity. So, in the face of the huge development in the digital printing techniques, one has to keep astride with the times. The market demands more and more services within ever shorter lead-times.
What is your appraisal of 2016 so far? What were the key themes?
Stef van der Velde: The result of the elections in the USA are a current theme, of course we are hoping that the impact on the European economy will be limited. 2016 went well and we are hoping to achieve a good annual balance overall. One heard lots of complaints about lower turnovers and higher costs within the industry, the Hanjin crisis was also a big problem for several importers. However, Giving Europe didn’t have any contracts with Hanjin, so we are not affected by them going bankrupt. A big focus this year was on the alignment of our partners with the international work standard SA 8000 and the BSCI audits. As a member of the BSCI (Business Social Compliance Initiative) we have to fulfil the prescribed standards and also guarantee that our partners comply with them. We are going to have to sever our relations to companies that don’t fulfil these standards.
What is the situation like in China overall? What developments have shaped the import business?
Stef van der Velde: Generally speaking, importing from China is proving to be tougher than in the past. The previous delivery times of three months are hard to uphold because the stricter testing mechanism can hardly be compensated for by simply changing the ordering procedures. However, the industry customers are often demanding even faster delivery times. I personally don’t know how importers and distributors can accommodate this demand and at the same time satisfy all of the testing criteria. After all, careful testing, for example, by the TUV can take several weeks. We account for this delay by adjusting our delivery times for custom-made designs. This problem doesn’t occur for standard goods, because we dispose of large warehouse capacities. Due to the political situation and the infrastructure in comparable production countries, there continues to be no alternative for China as a production site.
What is your reaction to the target group expansion of the PSI Show 2017?
Stef van der Velde: We have redesigned our stand to offer our customers room for consulting discussions with their industry customers. Furthermore, we have prepared presentations, i.e. on the theme of BSCI, which will offer the new visitors informative added value. How the distributors ultimately decide and whether they take advantage of our offer, is left up to them. I am, however, sure that industry customers who visit the show without being accompanied by a consultant will soon lose the overview due to the overwhelming amount of products and impressions and will thus not be able to profit from the event.
What is your opinion of the web-to-print solutions like those offered by Vistaprint or Spreadshirt?
Stef van der Velde: There may be some companies in the industry who fear players like Vistaprint as potential rivals, but we are confident and are not frightened of such possible competition, nor would we rule out a partnership. In general, we view the arrival of these players as an interesting development. Our industry can and should not close itself off to market trends such as web-to-print technologies.
At the time you really asserted yourself for EPPA and also lent the European promotional products umbrella association financial support. What do you think about the efforts to found a “new EPPA”?
Stef van der Velde: There are two themes that a new umbrella association should focus on: On the one hand, lobby work for our industry in Brussels and on the other hand a market analysis on the size and structure of the industry. All other themes such as joint certifications for example are totally superfluous and not implementable. If a new association sets itself too many goals, as in the past the question will arise as to who is going to finance it and where can one get the staff needed to put these goals into practice from. Furthermore, the membership structures in a new association also have to be taken into account: The system can’t accommodate too many members and different market players due to the prevailing differences and varying market circumstances in the different European countries. In terms of content, focusing on the lobby work and market research is the only forward-looking approach – otherwise I am certain that a new association will also fail.
Monika and Walter Both, founders and co-shareholders of mbw, retired at the end of 2014 and you took over the reins of the company as CEO and coshareholder. What is your conclusion after the first two years?
Jan Breuer: It was important to me that we stick to the existing values, because these values have made us into what we are today. It is however also necessary to make room for new, creative ideas, which help us with the continuation and further development of mbw. I am proud of my staff because over the last two years we have already achieved an awful lot together. We have also set ourselves important goals for 2017. For example, we want to launch a new webshop onto the market within the first six months of 2017.
European Football Championships, Olympic Games, Paralympics – did the “Super sports year” 2016 have an impact on your turnovers?
Jan Breuer: Generally speaking, merchandising is an important theme, however this market is already very saturated. Events such as the European or World Football Championships or also the Olympic Games always contribute towards increased turnovers, however, we don’t invest additionally in special campaigns or items for these events. We serve the majority of our customers with existing stock goods or have items manufactured in the Far East on request.
To what extent are you noticing the flailing economy in China and are there alternatives to the Far East?
Jan Breuer: We keep a close eye on the situation in the Far East. Especially the price developments present us with challenges. There are already alternative production locations, whereby the majority of the raw materials for the production of the end products still comes from China. Furthermore, we were also affected by the bankruptcy of the Hanjin shipping company. Some containers were extremely late arriving at our warehouse. But we informed our customers in good time so that we were able to avoid problems in most cases.
How important is social commitment for you, among others in terms of the current refugee crisis?
Jan Breuer: The social responsibility of companies is of enormous importance. As an entrepreneur one is not only an employer, but also a role model and forward thinker. I take this responsibility very seriously. In 2015, we launched a great project together with many employees from our factory: A semi-detached house for a Syrian family of five was renovated and furnished. The family has now been living in Wanderup for a year already and feels very much at home. The three children have integrated very well in the local nursery and the parents are also doing their best to learn the difficult German language.
And what else apart from the refugee crisis has been a topic of conversation this year?
Jan Breuer: Apart from the refugee crisis, the most-discussed theme in 2016 was the US elections. Personally, I find the latter very worrying.
Which themes dominated the year?
Hertsel Murat: 2016 was an ordinary year for us as a company, there was hardly any fluctuation – but unfortunately it was a very bad year for Turkey. The economic and political upheavals in Turkey were the most frequently discussed problems of the past months. We all have to work harder than usual and are striving to reestablish the trust in the Turkish market in spite of the negative examples that also exist here.
Have you also felt the impact of the international events?
Hertsel Murat: The worldwide terror attacks are obviously having a huge negative influence on the economy. The people are unhappy and feel insecure, companies don’t want to invest. We are trying to keep going, are asserting ourselves even more than before and have forced and individually aligned our marketing policies – this is very important in times like these.
Did you succeed in compensating for the set-backs?
Hertsel Murat: In spite of the political unrest in the country and although most of the Turkish companies are experiencing massive economic problems, we were able to maintain our turnover at a stable level. With 30 years of experience on the market, I can honestly say that we have not felt the negative influence of the “country risk”. We focussed on different markets, i.e. the fashion and retail sector – here we supply among others several well-known French brands. Otherwise, we are simply continuing on our way – as we have done over the last 30 years.
Let’s talk about something more pleasant: Which product trends are currently hip?
Hertsel Murat: We receive a lot of enquiries for sports items with customised sublimation designs. Fashionable aspects have also played an important role for several years – textiles have to look good and satisfy the fashion demands, basic T-shirts no longer suffice. Our experience on the fashion market is against this background very advantageous because we differ from basic suppliers.
Which industry trade fairs are must-attend events?
Hertsel Murat: On the European market, the PSI of course, which we have attended for 20 years. The CTCO in Lyon becomes increasingly more significant too and during the seven years that we have been exhibiting there it has grown rapidly. We additionally exhibit at the Premium Sourcing in Paris in order to meet up with new and existing customers and groom our relationships in France, where we are very well positioned.
What were the themes of the year for you?
Ulrik Heidbüchel: We observed a consolidation of the promotional products market: Today, blue chip companies are looking for a global full-service solution from one source, which bundles procurement and administration centrally, which nevertheless still serves the individual markets locally. This includes complex logistics and the corresponding IT solutions as well as the observance of CSR, the compliance and environmental guidelines have to be completely documented and made transparent. On a global level, only big, internationally operating agencies can achieve this – medium-sized and locally-operating distributors are thus losing their appeal for multinational groups. A further theme this year was the absence of a good-functioning European umbrella association, which represents the interests of the industry on a European level – we urgently need a new organisation. Last, but not least the new admission policy of the PSI Show was a further focus. We are very eager to see how the first industry customer day goes in January 2017.
What role does eCommerce play in connection with the consolidation you mentioned?
Ulrik Heidbüchel: A key role. The sourcing is increasingly taking place across purely digital channels. It will soon be quite natural to integrate custom-made designs into the digital fulfilment processes, as well as order-to-print mechanisms. The pioneers here are the eCommerce giants from the retail sector. Copying business models like those of Vistaprint, is a big challenge for our industry, which presupposes enormous investments in IT, machinery and logistics.
Will companies like Amazon and Vistaprint try to play out their strengths to get a foothold on the B2B market?
Ulrik Heidbüchel: Yes and they are rivals that should be taken seriously. Vistaprint for instance is currently developing a range of promotional products. The strengths of the group lie in the wide selection of products it offers, which encompass print products and promotional products. On top of that they offer competitive prices, because there are no intermediary suppliers or external service providers and fast, favourably-priced production. However, Vistaprint does also have its weaknesses: There is no personal interaction with the customer and at least up until now they haven’t offered custom-made designs. But this could change rapidly, if Vistaprint enters partnerships or franchise agreements with promotional products distributors.
On the theme of the European umbrella association: What are the most important tasks the new organisation should address?
Ulrik Heidbüchel: First and foremost: Lobby work. We need a representative at European level, which represents us independently and introduces measures before the politicians do so without any input from our industry. Closely linked to this is PR work – addressing the users, media, educational institutes as well as other promotional products associations. I also still consider the theme compliance to be important, however this encompasses more than just CSR, namely also environmental protection, work and product safety as well as business practices. Last, but not least the focus should also lie on the advanced training of the member companies
You won a Promotional Gift Award in 2016 for your upcycling bag set. Have you profited from this award?
Willi Richter: Definitely, even if we weren’t able to exploit the full communicative potential that the Promotional Gift Award offers, although we are still working on this. At the moment we are negotiating with new business partners, who we came into contact with through the award. For us the award is an important marketing tool that should be taken seriously.
Were there any exciting product trends in 2016? What can you report?
Willi Richter: Of course, as specialists in the upcycling sector, we concentrate on products that arise from recycling old items. For instance, articles made out bicycle inner tubes, old wine bottles or vinyl records are currently extremely trendy. Among other things, we make bags and wallets out of the inner tubes, empty glass bottles are made into unusual bowls and kitchen accessories and vinyl records are used to produce wall clocks.
What role do you think eCommerce will play in the coming years?
Willi Richter: Of course, eCommerce is a huge trend that can’t be ignored – however the online trend also has its limits. Some of these limits can be overcome with the aid of technical developments, others will put the customers and consumers off in the long run and will ultimately lead to them returning to the traditional sales channels.
What do the customers expect regarding sustainability? Are certifications obligatory in the meantime?
Willi Richter: Overall, the industry is moving in the direction of shaping the future in a responsible way. Unfortunately, the mills grind more slowly here in the Czech Republic, but in Western Europe the focus is clearly on sustainability and Corporate Social Responsibility.
What effects is the EU crisis having on your European business?
Willi Richter: There are two sides to the crisis for us – the political side doesn’t have an impact on our business, the economic crisis on the other hand is becoming more noticeable: In a tense economic situation, marketing isn’t the top priority and customers opt for the cheapest solutions. In order to be able to hold one’s ground in this difficult economic climate, one has to come up with innovative ideas. In this respect we are well-positioned with our contemporary line-up and our upcycling philosophy.
What were the key themes in 2016?
Valentina Circo: Corporate Social Responsibility (CSR) and compliance were the decisive themes of the year for us. From the material, to the functions and usage, through to the design elements – the most important thing is that the products are safe. As importers and distributors we have a complex supply chain, which requires the interaction of different partners and involved parties, so CSR is extremely important for us. Whereby for us it is not just about observing the guidelines ourselves, but also about explaining the risks and backgrounds to our customers in order to enable them to make the right decisions. We act in full awareness that our products represent our customers and their corporate image – quality, reliability and the observance of legal guidelines are decisive for us.
How do you guarantee that you comply with the comprehensive guidelines?
Valentina Circo: Cipi has been certified according to the standards ISO 9001 (quality management) and ISO 14001 (environmental management) for over 15 years, and we place great value on the fact that our employees are always completely up-to-date regarding EU regulations and compliance guidelines. Furthermore, as the Italian member of the international distributor alliance, Ippag (International Partnership for Premiums and Gifts), we have been expanding our own “Suppliers and Partners Audited Platform” for several years. Here every supplier is called upon to work together with us to ensure observance of the legal provisions. This platform is the result of years of efforts and enables members to choose the appropriate suppliers worldwide from companies that act responsibly.
To what extent is the current crisis atmosphere in the EU affecting you?
Valentina Circo: As Ippag member and part of the joint-stock company IGP (Ippag Global Promotions) we, as service partners, are able to fulfil international contracts that are centralised via the IGP headquarters. With a presence in over 50 countries worldwide – spread out over all five continents – the organisation offers a unique service package including integrated logistics, IT, product development and brand management. Being part of an international network is the only sensible answer to the globalisation and allows us to act independently from local crises.
Are there any significant product trends? What can you report?
Valentina Circo: Leisure products for smartphones and innovative technical gadgets are the absolute rage. Sustainable products and promotional products for a healthy lifestyle are also becoming more and more fashionable. Simple and healthy – these are the current buzzwords.
What will the promotional products agency of the future look like?
Valentina Circo: From promotional products through to online marketing services and logistics – the agency of the future is a “one-stop shop” with all the advantages and flexibility of a virtual shop.
How did the fiscal year 2016 go for you?
Luca Bortoletto: The promotional products market in Italy showed significant recovery this year. September to December are the months in which we make the most turnover and the final balance is not yet available, but so far we have achieved the goals we set ourselves at the beginning of the year. More than that – we are expecting a 15% increase in turnover for 2016 compared to last year. USB sticks still remain to be our core business, however the fact that we have expanded our product range to additionally include designer items as well as Christmas items helps us to accommodate the individual needs and requests of our customers. Our own designs are an important way of asserting ourselves on the market. Furthermore, we have expanded our range to include express items in line with the strongly increased demand. Many customers need individualised and ready-fordispatch products within 72 hours.
The EU is experiencing a crisis. Is this having an effect on your European business?
Luca Bortoletto: Over the course of the years we have extensively invested in the internationalisation of the company, in terms of both staff and marketing. Furthermore, in addition to the Assoprom in Italy, we took part in two new roadshows in Spain and Germany, the Fyvar Roadshow and the GWW Newsweek, and are cooperating with important European distributors – a strategy that enables us to be present in all European countries with our products. Thanks to our dynamic engagement, a comprehensive service offer and a modern portfolio, we can to a large extent compensate for negative influences on the market.
Which challenges do you see arising in dealing with the promotional products trade?
Luca Bortoletto: Our experience shows that the customers are becoming more and more demanding: It doesn’t suffice to manufacture a communicative product, the functionality and quality are equally as important as the design and originality too. Of course, all of this should be available within the shortest delivery times possible. Our daily challenge is convincing the trade of our unique, innovatively designed products that have an unbeatable price/performance ratio. Thanks to our production in China, which we control directly, we can guarantee the fast delivery of high-quality goods. For 2017 we have set ourselves the goal of making further optimisations across the supply chain. We are additionally working on exciting product novelties, which we will present at the beginning of next year.
Observing the legal guidelines and the related documentation required becomes more and more time consuming – what is your stance on this?
Luca Bortoletto: Naturally the legal guidelines involve extra work for us – we have to assume responsibility and commit ourselves to complying with the provisions and fulfilling our obligation to document everything. I am nevertheless still of the opinion that the strict regulations can only have a positive effect on a market that is overrun with low-quality products. One especially has to be careful in the electronics segment here, otherwise harm could be caused to the environment and the consumers.
How has 2016 been – how has your turnover developed? Have there been fluctuations?
Matt Franks: Despite a post-Brexit dip in sales for three months, Fluid Branding’s turnover has increased 72% year on year from 2015 to 2016. The market seems to have recovered significantly since August 2016.
Europe is stuck in the middle of a crisis. Are there any consequences for your pan- European business?
Matt Franks: Fluid Branding’s pan-European business continues to grow, with the consequence that we plan to establish offices in the main European markets over the next 12 to 24 months. We are currently seeking staff and opportunities to help with this expansion.
Which kinds of distributors are economically viable? Has the medium-sized distributor got a future?
Matt Franks: Distributors will still be viable regardless of size, but relevant to different audiences. I see a consolidation in the industry over the next few years, with large distributors growing larger and servicing a dominant sector of the market. Regulatory issues around product safety and compliance, CSR, quality management etc. will lead to larger brands buying from distributors with the resources to meet these legal and social requirements.
Will the orientation of the PSI perform a further shift towards end users in the coming years?
Matt Franks: Supply chain transparency will continue to evolve and those distributors adding real value to the process will thrive. PSI’s move towards end user engagement is a reaction to a changing attitude in the market, which I believe is a healthy one.
There are currently initiatives for founding a new European umbrella association. Which are the most important tasks a new organisation for the European industry would have to fulfil?
Matt Franks: Addressing the issues of product safety and compliance must be high on the agenda of a European trade association. Improving the end user perception of our sector is also critical to growing the market, with research and education underpinning the move to a more professional industry. Another area of benefit would be the reduction in frictional cost within the supply chain. Standardisation of product data and communications would go a long way to achieve this, although attempts so far seem to be much like herding cats. It’s definitely easier said than done
What is your résumé for the year 2016?
Wolfgang Bosch: At Mitraco we will celebrate the best year since 2005. In conjunction with the European Football Championships in France, we succeeded in achieving an enormous plus in the existing business. The major reason for the increases in the standard business were new customer acquisitions and the business field expansion among the existing customers. The marke[ding] event in Vienna was very relaxed this year and brought us a lot of European business. Our own “Open Day” was a sensational success.
What developments are currently characterising the Far East business?
Wolfgang Bosch: Import products account for around 50% of the increases we made. One trend: The decision-making processes of our customers take longer and longer, so that today approx. 35% more orders have to be wound up by air freight compared to the same period in 2015. We are noticing that the economic situation of our partners in the Far East is much tenser than in past years. We are often no longer contacted in writing, but instead by phone. On several occasions we succeeded in winning orders together with our regular suppliers. For example, we take part in auctions, which our supplier also joins per Skype so that he can co-decide how far he wants to go. In general, we are observing that due to the difficult economic situation in China we are having to work even more accurately – from the enquiry through to the settlement. We have managed to take a major and necessary step in the on-site standardised inspection process. Further steps are planned for the coming year that will allow us to work more closely with our regular suppliers.
Were you affected by the Hanjin shipping company crisis and if so, in what form?
Wolfgang Bosch: We were ultimately very lucky. There was a delay with the quality control on a big import order, which led to us missing the loading date on the Hanjin ship so we had to switch over to another shipping company.
The digitalisation of processes is constantly progressing. What role will themes like eCommerce, but also web-to-print solutions like those offered by Vistaprint or Spreadshirt, play within our industry in the future?
Wolfgang Bosch: We have started to implement our concept for the eCommerce and online segment that we launched mid-year. We have hired an online marketing specialist, who will be responsible precisely for this segment.
How can a promotional products agency align itself here so that it is fit for the future?
Wolfgang Bosch: That is a very difficult question. On the one hand we are struggling with the transparency of the market, on the other hand only part of all of the information and applications needed to deliver a perfect product is conveyed. It is becoming increasingly more difficult for our customers to stay on the ball and find the right balance between safety and price. I think we have to shape our future more proactively and keep a close eye on the market. Unfortunately, our representatives are not as vigilant in this area, which is why we have decided to leave the Austrian association VOW and set up our own platform.
Has the standing of haptic advertising improved among the industry customers?
Beat Nolze: Yes, it has shown a positive development. For example, after years of efforts the Swiss Promotional Products Association has succeeded in being included in the official Swiss advertising statistics. So, promotional products now also belong to the “Swiss advertising pie”, where they are positioned in terms of turnover directly behind press, direct marketing and TV – ahead of classic media such as outdoor advertising and radio and also in front of online advertising. Based on surveys, it was also possible to scientifically prove the selective nature of the impact of the promotional products. So, haptic advertising is finally receiving the overdue credit it deserves.
What role will web-to-print solutions, like those offered by Vistaprint or Spreadshirt, play in our industry in future?
Beat Nolze: These solutions will continue to gain significance for standardised products. The possibilities are impressive, however this can’t replace the consulting and additional services. A specially manufactured promotional product that makes the advertising message of the customer tangible, is still superior to every standard product by far – even if the latter has been produced fast and automatically.
eCommerce is also an important current topic of conversation within the industry. How important do you think it will be in the future?
Beat Nolze: eCommerce will without doubt continue to gain more significance within the promotional products sector. For us as a small agency it will however give us the chance to assert ourselves as a niche player. Contrary to big data and anonymous algorithms, our aim is to establish long-lasting customer relations through our consulting skills and additional services and we strive to reinforce and expand our relationship of trust through personal dialogue. As a result of our long-term industry know-how and established supplier contacts, we can outmatch the albeit fast, yet superficial Google researches in terms of both quality and creativity. Many products cannot be found at the flick of a wrist in a few clicks – competent consulting, customer and supplier knowledge and a regular personal exchange are necessary here. In this way, the distributors can distinguish themselves from standard solutions and earn themselves the corresponding profile.
The legal guidelines get stricter all the time, the obligations more comprehensive and also the documentation is increasingly more work intensive. What are your experiences here?
Beat Nolze: As a BSCI member, continually improving the working conditions in the production countries is an important issue for us. This is not possible without financial support or the investment of effort, however the commitment in this area prevents the positive emotions that promotional products trigger off from being tarnished by having a bad conscious. Indeed, it is however often a true challenge to find one’s orientation in the international and national juridical jungle of regulations. And as well as demanding the strict observance of all the guidelines, many customers still expect rock bottom prices.
From a Swiss point of view, what do you think about the target group expansion of the PSI Show?
Beat Nolze: As distributors, we are definitely not viewing this opening with indifference. We are not expecting a rush of Swiss industry customers to visit the PSI. But it is important that everything is dealt with in an orderly fashion and, as announced, is properly controlled. The top priority must be that the manufacturers and promotional products distributors cooperate closely in a trustful manner to make haptic advertising more well-known to a broader public. Personally, though I can well image that the PSI will be almost too overwhelming for certain industry customers. In my opinion, smaller trade show formats suffice to demonstrate the diversity of the products and ideas in the haptic advertising segment.
How did the fiscal year 2016 go?
Konstantinos Georgiadis: 2016 was a strange year with a lot of ups and downs, which led to a 20% reduction in our turnover compared to the previous year.
Europa is in a crisis. How is that being perceived by the Greek economy?
Konstantinos Georgiadis: At the moment Europe is only a spectator of the global changes, without it taking action to support the citizens of Europe or offering the trade reliable securities against the penetration by competitors from the Far East. In my opinion, the Europeans have to look after their co- Europeans and protect the trade before it is too late.
Which role will eCommerce play in the future?
Konstantinos Georgiadis: According to my estimations, 80% of the worldwide trade will be wound up via eCommerce in future, especially in the segment of low-priced products.
How will the promotional products trade develop as a business form? Which models are future-oriented?
Konstantinos Georgiadis: There will always be potential for all possible forms of the promotional products trade, because personal relations will continue to play a big role in the European business. Medium-sized distributors should thus make an effort to create attractive eCommerce shops and concentrate on reliable customers and certainly avoid risky deals. Flexibility is furthermore an important factor for successful trading.
What demands are the end users making?
Konstantinos Georgiadis: End users want above all short delivery times, small volumes and high quality – they are increasingly searching for products that are good value for money. The more demanding customers frequently ask for custom-made designs, plus there is a strong trend towards products that are individually designed for the customer and to top all of this, the products also have to be useful, of course.
What was the most frequently discussed issue in 2016?
Colin Loughran: The Brexit was definitely the most discussed issue. Concerns included exchange rates and the impact on UK prices, as well as possible tariffs, customs delays and general restrictions on the movement of goods and people after Brexit. Our Head Office in Dundalk is beside the Irish border, and there are unanswered questions as to whether we will have a “hard” border with Northern Ireland after the Brexit.
To what extent have the turbulent events of the year affected your business?
Colin Loughran: The Brexit vote had a minor impact on our UK business due to the falling pound. We honoured UK catalogue pricing for the full year and took a hit on our margins, but thankfully that was offset by significant UK growth. On a personal level, the Goldstar team were deeply moved by both the terror atrocities in Europe and the growing humanitarian and refugee crisis. We are proud that some of our team helped to ship multiple 40 foot containers of aid from Ireland to Greece and are still helping those in need today. In these challenging times it is important that we all work more closely together for the betterment of the whole industry.
Which trade shows are must-attend events?
Colin Loughran: PSI is always the must-attend event, along with CTCO in France and the Promotional Product Expo in the UK. We are particularly excited and honoured to be joining HAPTICA® live in Bonn for the first time next year and we look forward to the new Merchandise World event in the UK, co-organised between BPMA and Sourcing City. We believe Merchandise World is exactly what the UK market needs at this time.
To what extent will the target group expansion of the PSI Show change the face of the event?
Colin Loughran: We expect a much busier and more worthwhile final day. As someone who has worked on both the distributor and supplier side, I believe this is a great opportunity for our industry to come together to ‘wow’ end users. Inviting end users can help remedy the disconnect between promotional products and overall marketing strategies. The most tangible vehicle to engage with an audience – promotional products – is often an afterthought when it can and should be at the forefront of marketing campaigns. Evidence shows that promotional products are important and successful in lead generation, sales cycles and customer recruitment. In addition, the opportunity for interaction between the distributor, supplier and end user is ideal since the supplier can impart detailed product information and applications.
Do you see any challenges in the interaction with the promotional products trade in everyday business?
Colin Loughran: Our biggest challenge is always to achieve continuous improvement in everything we do: To provide our customers with the products they need and best possible service, at a price which allows them to achieve healthy margins for their business.
What is your balance for the year 2016?
Daniel Liba: We can look back on a very successful year in 2016 especially in terms of the international business. By taking over Gateway CDI in Saint Louis (USA), the Brand Addition family expanded further and thus increased its global presence with more own employees. Many of our group customers are pleased about this expansion of the business area and take advantage of both the local and the worldwide benefits. The situation is similar with the subsidiary in Shanghai (China). In Germany, we have been able to profit from winning the bids of several renowned companies and have implemented a new ERP system. After the additional introduction of a brand-new web shop system and the restructuring of our agency in Germany, we feel that we are well-aligned for the future.
Which product trends have characterised the year?
Daniel Liba: To be honest, I would describe the year under the motto “old friends in new colour”. I haven’t really perceived any comparable “real trends” as in the last years, like for instance the power bank or the fitness tracker. However, the odd manufacturer discovered the themes “haptic” and “special customising techniques”. I always say: “A pen, is a pen, is a pen.“ But what turns the pen into a special and appropriate pen for our customers? Here, customising techniques and haptic experiences can make the decisive difference.
Is merchandising a growth market?
Daniel Liba: In the sport merchandising sector, the expenses have remained more or less the same – we are counting on a stagnating to slightly improved development. Whereby the generation Z and the emerging YouTube movement are opening up totally new fields of business. This is why we are investing in the development of merchandise programmes for Google and YouTube, which are sold via our web shops as well as in the stores in London and Dublin.
What do the industry customers expect in terms of sustainability and social responsibility? Are certifications obligatory in the meantime?
Daniel Liba: The demands of the industry customers are definitely increasing in this respect. These themes are gaining more and more significance in the major companies’ invitations of tender. Here, the orders are not exclusively awarded on the basis of the prices. Sustainability and CSR are also the focus of the appraisal. This is why we started at a very early stage having ourselves audited by independent service providers. The audit we passed last was the ISO 50001 (Energy Management). And because the enquiries from the industry keep on increasing, we have decided to have ourselves assessed by EcoVadis. This will make it easier for our customers to call up the information needed short-term and for us to be subject to benchmarking.
The European industry is striving to bring a new European promotional products umbrella association into being. What would be the most important tasks of a “new EPPA”?
Daniel Liba: Although there are national associations like the GWW in Germany, an interest group at European level would definitely be advantageous. Especially industry-related lobbying among the political decision-makers would be an important task to assert the mutual interests. Furthermore, the PR and marketing sector is highly significant in order to make sure the promotional product remains attractive as an indispensable part of the marketing mix despite the increased globalisation.
What can promotional products agencies do themselves to remain attractive and to also assert themselves in future?
Daniel Liba: In my opinion there are three important points here. On the one hand, agencies today can’t get around a modern and short-term scalable webshop solution and digital marketing channels today. Here, one certainly has to also compete against Amazon and co., both in terms of “look & feel“ and the functionalities. Secondly, when serving major international groups it becomes more and more important to have a global alignment, because they strive to move away from local in favour of central solutions – in order to protect the most important thing – their brand and to guarantee the group the best buying conditions, processes and CSR standards possible. And last, but not least creativity and tailor-made consulting plays a decisive role in accompanying the marketing campaigns of big brands and concerns.
You have been the Sales Director B2B at Inspirion since December 1, 2015. What is your balance after the first year?
Jörg-Peter Helmers: A new job always brings many surprises with it, but that is what makes it an exciting challenge. 2016 was a strenuous, but also very successful year at Inspirion. Together with my sales team, we succeeded in conveying the rough charm of the people from Northern German in a pleasant way and positioning ourselves as a promotional products suppliers from the water front.
Which trends are dominating the market?
Jörg-Peter Helmers: The digital world is omnipresent. Everything happens now, straight away. Amid such overstimulation, it is not easy to attract the attention of the customers. A comprehensive network makes a lot of things easier, but it also means that the service demands increase. That is why Inspirion is pushing the expansion of the logistics centre.
How did the export business go?
Jörg-Peter Helmers: The development of the turnover in Western and Eastern Europe has been really good. Because we deliver promotional products to almost every European country, the overall export turnover is higher too than if we were to observe the German market separately. The business in Germany is however very satisfactory.
What developments are currently having an impact on the Far East business?
Jörg-Peter Helmers: At the moment, all promotional products suppliers are confronted with increases in raw material prices, sea freight costs and wages. In order to buy products at the best price/performance ratio, we are in constant close contact with our suppliers and exploit our long-term experience in doing business with the Far East. Thanks to our own buying offices in Asia, we can react to changes fast on-site.
The legal guidelines become increasingly stricter, the obligations more extensive and the documentation more time-consuming. What are your experiences here?
Jörg-Peter Helmers: Even if it is more work, the customer has to be able to rely on the fact that we comply with the obligations. In order to survive on the European market, for Inspirion among others conformity declarations are matter of course. This is why we continually further develop our quality management. Furthermore, as a BSCI member we also assert ourselves for the observance of social standards.
What challenges do you foresee in dealing with the promotional products trade?
Jörg-Peter Helmers: Even if we are reachable at all times due to the digitalisation, the personal contact with the customers remains to be an important part of the sales work for me. The challenge lies in taking the time to build up or intensify partnerships.
What are you looking forward to in 2017?
Jörg-Peter Helmers: I am looking forward to doing good business with the promotional products trade and to lots of interesting trade fairs, which of course also include participating at the HAPTICA® live. I am really curious about it already. Inspirion is of course also planning some really interesting further developments for 2017, which our customers can certainly look forward to.
<Triple anniversary at Kalfany Süße Werbung: How did the anniversary year go?
Fritz Haasen: An anniversary in itself is evidence of the stability and ability to assert oneself on the market. We were also able to prove this in the 35th year of our existence. The year got off to a very good start for us, but we had to wait a long time for the Christmas season to kick off; and now everything is happening thick and fast again. Decisions are taken later and more last-minute – which doesn’t make things easier. But the way we are set up, allows us to cope with this too.
The sweets segment has experienced enormous development over the last years: More and more suppliers are forcing their way onto the market with new ideas. Does this wide range of offers among the suppliers whet people’s appetite even more for sweet advertising or does it quite literally cause a saturation of the market?
Fritz Haasen: Basically the following applies: Competition is good for business and this equally applies for both the suppliers and the customers. For us that means we strive for constant further development, i.e. create new products, react to the needs of our customers fast and flexibly and of course are prepared for the demands of the permanently changing market. The customer is inspired by the wide offer and the small category of sweets attracts the attention it quite rightly deserves as a promotional messenger within the marketing mix.
The legal guidelines get stricter all the time, the obligations more extensive and the documentation is more and more time-consuming too. What experiences have you made in this connection in the food sector?
Fritz Haasen: Yes, that’s right, it becomes increasingly more laborious and on a European level some things go well beyond the mark. However, as a certified manufacturing company we are extremely well organised and are regularly faced with these strict tests. This adds security to the procedures, declarations and documentation and of course our customers can also rely on this. Because, after all, sweet advertising is all about edible food, which convinces with its taste, quality and effect – our recipe for successful sweet advertising. However, what we get our hands on from some other suppliers while we are researching products is sometimes more than borderline and does more damage to the category than anything else – as healthy as having competition may be.
“Made in Germany”, sustainability, organic certification, vegan jelly babies – do companies from the promotional products sector buy more and more consciously or is price the key decision criteria at the end of the day?
Fritz Haasen: It depends on the customer, the project and the briefing, it is rarely ever just black or white, which is a good thing. We can all implement the points you just mentioned. But ultimately the product has to remain representable and affordable. The price also always plays a role in line with the budget specifications.
Do user trade shows contribute towards increasing the standing of haptic advertising in the users’ eyes?
Fritz Haasen: A definite “Yes”! Advertising is all about ideas, inspiration, creations that in the “ideal case” these are conveyed using all senses: Seeing, hearing, feeling, smelling and of course tasting (sweets). How could this be more readily and more efficiently conveyed to the target group than at such events? The target group extension of the PSI Show is a further opportunity in this respect, as long as the market rules are adhered to.
What are the challenges for the future?
Fritz Haasen: To keep the quality and safety of our category as high as possible, but also to keep the prices acceptable too as well as actively co-shaping the rapid digital development.
How did the year go for you?
Alex Roethlisberger: There was a lot of insecurity on the market during the first six months. That was among others due to the crisis in Europe and the strong Swiss Franc. What’s more, the Swiss watchmaking industry is experiencing a crisis and the tourist industry is also flagging which ultimately also has an effect on us. But then things went very well from August onwards, so that we can look back on a positive year, in which we carried out some very nice projects.
Generally, we are noticing that we have to do more and more to keep the status quo, i.e. increasing our efficiency and service level were major themes again this year. The customers expect a perfect service at the best possible price.
The digitalisation of processes increases constantly. Which role will themes such as eCommerce, but also web-to-print solutions as offered by Vistaprint or Spreadshirt, play in our industry in future?
Alex Roethlisberger: If the customer is demanding standard products as well as fast and favourably-priced procedures which cause him as little effort as possible, suppliers such as these have to be taken seriously as rivals.
We also offer consulting services, place a strong focus on custom-made designs that provide added value and which are tailor-made to suit the customer in terms of the choice of product, design and materials. This is the only way to distinguish oneself from the masses, attract attention and generate a sustainable promotional effect. There are already far too many mass-produced goods around. It is very short-sighted of people to only look at the price.
What does the industry customer expect in terms of sustainability?
Alex Roethlisberger: In the scope of CSR, certified products and factories are a must today. Perfect quality is a prerequisite, as well as controls across the entire supply chain. Without certificates it is especially no longer possible to do business with groups like L‘Oréal for instance, here much more than just complying with the likes of Reach is demanded.
Do you have the impression that the standing of haptic advertising has improved among the users?
Alex Roethlisberger: As a result of the strong digitalisation, haptic qualities – as a tangible counterpoint – have gained in popularity. Creativity and quality also play a major role in this connection, because this is what makes the full impact of promotional products enfold. However, we haven’t got to the point we are striving to reach yet. Improving the image of this marketing tool is a mammoth task. Trade fairs that address the users directly can without doubt speed up this development.
In this connection, what do you think about the target group expansion of the PSI Show?
Alex Roethlisberger: t may allow the PSI Show to increase its attendance. It won’t bring the distributors any added value though. On the contrary: Which distributor has the time today to guide his customers around the show? Events like the marke[ding] are much more suitable for this purpose. In my opinion that is the right course to take.
To what extent have the turbulent happenings of the year had an effect on your business?
Thomas Herriger: The experiences of the last decades have shown that such turbulence doesn’t directly have an impact on the annual results. It has more of an indirect effect and there are always seasonal fluctuations. Since England is not one of our main suppliers, we don’t think the Brexit will cause us any direct problems. It is more the election result in the USA that is worrying us.
The legal guidelines are becoming stricter all the time. From December 6 onwards, the EU guideline 2014/95/EU additionally comes into effect. What experiences have you made in this area?
Thomas Herriger: Basically, we are being confronted with an increasing number of comprehensive formal demands in many different areas. Here the impression is aroused that it is actually exclusively about formally meeting these demands, whereby the inter-company effort these require is very cost-intensive. The big companies have long since disposed of a sophisticated CSR concept and thanks to initiatives like the BSCI, which we have been a member of since 2013, a lot has been done across the supply chain to achieve better working conditions for the people in the so-called third countries. This is good and important and it should also be subsidised and promoted by the state.
We already had a code of conduct, before other companies even knew what it was. In our industry respecting human rights above all means only purchasing goods from suppliers who – if they are not certified – can at least prove that they have a self-obligation towards the global compact. We check this on an annual basis. In order to be able to guarantee that the guidelines are actually complied with on-site, we work closely together with our sourcing office, ISL, in Hong Kong and cooperate with the local certification companies there.
You won a Promotional Gift Award 2016 in the category Merchandising for your Jerry Cotton collection. Is merchandising a growth market?
Thomas Herriger: Yes, it is a growth market, but also a very special form of marketing. Unlike give-aways and typical promotional products, for the brand owners it is advertising that earns money. It is not just about advertising a product or service here, but much more about creating an independent experiential world for fans. Which is not always an easy task; after all the demanding fans often know every single detail of their favourites. In spite of this or perhaps precisely because of this, merchandising is one of the most exciting challenges that haptic advertising offers – and it has a fixed place among the range of services we offer. After such a short space of time, it is not possible to express the impact of the Promotional Gift Award in figures, however a positive response towards our company is recognisable.
How do users assess haptic advertising? Do user trade shows contribute towards improving the image of haptic advertising?
Thomas Herriger: In my opinion the standing of haptic advertising has improved and will continue to do so, particularly in the era of digitalisation. At the end of the day the world of haptic advertising is about idea-driven, individually tailor-made solutions – as a promotional products agency we have to impress our customers with creative offers for the implementation of this form of advertising.
User trade shows definitely contribute towards making haptic advertising experiencable and comprehensible, however they frequently offer just a small insight into standard solutions. Really successful haptic advertising concepts only arise in collaboration with the customer. The respective aims have to be precisely defined so that the advertising measure fits in with the customer and his needs.
Do users tend to look for standard products more or for individual custom-made designs?
Thomas Herriger: In our experience, users are looking for specific and creative solutions for their company or brand. But then when it comes down to the price of the item, they often opt for standard solutions instead.
What was your most challenging order this year?
Thomas Herriger: We set up a promotional products shop with totally new functions for a new customer, a bank. Here a budget administration function was required for the accredited users. The orderer can order goods until his budget is used up. Furthermore, we created a leasing function, so that a subsidiary of the bank could hire an exhibition stand via the shop. Furthermore, we took over responsibility for administrating the entire brochure and office material warehouse comprising of over 300 different articles for the customer. That was an exceptional performance within the time frame of just ten weeks.
What is your résumé of this year?
Markus Freisberg: We were able to slightly increase our turnover in the year 2016, particularly the 500th anniversary of the German purity law for beer led to positive effects in our core business. In the promotional products area we were able to score top marks with several big end consumer campaigns in the pharmaceutical sector. It proved a big advantage here that we are able to deliver larger order volumes within short lead-times.
Even if it is not always possible to reinvent the wheel, which market or product trends dominate your offer?
Markus Freisberg: We have made it one of our priorities to establish the promotional glass as an integral part of every collection of promotional products. The drinking glass is already implemented by the consumers more frequently and for longer than the coffee mug for instance, which is one of the top 10 classics. Our sets of 4 have enabled us to develop this theme into a compact and practice-oriented solution, we will be introducing a further glass shape at the PSI Shop. These sets go down very well and also reflect an industry trend: a move away from disposable items, towards sustainable and useful products.
Rastal won a Promotional Gift Award 2016 in the category “Best Practice” for the glass Cuba designed for a pharmacist’s chain. What standing does the award have for your company?
Markus Freisberg: The “industry Oscar” definitely has a positive effect: It draws the industry’s attention to a specific idea and encourages a creative dialogue. We were able to carry out further promotions using our topsy turvy glass, the item became an integral part of our line-up.
Thanks to an in-house design department, Rastal can make exclusive glasses and cups. Are we noticing a trend towards individual custom-made designs?
Markus Freisberg: Individual implementations of shapes are relatively costly due to the materials we use. That is why we try to win over the customers with creative concepts that can be implemented immediately – like the 4-piece topsy turvy glass set with an individual logo imprint. Really exclusive concepts are the icing on the top. Due to the really high order quantities, these products are only possible for the big players, who in return dispose of an incredibly strong marketing tool.
Do you think user trade fairs can contribute towards improving the standing of haptic advertising?
Markus Freisberg: In addition to the PSI Show, which is still always the industry platform, we have also added the HAPTICA® live to our event diary as a part of the fixed schedule. It remains to be seen how the new concept of the PSI Show in Düsseldorf develops. We will accurately brief our sales team in advance about the precise communication on the “Industry Day” (i.e. no information on discounting, asking unaccompanied visitors for their distributor partner in charge). Initial experiences – also at the HAPTICA® live – have shown that as long as the price policy is handled correctly and communication with the distributors are trusting and open, this opening could have extremely positive effects. Such presentations will enable haptic advertising to attract more attention, they demonstrate to the advertisers how diversified and creative the industry is. I think we all agree: A bit more positive publicity for reasonable three-dimensional promotional products can certainly do no harm.
What is your résumé of the fiscal year 2016?
Steffen Jöhl: Although the first half of the year was rather mediocre, as usual the Christmas business is achieving high revenue – overall our turnover has remained stable. At the beginning of the year the price structure had to be adjusted in line with the market conditions, which was true for most of the manufacturers. Particularly the exchange rate of the dollar played a large role here. Nevertheless, we mastered the balancing act – also with regards to the compliance regulations of the promoting companies – very well and unlike the previous year we didn’t have to face any bigger challenges. The turbulent political occurrences and the present crisis situation within the EU have hardly had an effect on our business, the core markets like France and the Benelux countries have remained stable.
Which product trends have you observed? What is particularly in demand?
Steffen Jöhl: There is still great demand for high-quality articles, discrete decors that reach a wide-ranging target group are especially en vogue. Unfortunately, the budget expectations are however frequently unrealistic – brand items are on the wish list, but the budget only suffices for give-aways. It is very pleasing for us that the new EU guideline on the reduction of plastic bags and the corresponding agreement between the trade representatives and the German Ministry for the Environment has led to a significant increase in the sales of our shopper models – with an upward trend
What do you think about the German association GWW? Are you noticing changes within the industry since the amalgamation into a uniform association?
Steffen Jöhl: It is very important for us that the distributors and manufacturers all pull together in the same direction – we need a single voice. Of course, it will take some time until the first effects of the joint work become noticeable, but in my opinion the association is on the right track. Especially the Trend event organised by the GWW was expediently optimised by relocating it from Neuss to Mannheim and reducing the format down to one day.
What is your view on the target group expansion of the PSI Show? Will the Industry Day change the event?
Steffen Jöhl: In our opinion the target group expansion is a very positive development. After all a similar concept is already implemented at many shows, whether they are classic distributor’s in-house shows or trade fairs that are organised by several promotional products agencies as sponsors. It is more expedient if the manufacturer advises the industry customer, but a three-way dialogue including the corresponding distributor is of course ideal. However, the interests of the distributors may conflict with one another, if big industry customers opt for one distributor as their trade fair escort and others are left out in the cold. The coming years will show whether this new strategy does down well or not.
Merz sold Senator to Perusa earlier this summer. What effect did the company changing hands have on the business?
Ralf Uwe Schneider: A positive one! Within the shortest space of time, a typical medium-sized structure was established by the new owner, by pursuing the course that had been set at the beginning of 2016. The focus is on continuity, service, delivery performance and quality. The changing of hands did actually bring several tasks with it, but we have made extremely good progress and are very satisfied with the overall fiscal year 2016. Our turnover is significantly up compared to the previous year, indeed it was much higher than the 2014 figures for most months of the year. The margins are stable, we don’t buy turnovers with discounts or dumping prices.
Is the ban on promotional products by the pharmaceutical industry having an impact on the writing instrument segment?
Ralf Uwe Schneider: Yes, seven-digit turnovers have simply ceased to exit. The lobby work to moderate or revoke the “pharmaceutical ban” shouldn’t stop – for the well-being of the overall market. The GWW initiative on the theme of compliance will possibly help us all a great deal.
How have the order volumes developed in general?
Ralf Uwe Schneider: The digital printing technology has taken the promotional products market by storm big-scale and is making smaller order quantities possible at affordable conditions. The industry customers are placing orders in a more and more targeted manner, Senator is well-aligned to accommodate these needs.
Is “made in Germany” quality demanded more frequently by users?
Ralf Uwe Schneider: In the dialogue with the industry customers, i.e. at in-house shows, the origin of our plastic writing instruments “100% made in Germany” meets with a great response. We will thus further reinforce the conscious communication of our core values, especially since this label also stands for sustainable and environmentally-friendly production under excellent social conditions.
You won a Promotional Gift Award 2016 for the high definition print. Has this had a positive impact on your communications?
Ralf Uwe Schneider: The PGA 2016 gave our distributors a significant and noticeable impetus to occupy themselves with this unique technique, which combines the finest HD resolution with elegance and a haptic experience. Especially the daily ability to realise all imprints, line and grid motifs, fine lines or full-surface designs for an incredibly favourable price has turned HD printing into a success story.
How do you evaluate the work of the German association GWW?
Ralf Uwe Schneider: Everything that belongs together is growing together. All activities of the newly-merged GWW serve to uphold and strengthen the position of the promotional product. We have joined forces and are putting our heads together in working committees in order to recognise the challenges and face them together. The key words are tax law, the compliance wave, the digitalisation of our communication and processes as well as product safety.
How did your turnover develop in 2016?
Alexander Ullmann: We can put 2016 down as a positive year in the uma history. We have succeeded in recording further turnover growth in the core markets. The continual investment in products, personnel and the company was also the basis for a successful fiscal year in 2016.
Were there any new trends in the writing instrument segment?
Alexander Ullmann: We place great importance on the writing instrument making up part of every well-arranged line-up of promotional products. The trend towards high-quality, durable writing instruments is ongoing and strengthens the production sites in Germany. The courageous use of colour in combination with interesting haptic surfaces is without doubt the main current trend.
And what about on the individualising technologies front?
Alexander Ullmann: We are totally up-to-date as far as the customisation of writing instruments is concerned and were able to set new technology benchmarks with our all-round mirror finish engraving on our metal writing instruments. We never tire to invest further in customising technologies, because ultimately that is what turns an uma writing instrument into a unique promotional product.
What is in your opinion the most important task of the GWW in 2017?
Alexander Ullmann: The development of the GWW is positive and the fact that the suppliers and distributors have joined forces was long overdue. The top priority must be a uniform and single voice, which in my view should be to underling the standing of the promotional products compared to other forms of advertising. This means in concrete terms, advertising the promotional product itself, i.e. highlighting the advantages of the promotional product in communication and marketing strategies and convincing the important decision-makers. The promotional product possesses attributes that beat other forms of advertising hands down. Unfortunately, only very few marketing and purchasing strategists are aware of this. This has to be altered. We also need a clear definition and demarcation between the promotional product and a gift, which will continue to occupy us in the terms of the tax legislation. Here lobby work is called for, which also has to be substantiated by measurable data.
Which trade fairs are obligatory dates in the diary?
Alexander Ullmann: Obligatory date is a big word. Principally, I think it is obligatory to inform oneself about anything new. Everybody has to define the method he uses to access this information personally. For us it is important and right to present ourselves across all possible channels. Trade fairs are still one of the most important opportunities to share not only information, but also emotions with our customers and promotional products users via the personal dialogue. The personal contact increases the standing of haptic advertising among the users and can thus only be positive for the industry and the various market participants.
How do you define the term “Corporate Responsibility”?
Alexander Ullmann: “Live and let live!” “If I am doing well, then others are allowed to do well too!” These two sentences characterise our daily corporate, but also private approach. It is a matter of course for us to take over social responsibility, not just to communicate this, but also to live it. For us this means that one initially asserts oneself on-site, creating a liveable environment that reinforces the symbiotic community. In concrete terms, we support the local provisions with a small, but fine supermarket, provide perfect education prerequisites for the youngsters in the scope of a kindergarten and the Fritz-Ullmann primary school and are currently asserting ourselves for a multi-generational house including assisted living through the Fritz-Ullmann Foundation – a further social project in Fischerbach, the village with 1,800 inhabitants. This creates ideal framework conditions for reconciling work and family life.
There was certainly no lack in challenges anywhere – on the contrary: One had to fight hard for turnovers, the day-to-day business was demanding, orders didn’t fall into anyone’s laps, nor could they be wound up in a routine manner. The demands of the users increased and were passed on along the supply chain. In spite of tight budgets and bitter price wars, the products are supposed to be as individual as possible, standard solutions often don’t suffice. “There is a strong trend towards products that are individually designed for the customer“ (Konstantinos Georgiadis, Promoland), “Tailor-made solutions are the future“ (Artur Owczarska, Citron Group).
In addition to digital gadgets, storage media and power banks, it is first and foremost “green” products that are experiencing increased popularity in the advertising industry. Sustainability remains to be a mega trend and where it is taken seriously it is becoming a guiding principle: Sustainable products cost those companies that offer them a great amount of time and money – because they are more expensive to produce and because a great deal of time and financial effort has to be invested in the certifications that lend the sustainability of a product its credibility. Audits, test procedures and the corresponding documentation have thus become a considerable part of everyday life for many – “Corporate Social Responsibility and compliance were the decisive themes of the year for us” (Valentina Circo, Cipi). Especially since in the meantime they are frequently no longer voluntary measures, but indeed obligatory musthaves. “The demands of the customers continue to increase as a result of the ever stricter product laws, regulations and compliance guidelines” (Cristina González, Clipy).
To the same extent that the demands of the industry customers are becoming stricter and stricter in terms of compliance and product safety, the legislation is becoming more comprehensive and stricter. It is not without good reason that many are hailing lobby work in Brussels as the most important function, which a European promotional products umbrella association should fulfil. “We need a representative at European level, who represents us independently and introduces measures, before the politicians do it without even having any input from our industry” (Ulrik Heidbüchel, Premium Partners). Alone: Such a representation doesn’t exist at the moment. The EPPA (European Promotional Products Association) is just about to be formally closed, the foundation of a new, more efficient organisation is nowhere in sight – despite the initiative of several industry professionals.
So the only solution is to take matters into one’s own hands and push the industry’s professionalism oneself, in order to keep pace with the demands of the customers and lawmakers. Above all for importers this proves to be a full-time job, which influences the prices and the delivery times. “The previous delivery times of three months are hard to uphold because the stricter testing mechanism can hardly be compensated for” (Stef van der Velde, Giving Europe). And even beyond the audit and testing processes, the import business was demanding this year. The tense economic situation in China is making sure of that. “The economic situation of our partners in the Far East is much tenser than in past years” (Wolfgang Bosch, Mitraco), “Due to the low prices of flash storage media a lot of companies went bankrupt and disappeared from the market” (Artur Owczarska, Citron). The production and freight costs rose further – the latter especially due to the crisis surrounding the Hanjin shipping company that went bankrupt, the consequences of which also had an impact on the promotional products industry. “We were affected by the bankruptcy of the Hanjin shipping company. Some containers were extremely late arriving at our warehouse” (Jan Breuer, mbw).
Yet, all in all, the industry customer is not interested in the trials and obstacles that the suppliers and distributors are faced with day after day: Not only the product, price and test certificates have to be in order – everything has to happen fast too. “Many customers need individualised and ready-for-dispatch products within 72 hours” (Luca Bortoletto, Maikii). Speed and flexibility are becoming decisive competitive factors. New technologies are revolutionising work processes and are accelerating the day-to-day business immensely, suppliers such as Amazon, who are elbowing their way onto the market are setting new benchmarks, the industry is finding itself in the centre of a deep-seated digital change. “From promotional products through to online marketing services and logistics – the agency of the future is a ‘one-stop shop’ with all the advantages and flexibility of a virtual shop” (Valentina Circo, Cipi).
Only very big, internationally operating agencies can afford such a one-stop model at international level – the consequence is a consolidation, in the course of which the big, multinational brands will concentrate on service providers, who are able to combine global process management with the complex demands of the market for haptic advertising. “Medium-sized and locally operating distributors are losing their appeal for multinational groups” (Ulrik Heidbüchel, Premium Partners). That doesn’t mean that the “smaller” promotional products agencies have to fear that they won’t be able to survive – on the contrary. However, it does make it necessary to define one’s own location and accentuate those services and competences that offer the user added value – the same applies for both small and big distributors, for more traditionally operating companies, but also for Internet-based agencies. “Many products cannot be found at the flick of a wrist in a few clicks – competent consulting, customer and supplier knowledge and a regular personal exchange are necessary here” (Beat Nolze, Lacoray by comTeam AG), “eCommerce is a huge trend that can’t be ignored – however the online trend also has its limits” (Willi Richter, Respiro). Creative consulting, customer loyalty and personal contact simply can’t be replaced by algorithms – which is a reassuring cognition in the light of the rapid progress.
Against this background it is good news that the interest in well-conceived haptic advertising is not waning among the users – quite the contrary: The image of the promotional product is improving, its attractiveness among the advertising and marketing departments is increasing. “Promotional products are more frequently being recognised as an important part of the marketing mix and are being awarded serious budgets on a par with the ‘big advertising media’” (Bertrand Passot, Passot Innovation), “Haptic advertising is finally receiving the overdue credit it deserves” (Beat Nolze, Lacoray by comTeam AG).
That makes it all the more important to convey the potential of haptic advertising and the creativity and professionalism of the industry to the users. Trade fairs that grant access to the buyers and the marketing decision-makers and which are becoming more and more accepted and popular on the market are an important tool here. For example, the HAPTICA® live in Bonn was staged successfully for the fourth time this year, but also in Belgium (PromGifts), Warsaw (RemaDays) or Silverstone (BPMA Show) various trade fair concepts brought all of the market participants together. Last, but not least the premiere of the industry customer day at the coming PSI Show 2017 in Düsseldorf is being hotly discussed and accordingly awaited with trepidation. “The PSI’s move towards end user engagement is a reaction to a changing attitude in the market, which I believe is a healthy one” (Matt Franks, Fluid Branding), “I believe this is a great opportunity for our industry to come together to ‘wow’ end users” (Colin Loughran, Goldstar Europe). How the premiere of the industry customer day goes will be one of the first cognitions that the New Year brings, followed without doubt by many further exciting developments. And because this industry monitor is of course not an obituary, but intends to be a constructive stocktaking, we shouldn’t be looking back, but instead primarily ahead to the future: To a New Year that will most certainly bring many challenges and hopefully even more good news with it.
// Till Barth