Digitalisation is omnipresent, the technical change is fast-paced. For a long time it seemed like the promotional products industry had missed the boat regarding the digital era, now more and more market players are occupying themselves with the prevailing theme of our age. In a new series eppi magazine is outlining the opportunities and risks, initiatives and visions of the digitalisation on the promotional products market.
In the history of evolution, one generally talks about very long periods of time: It took mankind 6 to 7 million years to gradually move away from the apelike conduct to develop into homo sapiens via intermediate forms like the homo habilis and the homo erectus. However the human race seems to have skipped to the next evolution stage at breakneck speed: It only took a few decades to develop into the “homo digitalis”.
“Digitalisation is the topic of our age and the speed at which the changes are cascading over us will be breathtaking,” according to the digital expert, Ibrahim Evsan. The use of the future tense weakens the statement slightly, but the reality is: We already find ourselves in the midst of the change and the speed is indeed remarkable: It is only just over eleven years ago that Steve Jobs presented the first iPhone to the enthusiastic audience in his legendary keynote at the MacWorld Expo. Hardly any other invention – not even the car – has transformed the society worldwide within such a short space of time as the smartphone. The possibility of accessing the Internet using a mobile device has not only had a massive sustainable influence on the communication and consumer habits, but also on the working world, has paved the way for the success of the social networks, evoked new civilisation illnesses (“mobile phone necks”, “mobile phone addiction”) and has revised the education methods of the parents of pubescent children: Whereas in the past the kids were given “house arrest”, today the punishment is “a mobile phone” ban or in the stricter form a “display ban“.
Blessings and downsides
A video that took YouTube by storm a few years ago has become a symbol of our epoch: A small girl desparately trying to zoom the pages of a magazine by spreading her thumb and index finger as is customary on the display of a tablet. The reading and media habits are changing from the earliest age, other phenomena of the digital era appear to have a much more serious effect and have much more far-reaching consequences for the individual and the society: worldwide networking, organs from the 3D printer, driverless cars, sex with robots or moving items using streams of thoughts – a lot of things that sounded like science fiction just a short while ago, are meanwhile state-of-the-art or at least prospects of the immediate future. The digitalisation is omnipresent in our everyday lives: Listening to music via Spotify, scanning items at the supermarket till, finding one’s way using navigation systems, getting fit using wristbands, communicating with Alexa… however all these blessings of the modern age also have their downfalls: The updating madness and underdeveloped Beta versions may be tedious, however the destruction of jobs, the transparency of intimate data, the distribution of fake news, the addiction of raising one’s profile via the social networks, not showing manners in chats and comments and the constant accessibility are problems that the society has to address and for which solutions have to be urgently found.
One of the pitfalls of the digitalisation: The products are trimmed towards user-friendliness, however the processes that run in the background are difficult to understand. Whereas how the petrol engine works was at least understood by a technically-minded layman and hobby mechanic, not even the people who have programmed them understand the algorithms of a search engine. This creates enstrangement and the feeling that one is dependent on technology. In the meantime many people react wearily to the theme digitalisation. The scepticism is spreading.
Also in the promotional products industry – which is innately analogue-oriented – one has struggled so far to push the digitalisation of the market. Putting forward the argument that in their sensuousness haptic promotional products are the antipodes to the bits and bytes of online marketing. That on the sales level contacts traditionally have a personal association. Or that the often very individual demands of a promotional products order cannot be efficiently depicted in a digital manner and the high degree of the consulting required makes online shop solutions difficult. This all led to the industry being very hesitant to tread the digitalisation path, hence the digitalisation degree of the market is comparably low.
For example of the product databases that were hyped several years ago as modern sourcing resources only a few have established themselves on the market and everyone is struggling with the fact that many of the connected suppliers don’t update their data files or make sure they remain compatible. Such online solutions have thus not succeeded in replacing printed catalogues or visiting trade fairs. The idea of launching virtual promotional products shows also proved a flop – the visitors want to hold the products in their hand, whether this changes purely because the technology allows better visualisations of the products and their customising options is questionable. Some online pioneers among the distributors have invested a lot of money into search engine marketing and built up impressive online presences, however mostly only with the aim of being found on the web: The products are still sold in personal discussions on the telephone. Up until today there are is no specific encompassing, international promotional products network: The corresponding communities on Xing or LinkedIn are only frequented by a few users – very irregularly. And one of the biggest problems: The industry still has no uniform data processing standard – and will probably never have one: That means the interfaces for data transmission often differ, which in turn leads to extra effort in maintaining the data. Up until now the industry has withstood the temptation of the Industry 4.0 – one almost gets the impression that several market players want to uphold the last bastion in the battle against the digitalisation of the industry.
Such conservatism has indeed a certain charm, but runs the risk of overlooking the opportunities that switching over to digital processes can bring with it. Especially the big market players have realised this in the recent past and are accepting the mega trend of the digitalisation – often by employing managers that don’t come from the industry, but instead from an IT-savvy environment.
The Industry is changing
They are being driven not least by developments outside of the promotional products branch: The so-called disruptors such as Vistaprint, Amazon or Alibaba are vehemently pushing their way into the B2B business and also onto the promotional products market with the know-how of their billion times over tested online tools. So far they are only taking away a few shares of the market from the established trade, but one doesn’t have to be a prophet to foresee that these shares will increase. Services, user interfaces and speed have become the major benchmarks for the average suppliers of haptic advertising. Because of course the business buyers from the promoting companies also demand just as convenient solutions as they are used to from their private purchases.
A further driver of the digitalisation efforts within the promotional products industry is the increasing speed on the market accompanied by the fact that the decision-processes are becoming ever shorter. This is forcing the market participants to rationalise their processes. Many suppliers thus want to increase the number of actual online purchases significantly. From the online entry through to the picking process in the warehouse everything is to be digitalised, also in a bid to reduce the sources of error: The less and the least often people are involved in the order processing chain, the more certain it is that the purchaser receives what he has ordered. All of this saves time, the most important resource in today’s business world. Time that is urgently needed to occupy oneself with all of the other tasks. Whereby the digitalisation process puts demands on the industry permanently – from the development of a functioning merchandising management system/ERP and the design of a responsive webshop to data maintenance, the evaluation of big data, print-on-demand solutions and samples made by the 3D printer, through to the marketing, communications via the social networks and the linking of haptic promotional products with online tools and VR/ AR worlds. It seems as if the industry has now also discovered the theme – the statements of the market players that were interviewed in this issue regarding their opinions on one of the most urgent themes of the present age appear to corroborate this.
Evidently the industry is in the process of changing, not necessarily in the sense of a revolution, more in the sense of an evolution. eppi magazine will accompany this process with a multi-article series on the digitalisation within the promotional products industry in the coming issues.
// Mischa Delbrouck
In the current discussion on the mega theme digitalisation, people are tending not to address the opportunities this brings with it. Sure, the debate about how the digitalisation which is already in full swing should be organised from an ethical and social point of view, which is just starting to really take off, is all well and good, because it is also important to minimise macrosocial risks and possible upheavals. However on a microeconomic level, I consider it also mostly brings opportunities for companies from the promotional products industry, which should be taken advantage of. The risks are in not putting the chances the digitalisation brings with it to good use. It is not purely about safeguarding one’s competitiveness. The digitalisation offers among others considerable opportunities of strengthening one’s profitability by comprehensively automating processes, new digital services and digital USPs. As a globally-operating full-service promotional products agency, we are specialised in implementing and efficiently designing complex, customer-specific processes. That is why a main focus of our digitalisation activities targets process automation and integration. Here modern interface technologies play a special role in order to automate and optimise the data flow and the workflows between our customers, us and external suppliers or service providers. Examples here are the customer order processing, approval processes, online reporting, electronic invoicing, SSO solutions, internal workflows and system integrations, the integration with external service providers i.e. couriers or our procurement processes. A further focus of our activities concerning the digitalisation is the field of eCommerce. In this connection, we also see considerable opportunities of creating a personalised shopping experience and a simple ordering process through the implementation of modern technologies and a high degree of intelligent system integration in order to promote the sales of our products and services and reinforce the customer loyalty. Themes such as print-on-demand or virtual sampling play a role here too.
Whereas in the past, end customers were waiting for the distributors to come up with product ideas, they are a lot more active today thanks to a flood of information and data, which helps them make their decisions quicker and of course increases the business between all actors in our industry. Between suppliers and distributors, products can be ordered, customised and delivered in an incredible fast way. Suppliers have to adapt themselves to customers who place more and more online orders, need a constantly available customer hotline as well as a delivery the next day. Thanks to the progress made in the digital imprint techniques, low product quantities can be customised in record time. An increasing number of suppliers and brands give their customers the possibility to upload their own designs and place an order for the finished product online. A process that goes from production until delivery takes place, and the customers can follow each step in a unique interface which has been personalised for them. The centre and the basis of all those processes is product data. Suppliers need to treat it as they would a treasure. Descriptions, pictures, imprint techniques and costs must be clearly understandable for the end buyers. Product data must be diffused fast and efficiently and the orders placed on the distributor’s website must be connected to the supplier’s ERP or CRM systems. This requires time, money and competences that distributors may not have. Sourcing platforms or webshop, catalogue and newsletter creation services are a great way for distributors find their way among the big product data. As for suppliers, they have the guarantee to have their data delivered in a professional way. Beyond speeding up marketing, sales and processes, digitalisation helps the promotional products industry stay in the race by encouraging marketing decision-makers to choose promotional products among all the other available media. That is the reason why all actors in our branch must take the boat. Online sales giants like Vistaprint or Amazon begin tackling the promotional products industry. This can be considered as a threat, but more positively as a way to help raise the quality and professionalism in our sector. Anyway, as attractive and positive the digitalisation of our branch is in many respects, human contacts still are at the centre of our business: trust and personal advice remain essential.
In principle, consulting services are standard within the promotional products industry and we are transferring this standard into the digital world by providing extensive information and consulting offers in our shop. Thanks to the digitalisation and the related advantages for simple and fast communications, it is possible for us to focus our solutions on the customers and their requirements, rather than on the technology. The digitalisation only has disadvantages if not put to efficient use. Making one-off adjustments within the company does not suffice however, here a continual further development is required. A current challenge that particularly affects digital companies is without doubt the tighter data protection provisions. But even if we do operate digitally, the telephone contact still remains an important tool for grooming contacts and strengthening customer loyalty; we also make customer calls for more complicated orders or entire campaigns. Companies that join the digital bandwagon too late or don’t get on at all, will be punished by their customers. Because the customers of the promotional products industry are becoming more and more digital themselves. The competition is just a click away. My tip: simply get started. Give it a try. One can’t always say what will bring success, but every experience moves one forward. As far as big data is concerned, it won’t be possible to put the huge flood of information to good use until it has been analysed. This is impossible to do manually, digital solutions will have to be found here too. A major benefit of big data for the promotional products industry: Companies can get to know their customers much better with the aid of large volumes of data. For example, big data can be used to address customers in a targeted manner and develop tailor-made solutions.
The digitalisation simplifies everyday life – data is sent out at the push of a button. This also changes the personnel philosophy within the company. Due to the fast exchange of data it is no longer necessary today for all employees to be located in one place; the reaction times are much shorter too. Diverse communication channels enable the fast, cheap exchange – even across the Continents. But I also see here the risk that the digital development will destroy the personal communications. In future above all digital consulting will become a challenge. Especially in the promotional products industry there will always be the need for consulting, however here we will experience a turnaround. The personal customer contacts will continue to decline and digital consulting processes will become necessary. However, for me customer contacts via the telephone or face-to-face are still very important. And that will remain so. Nevertheless, it will become increasingly more difficult to uphold “personal” customer contacts. This is also due to the fact that one always communicates with several customers at the same time. In order to reach traditionally-oriented customers in the digital era, we use among others our 17 stores in Europe as meeting points. Here we offer a layout service and consulting – essentially the counterpart to the digital change. A further consequence of the progressing digitalisation is that the prices in the online retail trade are becoming more and more transparent. We observed this development already in the B2C sector a few years ago and the development is now progressing in the B2B sector as well. These challenges are leading to us having to constantly optimise our processes. It is no longer possible to stop the digitalisation and we have to face the challenges it involves. Furthermore, it also brings advantages with it: I see positive changes and new opportunities for us. I am indeed of the opinion that the digital change will have a positive influence on the development of our industry and that the promotional products market will experience further constant growth.
The promotional products industry is at the very start of the road when it comes down to digitalisation. This applies both for sales via online channels as well as for digitalised processing procedures between the retail trade and the manufacturers. In my opinion the latter are a prerequisite in order to be able to master the challenges that the market faces us with: Declining order values and increasing pressure on the margins in combination with the demand for faster processing: i.e. shorter delivery times. As processing world champions, the big online printing shops, which have now also discovered the promotional product and are vehemently pushing their way onto the market, are currently demonstrating how this works. Up until now the established promotional products players can’t compete especially for small or medium-sized order volumes. By the time an order is ready for production using the conventional methods via email and telephone, the online printing shop has already delivered it two times over and earned good money while doing so! The many “online shops” that are being offered to the retail trade as a starting point on the digitalisation front won’t change this. These are indeed just digital shop-windows with a shop-like appearance that aim to generate enquiries. The actually sales and above all the resulting data processes – both the commercial and the printing data – still remain a task for the hand at the end of the arm, i.e. the distributor and the manufacturer. A real online shop that actually sells products, takes over the printing data from the industry customer, automates it and checks it in real-time, approves it and forwards it on to the supplier directly together with all relevant commercial contents: Anyone, who is interested in such a solution, should take a look at our initiative mypromo.com.
I am often asked how the digital age will affect Roantree. In some ways I think the changes are profound, in others I don’t believe that they will really affect us. What do I mean by this? We are a professional promotional merchandise distributor. Most of our business is repeat business that is conducted with mainly large and Blue Chip clients who buy from us because we adopt a consultative approach to selling. Generally we will suggest products to customers based on the objectives they are trying to achieve and the audience they are trying to reach. So although digitalisation means that a client can process an entire order from their smartphone with little or no interaction with the distributor; they can select a product, upload artwork and pay for the goods without any interaction with the distributor, I truly believe that these transactions only work for certain types of order or customer and will not replace the role of a consultative professional agency. Where digitalisation has had a major impact is in the speed in which a supplier can produce often intricate designs on a wide range of products using digital printing. We can now integrate a client webstore into our own back office to smooth out the order and fulfilment process. We can produce a model of a prototype using a 3D printer. The digital age is great and a huge part of the future in our industry. The growth of online businesses such as Vistaprint and Amazon may well actually increase the size of the market by expanding the usage of promotional products. However, I believe that distributors who talk to, listen to and work with their clients also still have a very rosy future!
With the introduction of our new Viewport-optimised webshop “mbw.sh”, we have taken a further step in the direction towards digitalisation. Our customers can view warehouse stocks in real-time, download current information on items and the line-up, calculate prices, order samples and place orders using a simple and fast process – what’s more the whole offer is available 24 hours a day, seven days a week. A good shop has to be functional and easy to navigate through. The users have to be able to find their way around intuitively and discover the appropriate products. The search function is the central operating element in a shop. Up to 80% of the users virtually exclusively implement the search function to look for products – that is why we have opted for the intelligent and errortolerant product search “exorbyte” and additionally rely on a clear arrangement of the categories and product groups. Our interface function is a big bonus. Some of the customers are already linked to our system per interface and can thus send us their orders directly from their own merchandise management system. This offers extra added value for both parties. It allows us to further process the orders directly and the goods are normally ready for dispatch the very same day. The path is definitely headed in the direction of digitalisation. The shops with their functions aim to facilitate the processes for our customers and us so that we have more time for the important consulting tasks.
The network of promotional products distributors is currently still strongly shaped by personal exchange and communications in the specialised print media. The well-known search engines have however already long since become the initial starting point for searching for products and will become even more significant in the future. In the digital world, brands have to be more quickly accessible than ever and above all have to be experienceable. Hence, in the promotional products area we have to address the theme of digitalisation more intensively, recognise the opportunities and tread new paths. The industry is already experiencing a huge increase in efficiency through automated process chains. The sales processes are becoming simpler, the delivery times shorter and the demands of the customers can be fulfilled faster than ever before. As a result we are shortening the planning time of the industry customers and increasing the spontaneity of purchases and thus also improving the sales figures. Furthermore, the newly acquired diversity of data offers us new decision criteria and a much more efficient needs-based target group address. A data-driven corporate alignment is essential for the future success of the industry and companies. Tradeconthor occupies itself very intensively with the evaluation of data in order to understand the needs of the customers better and in order to continually further optimise the online marketing activities and the entire corporate strategy so that they are tailor-made to suit the customers and in order to be able to scale them more efficiently. To this end we will expand our eCommerce team further and integrate targeted excellent skilled workers into our team, who dispose of visionary working methods. In order to be able to serve the industry customers in future as efficiently as possible, all of us within the industry should thus broach the theme of digitalisation and anchor it firmly into the corporate strategy. Companies that miss the boat here, will in future lose their relevance and thus ultimately also their customers.
The progressive digitalization of PF Concept is one of the key entrepreneurial challenges for us, where we have been very successful for some time. We understand digitization with a holistic approach across all internal and external operations and channels. On the one hand, we keep our company agile and fit for future market requirements. On the other hand, thanks to digital technologies, we are achieving accelerated growth through farreaching process optimisation. One advantage: time-to-market is significantly reduced. The digital transition is for PF the opportunity to place the customer at the center of all our processes. We have conducted extensive research and defined the key customer expectations in their interactions with us. We are now transforming our organisation to deliver upon these expectations at the highest level of quality. Speed is the underlying challenge for all departments. Overall, we not only remain more than competitive, we also offer our B2B customers a real B2C shopping experience. If PF has a clear commitment to the trade channel, we believe that most of the online retail features can be of benefit to our distributors. We want to deliver a B2B webshop with excellent procurement functionalities such as transparent pricing and clear lead times. Multi-channel content management and product visualization are of key importance in this matter to inspire distributors and end customers. For some time now we have noticed a clear shift in our customers‘ purchasing behaviour towards ordering online. This increases their requirements for transparent, fast, highly professional and convenient processes. We take these wishes very seriously and work on comprehensive solutions and offers in the interests of our customers. We do not see the digital transition as opposed to traditional customer relationship. We believe in combining the various off and online channels to provide the right information at the right time. Some tasks simply bring more value to the entire chain when automated or provided on a web shop. This also counts for the traditional distributors who can save time and concentrate on their own selling activities. Whatever channel you use for contacting PF, our service should be as personal as possible. Therefore we need data analytics from our various systems, but also keep investing in human interaction. That combination is what makes the difference.
photos: Shutterstock/everything possible (1), GaudiLab (1); Illustration: Jens C. Friedrich, © WA Media