The state of emergency caused by the Corona virus has left its traces behind in the promotional products world. The suppliers and distributors are battling with the economic impact of the crisis and at the same time managing new everyday routines that are characterised by home offices, short-time work and endless organisational obstacles. At least the industry is once again demonstrating that it is resistant: Many companies have reacted in record time and at short notice offered personal protective equipment and other products that are in demand due to the crisis. Entrepreneurs and employees are showing the right attitude and solidarity, numerous campaigns are lending encouragement and demonstrating the potential of haptic advertising and the creativity of its suppliers.
After eight or more weeks of lockdown – depending where one happens to be in Europe – the serious effects of the Corona crisis have become blatantly obvious. Whilst many people are still battling against being shut indoors, boredom and isolation in their private lives or have had to alternate between working in the home office and child care, the effects of the standstill are hitting the economy with full force – in spite of the easing of the restrictions that is meanwhile occurring in certain parts of Europe. According to the European Commission, the economy of the European Union is expected to shrink by 7.4 percent in 2020, for some countries, including Italy, Spain and Greece, losses of over 9% are being forecast. Paolo Gentilic, the EU Commissioner for the Economy, called the Corona Crisis “a shock without precedent since the Great Depression”. Losses that, as usual, hit the advertising market immediately: As early as in March, 81% of large multinational businesses deferred their planned advertising campaigns due to the pandemic, said the World Federation of Advertisers (WFA). According to Nielsen, the German advertising market already recorded a 5.9% decrease in March compared to the previous year. And according to The Advertising Association and WARC’s latest quarterly Expenditure Report, the UK advertising industry is expected to fall by 16.7% in 2020.
Developments that also reached the haptic advertising sector at the same time. “We expect for this year the promotional market being at two thirds of the 2019 volumes,” presumes Alexandre Gil, Stricker. The lockdown, the cancellation of events, financial bottlenecks and uncertainty among the promoting companies have also resulted in the budgets of the promotional products agencies being shifted or axed and in due turn to massive losses in turnover. “We received hardly any incoming orders from the very first day of the lockdown onwards, at the same time we have to renegotiate new delivery times with our customers for the ongoing orders, postpone services and discuss possible cancellations,” reported Markus Angermayr of Forum, for instance. This is making itself noticeable among the suppliers: “The demand has declined strongly,” reported Piotr Łunkiewicz, Symbio Media Group. “The entire industry is affected by a decline in the number of orders, which as a rule are 50% below the norm,” reported Daniel Jeschonowski, Senator, whose company registered short-time work in April.
The company is not alone here: According to a current survey by the industry association, GWW, short-time work prevails at 50% of the German promotional products players due to the crisis. The survey, the results of which were published by the association at the end of April, also otherwise paints a worrying picture of the current situation (see more on pg. 10): The average loss in turnover in March was 30% among the suppliers, 45% among the distributors. Since the crisis didn’t really start having an impact in Germany until mid-March, the result in April will almost certainly be significantly worse. For more than 60% of the companies interviewed, the cash reserves won’t last until longer than the end of the second quarter. A current survey of the Polish industry association, the PIAP, also underlines the bleak situation, this time on the Polish market (s. also pg. 9): There two thirds of the respondents are expecting to experience a 50% decline for 2020. 70% of the companies interviewed that have more than two employees are planning redundancies; each fifth company is thinking about dismissing half of its workforce. Each third company is considering temporarily shutting down, every tenth firm is indeed contemplating closing the business down completely.
The worst thing of all is perhaps: Nobody can even begin to estimate where the crisis is headed. Will the cautious relaxing of regulations that are being tested in some European countries at the moment save the economy from falling into an even deeper recession or will they lead to a further exponential infection curve? Will normality return in the last third of the year at last or will the next wave of infection ensue? Will the state cash injections help the companies emerge from the trough or will hitherto healthy companies become indebted and after a delay be driven into insolvency? Question after question with so many unknown variables that many companies don’t know which adjustment screws to tighten – or whether there are any adjustment screws left to tighten at all.
Everyday life, that is no more
As if that weren’t enough, the state of emergency also brings a host of challenges for the everyday routine with it. The fact that an almost eerie stillness prevailed for weeks in the otherwise so vibrant industry, was not only due to the economic situation, but also because the entire management of many companies was initially totally occupied with reorganising the internal processes. Teams had to be divided up, work accounts and home office workplaces set up, the logistics, production, customer service and sales processes adapted. Running a warehouse with 50% of the workforce without it coming to significant delivery delays, is just as much new territory for many companies as carrying out virtual meetings between international sales teams or the organisation of the internal processes via the home office – especially since particularly the small players don’t dispose of the necessary IT.
Companies that are already well-aligned digitally speaking are finding it much easier to deal with the situation: “Since we have gained a lot of experience in distance work, among others in the scope of the RemaDays Kiev, this didn’t prove too difficult,” reported Sławomir Giefing, GJC Intermedia. Companies with a more traditional alignment however where the currently necessary working methods have never been tested, are inevitably suffering major teething problems. Especially since the external communications with the industry customers are in many cases disrupted, because they frequently have the same problems regarding the organisation of a new everyday work routine. Many contact partners and decision-makers are extremely difficult to reach and are first of all placing promotional products at the bottom of the agenda not only for economic reasons, but also for totally banal organisational reasons.
Alternative products
In spite of the adverse working conditions and even if everything is very uncertain – nobody can afford to stand around drinking tea. Fast action is called for now in order to at least curb the downward trend: That means above all finding products that are still sellable because they are now needed in the course of the crisis. Gin manufacturers are producing disinfectant agents all of a sudden, injection moulding machines are no longer making lunch boxes, but instead protective glasses or mask holders. 3D printers are modelling protective shields for hospitals, printing specialists are producing info boards – and dozens of companies are giving it a try with the product of the times: the face mask. Whereas it is comparably obvious and uncomplicated for textile companies or producers of serviettes to set up a corresponding production, in the meantime even plastic specialists have introduced surprising product solutions. It is no wonder that Stephen Baumgärtner, cyber-Wear, already anticipated that face masks will become “a corporate fashion trend”. In its unbranded form the protective item for the face didn’t belong to the promotional products industry’s classic repertoire of products of course. This has changed now: Whether an import specialist or distributor, whether a full-range stockist, writing instrument specialist or bag designers – they are all suddenly offering masks from the Far East in large volumes at in some cases adventurous prices.
However, since the business with the face masks won’t be ongoing forever, many industry players are not following suit because they don’t want to be left sitting on unsellable items including the corresponding investments. “We haven’t attributed much attention to the ‘new’ product masks over the past weeks, because from the start of the crisis it became evident that a huge number of importers are focusing on this theme,” stated Angermayr. Whatever a company’s attitude regarding the mask frenzy – as far as the procurement is concerned, the industry is currently proving its capabilities, since according to Gil “the economic agents are totally incapable of acquiring these materials and getting them to Europe – whether large groups or even entire states.” While the latter are fighting to provide the health systems with the absolute necessities – one only needs to think about the six million face masks ordered by the German Government that ominously disappeared from a Kenyan airport at the end of March – the players at the interfaces of the Far East supply chains are excelling. First and foremost, the eCommerce giant, Alibaba: At the end of April the Alibaba Foundation and the Jack Ma Foundation donated no less than 100 mil. face masks, one million N95 masks and one million test kits to the WHO.
Wave of solidarity
An extreme example that is setting the precedent within the industry, albeit on a smaller scale. Because in the case of all Corona-related product trends it is not just about cushioning losses in turnover or making a fast buck – on the contrary a wave of solidarity is also perceivable. From masks or sweets dispensers at hospitals, to donations to the local food bank or gift packages as a thank you for the heroes of the health sector, through to merchandise collections in aid of non-profit making institutes: Promotional products companies are showing the right attitude and are asserting themselves where it is most needed in the course of the pandemic as the examples that are highlighted in this theme rubric demonstrate.
Many of these initiatives are evoking an overwhelming feedback which can be followed on the web and across the social media – from the industry itself, but predominantly also from the addressees and from many industry customers, who are keeping an eye on the activities of their promotional products partners. “The feedback from the recipients was great – there have been some goose pimple moments here,” reported Jan Breuer, mbw, whose company sent gift packages to supermarkets, police stations, doctors’ surgeries or hospitals throughout Germany. The 20,000 free information stickers that Symbio Media distributed to hospitals and post offices “went down very well internationally – that makes us proud and gives us a glimmer of hope during these difficult days,” Łunkiewicz reported.
Crossing borders
One can do something – and indeed in the case of such campaigns they provide support in different ways: They help the community, they strengthen the solidarity both within the companies and also between the distributors and suppliers. They have an encouraging effect and counteract the standstill. Last, but not least they help the promotional products industry stay visible and expose the advantages of “their” advertising medium. Baumgärtner: “The industry isn’t sleeping and is coming up with ideas, there are also ways of impressing with haptic advertising during these difficult times.” Especially since many marketeers appreciate such stimulus because they “feel slightly lost at the moment, are experiencing a ‘reality loss’ and feel isolated due to the shutdown and home office situation,” in Baumgärtner’s opinion. “We can only serve our customers as a partner, if we carry on doing our job.” Promotional products players are thus advised to move forwards, remain present and exploit their strengths as consultants. Marcel Spiess, Cadolino, reported: “We have continually maintained the contact to our customers. Where possible, we have supported them and naturally sent out targeted mailings, which focused on themes like health, hygiene and employee protection.” Because even if further parts of business life are lying dormant: There are still fields of application for haptic advertising – whether office kits for working in the home office, fitness gadgets for the home sector and small tokens of appreciation like sweets to say thank you to one’s employees. “Projects that were stopped abruptly as a result of the crisis are starting to pick up again, partly with changed perspectives and other ideas,” reported Angermayr.
Also, regarding the external communications, none of the companies can afford to bury their heads in the sand – once the contacts start drying up, the remaining leads have to be carefully processed. The promotional product can step into the breach when other touchpoints are created, i.e. through mailings for instance. In times of social distancing, haptic advertising often works much better than other advertising media, crosses borders. It even reaches its target groups while they are in isolation and establishes physical contacts, where this is otherwise not possible – an invaluable advantage during the current situation.
This alone will not help combat the hard reality – for many promotional products players one’s own survival is simply dependent on how long the COVID-19 pandemic lasts. The Corona crisis is in many aspects unique and presents unprecedented challenges. That companies should make sure they remain present in times of crisis, is an experience gained from previous crises that can also be applied to the current one. And the industry will continue to implement its creativity and talent for improvising throughout the Corona crisis – these are namely immune against viruses of all kinds.
// Till Barth
We devised two guiding principles on the first day of the shutdown – firstly: to try to live and carry on as normally as before wherever possible. Secondly: to remain visible for our customers. We have split our teams internally and installed workplaces in home offices. The fact that we have already been digitally organised in many areas for years, has proved to be a huge advantage. Around 80% of our employees are now working continuously from home, everyone is instructed to reduce their overtime. At the each of the company’s locations in Mannheim, Heidelberg and Wipperfürth, we have a small emergency crew on-site that takes care of the most essential tasks such as incoming goods, quality control, etc.
We can only serve our customers as partners if we carry on doing our job. Many customers are a little lost themselves at the moment, are experiencing a “reality loss” and are feeling isolated due to the shutdown and home office situation. On top of that they are also grappling with economic problems and short-time work. With the aid of two campaigns that we ran intensively via our social media channels we aimed to demonstrate that the industry is not sleeping, but indeed is coming up with ideas. There are ways of scoring top marks with haptic advertising even during these difficult times. Last, but not least we also want to signalise to our supplier partners that we are not letting them down and are indeed soldiering on. We packed gift boxes for the campaign #heroesforeurope – an idea conceived by our UK Managing Director – and sent them out to “heroes in the crisis”, i.e. such as hospital and supermarket staff. Don’t be a d**ck is a merchandising campaign that conveyed the appeal to stay at home using different products. In both cases we received a lot of positive feedback from our customers and in the meantime also initial enquiries from companies, who would like to dispatch “heroes” boxes on their own behalf.
I get the feeling that the first state of shock has passed and we can now start presenting ideas to the customers again. The latter on the other hand are glad to have something to talk about other than the crisis. Of course, nobody is thinking about summer campaigns anymore, but the Christmas business has not been ruled out yet. The crisis itself is also bringing new ideas with it – fabric masks for example could definitely turn into a corporate clothing trend and make super welcome gifts for employees, who are returning to the workplaces. There is going to be life after Corona and once the shutdown is over, the economy is going to have to take the offensive.
Senator introduced extensive measures at the beginning of March to prevent infections and avoid a possible interruption of the business. For example, we tested work in the home office for two weeks – incl. accessing SAP from home, etc. – and divided up our entire production into groups and shifts. In addition to this, disinfection, face mask and safety distance rules have become part of everyday business life. As such, up until today we have not had one single infected person at our plant – which has incidentally been running non-stop, which we are proud of. Economically speaking, the entire industry is affected by a decline in the number of orders, which as a rule are 50% below the norm. No company can simply take that in its stride. At Senator pro rata short-time work was introduced at the beginning of April, so that the cost base doesn’t completely explode. During the most difficult period we profited heavily from existing orders, which we are also still processing. One aspect that is problematic for us at the moment is that our finished goods are not being accepted in many countries outside of Germany, because companies have shut down – which of course also means the money is not coming in.
There are no countries that are not affected by the COVID-19 pandemic; however, each country is dealing with the situation totally differently. Although it has become clear in the meantime that a hard “lockdown” isn’t one of the best measures to serve the purpose of preventing infections, it is still being practised to a greater or lesser extent. This was particularly evident in Great Britain and France. On the other hand, precisely those countries, which are implementing rather draconian measures, are now experiencing a recovery. One result of the crisis will be that the label “made in Germany” continues to gain significance. We are convinced of this. And the communication of the market participants, who exclusively customise goods, but who nevertheless still refer to themselves as “made in Germany manufacturers” is also proving this. The industry customers and the distributors are continually demanding more and more details – and we can provide this information in a much more transparent and comprehensible manner if we carry out the entire value chain in-house. Our Antibac pen – a ballpoint pen with an anti-microbial effect – that is completely manufactured in-house is a good example of this. We invite distributors and users to experience its production – keeping the required distances and wearing face masks of course. Many people are asking themselves whether the price pressure will increase. Our industry has always been characterised by tough competition. However, we are convinced that the consultant, who takes his role seriously, should see this as being an opportunity, rather than as a risk. Because ultimately the competitive edge will lie in consulting and customer service and thus also in the trend theme sustainability. Those distributors, who exclusively rely on the price and one-digit margins, will lose out in the crisis. The situation will quickly become very tight for them here.
We are not expecting a large second wave of Corona infections, because extensive measures have been implemented in all countries. The situation on the market will no doubt become problematic as soon as the support from the state runs out though. Here at Senator, we see a big opportunity in the crisis, because we are tackling and solving diverse themes at present that have been on our agenda for some time already. Hence, we will definitely emerge from the crisis stronger than before. This applies equally for our production as well as for our sales and all underlying processes.
Like our industry colleagues, our company was hit hard by the pandemic. We received hardly any incoming orders from the very first day of the lockdown onwards, at the same time we had to renegotiate new delivery times with our customers for the ongoing orders, postpone services and discuss possible cancellations. The situation was of course sobering, whereby we had great understanding for the buying behaviour of our customers and for the fact that we obviously couldn’t take on a front-line role with promotional products. After the Austrian Government announced the lockdown we registered our entire workforce for short-time work and drew up an operational plan for the protection of the employees, which laid down when each person was physically present on-site at the company in order to ensure the safety distances were guaranteed. At the same time, we had to uphold the logistics and the related picking and packing tasks for the fulfilment customers, whereby the activities were also strongly reduced for these customers too. In the sales and administration departments we have the opportunity to work from home offices, whereby we are noticing that many employees can’t wait to return to the office.
After several tough days at the start of the pandemic and the related organisational measures, we are now endeavouring to live normality within the company. Projects that were stopped abruptly as a result of the crisis are starting to pick up again, partly with changed perspectives and other ideas. We are trying not to let ourselves be influenced by too many negative external factors and are developing ideas, primarily at management level, which we would like to realise in the future together with our customers. The reachability and the perceptivity of our customers varies widely of course, depending on which industry they belong to and the respective corresponding difficulties. We haven’t attributed much attention to the “new” product masks over the past weeks, because from the start of the crisis it became evident that a huge number of importers are focusing on this theme. So, we chose to specialise in sustainable bandanas, which currently also serve as a protection for the nose and mouth, but which will also continue to be implemented above all in the sports sector even after the obligation to wear masks no longer exists.
If at all possible, it is very difficult to assess the economic future of the industry currently. Unfortunately, we have often ascertained in the past that economic downturns have a strong impact on the promotional products trade. The figures and forecasts of the economists for the coming months are everything but positive, so it is going to be a long road back to “normality” for our industry. Plans that we drew up at the beginning of the year, belong to the past in the meantime. This crisis should however also offer the opportunity for us, together with our partners and suppliers, to fill the industry with creativity again so that we can impress our customers with haptic advertising in the future too.
The lockdown came into force in Switzerland on March 16. We survived that month pretty much unscathed, but then in April we only earned less than 30% of the turnover compared to the same period of the previous year. The forecast for May is even bleaker. We sent our employees off to work in home offices at a very early date. This ran very smoothly, since we had already invested in the development of our technical infrastructure prior to the crisis. Nevertheless, we still have to guarantee the daily work schedule on-site at the company, of course. We have formed teams for this purpose, who are at the premises alternately. We hold virtual meetings via Zoom for the regular exchange with the entire workforce. With this alignment, we have in the meantime got the work processes well under control – and in spite of the dreadful situation, the pandemic has taught us a great deal. We have continually maintained the contact to our customers. Where possible, we have supported them and naturally sent out targeted mailings, which focused on themes like health, hygiene and employee protection.
We already imported respiratory and hygiene masks into Switzerland at the beginning of March. And since we place great value on correct and extensive certifications, this brought us a high level of acceptance and credibility on the market. This in turn enabled us to win over new customer groups such as hospitals, old people’s homes and health organisations. This was all only possible, however, because we have already upheld close contacts to China for almost 30 years. Whereby, we have learned a great deal over the past weeks and also established new partnerships so that we can confidently look ahead to the future – even if this future is very uncertain in many respects.
One can only hope that the economy will recover again fast. Unfortunately, companies always cut their advertising budgets first when it comes down to saving money and this area is mostly also one of the last to be reactivated. In spite of this or perhaps precisely because of this, it is extremely important to remain in contact with our customers. Companies that are not active are quickly forgotten. This is why trade shows are absolutely essential and will hopefully be able to take place again soon. Our products are and remain to be haptic, one has to be able to see, feel, smell, hear and taste them. Personal meetings, visits and customer contacts are equally significant. The current timetable out of the lockdown gives up reason to have confidence in the future. Yet, the major question will be: When and to what extent will companies invest in haptic advertising again? It is extremely difficult to forecast this, because there are so many uncertainties. Will we have to overcome a second wave of infection? When will a vaccination be available? How is the border traffic going to be regulated? How are the freight costs going to develop? Which production sites will still exist after the pandemic? We simply don’t know the answers to these questions. And this uncertainty will accompany us for weeks and months to come. Long-term planning is thus almost impossible. We have to remain flexible and innovative, work even more closely together with our customers and engage in a mutual exchange. This will definitely further intensify the solidarity between us and the customers. We will stay on the ball.
At the moment things in Portugal are under control. The first signals of the deconfinement process are encouraging – the transmission rate maintained below 1. We were slightly slow in reacting when the virus hit the country, probably we should have imposed restrictions one or two weeks earlier. Still, afterwards, I can say that the conduct of the country as a whole has been exemplary. We have just emerged from some tough years of austerity, so the economic tissue is lean and the mindset of the people is ready for a good fight. The team is our most valuable asset, so we have assured that they were healthy and safe. Secondly, transparency and access to information are crucial, so we ensure that we maintain excellent communication lines at our C and D levels and, subsequently, to the rest of the organisation through virtual meetings – including big ones with more than 130 people from the sales department. We have split the production and logistic teams into hermetic units to prevent potential virus spread. All the office teams were sent to work at home offices and we created virtual open spaces, which replicate to an extent the feeling of the teams being physically together. Given the decrease of activity volume, this adjustment of our workflow, despite not being optimal, did not result in any loss of quality in our client service level or in our global KPIs.
We have a 3D printing farm comprising of several dozen machines, the capacity of which was free since we hadn’t commercially launched the offer yet. So, we decided to place this capacity at the disposal of our community, producing face shields to be used by hospitals completely free-of-charge. This gesture registered excellent feedback and afterwards several companies copied the initiative. The feeling of triggering off a positive viral effect is quite nice – we have not charged a single face shield for so far. We had lots of discussions internally about whether or not to start importing and offering protective materials. Initially, we didn’t want to become involved because these items don’t have a natural connection with the promo world. On the other hand, what we have observed for over two months is the fact that the economic agents are totally incapable of acquiring these materials and getting them to Europe. It doesn’t matter if you are a mega company or even a State, the truth is that the scarcity of masks, gloves and sanitizers is aberrant and the lack of the protective equipment has been a critical factor for the curves of this pandemic having displayed such a pronounced initial growth. Not forgetting the healthcare professionals from different countries, who are exposed to such high rates of contamination, without proper equipment. That’s why we’ve decided to use our expertise: by the end of April, we will be able to serve our clients with individual protections masks (social, surgical and KN 95) with the full standard of compliance and at fair prices.
Regarding the economic impact of the crisis, our main advantage is the fact that we operate in a large spectrum of countries – 94, the last time I counted – which helped us to avoid an immediate massive decrease in our sales since we were facing different stages of the pandemic effect. And even if we are expecting negative deviations to the budget, we will maintain our long-term strategy of growth. As for the promotional products industry in general, we are expecting several trends to emerge as a result of the crisis: the demand for premium and eco-friendly products – which are more expensive – will decrease in favour of useful and low-cost products. Furthermore, individual protection products will become a relevant segment of our market’s offer. Significantly less distributors will order directly from Asia due to reduced financial capacity and delays in high season. Last but not least, the consolidation of the market will continue, but as a result of more fusions rather than acquisitions, since there will be an obvious shortage of liquidity.
We expect the promotional market to only achieve two thirds of the 2019 volumes this year, with very different impacts across companies and countries. The speed of recovery in 2021 is at this stage hard to predict – are we going to experience a U curve or a V curve? Will there be a second pandemic wave in the winter? – and will it be dictated by how fast a vaccine will reach the mass production stage. Nevertheless, we are optimists by nature and we do not predict apocalyptical scenarios of “nothing will be the same again”. Humanity has the wonderful capacity to learn and evolve in a fast way from negative episodes and history is a long sequence of that behaviour.
During these difficult times it is important to take a dynamic and solution-oriented approach. The SymbioMedia Group produces electrostatic films for the advertising industry and is currently suppling among others large pharmaceutical firms, health institutions, hospitals, chemists and doctors’ practices with electrostatic posters, which are used for explanatory purposes or to advertise medicines. We are also still receiving orders for other products such as our notepads. But the demand has decreased sharply since the end of March. We are however doing our utmost to maintain the production and sales during the crisis. To this end, we have where possible relocated processes to home offices, are continuing with the production under strict safety measures and keep on adjusting our activities in line with the changing circumstances. So far, we have been able to deliver all orders punctually.
Overall, the economic climate within the industry has noticeably slumped, whereby the situation varies from country to country. We can only hope that the respective governments develop efficient programmes to support the affected companies. Most of our customers and sales partners have already modified their processes and are proving very flexible – we are all endeavouring to find strategies to deal with the changes on the market. We are nevertheless optimistic that the situation will improve in the near future – up until now it seems like normality could prevail again in the last third of the year. In order to make a contribution in fighting COVID-19, together with the printing shop, Kunke Poligrafia, we launched a non-profit making campaign and sent around 20,000 selfadhesive stickers of the brand memoX, which point out the necessary cautionary measures, to hospitals, post offices and shops throughout Europe. The campaign went down very well, also on an international level – this makes us proud and also gives us hope during these difficult days.
uma was “COVID-19-ready” at a very early stage of the crisis and was thus able to uphold the production and customer support at all times. Since we implemented the same measures in our plants abroad, we had no problems delivering and were able to process all orders on time prior to and during the lockdown phase. The crisis is also having an impact on our economic situation: The March was very good still, but in the meantime the incoming orders have slumped almost down to zero. At times, the number of orders declined by up to 80%, the turnover by 40% to 60%. I am currently not expecting much change in these figures for the next two months. We had to react and registered short-time work – there are no other aid packages for companies of our size in Baden-Wuerttemberg. We have always ensured that our company is economically sound, that we are financially independent and that – even if we have been hit hard – we will certainly survive the crisis. We are receiving immense support and understanding from our employees, who all pull in the same direction with us – “in both good times and bad.” This is why we are voluntarily topping up the short-time work payment by 20% ourselves. We are presently experiencing the same situation on all of the international markets: The enquiries and orders stopped coming in overnight. The promotional products business is also struggling seriously in countries like Sweden that opted for a more relaxed way of dealing with combatting the COVID-19 pandemic. The virus knows no borders.
More and more demands for deferred payment are being received from the industry and an increased number of payment defaults has also been recorded. This theme will no doubt be ongoing throughout the second half of the year, because the economic consequences will occupy our industry much longer than that – presumably even long after the virus itself is gone. I am not perceiving a stronger sense of solidarity; everyone has to try and keep his company successfully on track. But we maintain very close and good contact to our trade partners. Especially in difficult times, which would incidentally have also been the case without COVID-19 and beyond, upholding personal close contact to the trade partners always pays off. We will continue to adhere to the solidarity we live and appeal to the trade to collaborate closely with their partners, who one can rely on long-term and indeed also during times of crisis. Bans on trade fairs and personal contact are dramatic for the sale of haptic advertising media such as ballpoint pens, especially since whole industries are affected, which will emerge from the crisis extremely weakened and will initially cut their advertising budgets. Beyond this, the fact that the trade fair events of our industry have been cancelled is extremely frustrating. Of course, we can talk about the models per video conference, we can send the samples to the distributors, there are of course several means of contactless communication. And we certainly don’t also need the trade show variety that we have enjoyed over the years, but we do need industry events distributed throughout the year, not only for engaging in an exchange about products, but where one can also groom one’s relationships to partners.
It is not possible to predict the long-term consequences of the Corona crisis yet. I hope a general discussion will be held on the theme “staying healthy”: What are we undertaking for ourselves and the environment to secure the asset “health”? Whereby it is not about who finds the best vaccine the fastest, but above all about how we have to change our behaviour and avoid everything that harms us personally without having to forego consumption and luxury. The sustainability debate underlines how many companies are acting in an inexplicable manner. The same institutes and companies that up until recently only implemented ballpoint pens if the barrel was made of recycled plastic and the packaging from FSC-certified cardboard, which were also delivered and produced following a climate-neutral process, are now during the crisis ordering disposable pens that are packed in cellophane bags and are no longer interested in the production process or the origin of the product. Shocking.
Even though the promotional products market expediently offers adequate solutions for implementing products that are sustainable and which take all health precautions into account. What is needed to do so? As before professional consulting from the suppliers and also managing directors who want to change the world positively and who are acting out of conviction, rather than for PR reasons. Finally, none of this is about the price and whether we can afford it. The question we should be asking ourselves is indeed whether we are willing to pay the price to remain healthy. In my opinion, there can only be one answer here. Every individual has to behave and act accordingly, if we want to be successful long-term.
The COVID-19 pandemic is facing us with unprecedented challenges. However, I am not falling into a depression because of the radical changes that we could encounter – as an entrepreneur I am used to having to continually change my course. Of course, we had to reorganise our work processes: All of our employees are working from home offices. However, since we have gained a lot of experience in distance work, among others in the scope of the RemaDays Kiev, this didn’t prove too difficult. Nevertheless, it was necessary to introduce rules so that time didn’t slip through our fingers – quality assurance plays a major role in the home office. It will also be interesting when everyone returns to the offices after such a long period of distance work. Unfortunately, the general situation in the promotional products industry is different to our internal one and involves more far-reaching changes: A relatively high number of companies, approx. 20% to 30%, are producing or selling masks or similar protective items to curb the spread of the pandemic. Around 50% of the companies have already reduced their workforces or are planning corresponding measures. Some are increasing their export efforts in order to compensate for losses in turnover on the domestic market. Naturally, the negative effects of the pandemic are increasing with every month that the situation continues.
According to a survey that was recently carried out by the Polish industry association, the PIAP, more than 90% of the companies on the promotional products market had recorded a decline in turnover in March. In order to cushion the financial losses, in addition to expanding their line-ups to include protective items, many companies are coming up with further creative solutions too. For example, an exhibition construction company we know is now producing kitchen furniture. The answer is to find new customers in new divisions. We are currently occupying ourselves with three themes: Firstly we have financially supported hospitals and local institutions in the scope of a nationwide campaign, secondly we are lobbying to obtain access to legal information that is helpful in the current situation and thirdly we have developed an online tool that allows promotional products distributors and suppliers across the whole of Europe to be found and contacted fast, which is proving extremely useful in these difficult times. After all, it is difficult to foresee when establishing contacts at trade fairs and other events will be possible again. It goes without saying that we all want to return to normality as quickly as possible, but from a realistic point of view large events especially on an international level are hardly conceivable in the more recent future, especially regarding the varying intensity of the pandemic in the different countries. We are placing our hopes on the autumn, but one should develop a plan B for possible longer-term limitations as a result of the virus.
Masks will play a decisive role in the conduction of trade shows. They are going to become fixed items in the fashion and advertising industry – in diverse shapes, individually designed with an imprint, etc. The exhibition stands will have to be equipped with several additional safety elements. We won’t return to normality until the risk of infection is completely over. We are expecting an increase in online sales, especially within the retail trade. Within the industry many companies already sell via the Internet big-scale and are preparing to sell to users as well. Online communications, i.e. via video calls will continue to be commonplace.
We are currently primarily talking to our customers about their situation – which are the most necessary sales-promoting measures for them and how they see their presence at the next edition of the RemaDays Warsaw in the coming year. The conclusions from these dialogues are very promising – of course in the hope that the trade fair can be executed technically speaking. Under the conviction that all is good that ends well, I wish everyone plenty of new ideas and the willpower to put them into practice and that they emerge from this situation strengthened in terms of contents and professionally.
