by Brittany Willes, editor, Plastics Decorating
As the coronavirus pandemic continues to affect the world’s economy, many industries have had to adjust they way they do business. Manufacturing industries in particular have experienced major upheaval with some sectors all but shutting down while others experience massive growth as demand for specialized items, such as personal protective equipment (PPE), soars.
When it comes to plastics, many suppliers and manufacturers have shifted their operations away from their usual product lines in an effort to keep plants running. One thing is for sure: Everyone is having to get creative with how to best conduct business in an uncertain economy.
Shifting landscape
Many areas of the manufacturing industry were hit hard in the beginning of the pandemic as shelter-at-home and social distancing orders forced facilities to close temporarily. Luckily, many in the plastics industry were labeled as essential businesses and able to remain operational.
However, that doesn’t mean these facilities haven’t been feeling the sting of COVID-19. With the implementation of new safety procedures designed to protect workers, facilities are often facing reduced production and increased downtime.
One area that has taken a fairly severe hit has been the ad specialties and promotional products industry. Prior to COVID-19, the promotional products market was doing well. According to research by Advertising Specialty Institute (ASI), the market “posted a 67% year-over-year increase in total promo sales in 2019.” However, demand for promotional products has dropped dramatically in some areas as orders are reduced or canceled. As a result, “ASI projections have sales falling 34% this year.”
This sentiment was echoed by CDigital Director of Sales and Marketing Eric Steinwachs, who noted, “The heat transfer label business for the promotional market was up substantially for the first three months of the year. Then it was like a light switch turned off at the end of March.”
For many plastics decorators working in ad specialties, that light switch going off was not the immediate disaster it could have been. According to Steinwachs, “Other heat transfers business outside of the promotional market has increased: For example, heat transfer labels for hand sanitizer, soap dispensers and water bottles. We have also seen increased business in the medical market.”
CDigital is not the only company to see an uptick in business from the medical market. With the downturn in the traditional promotional products market, companies like Hit Promotional Products have switched up their production lines. “We started selling a lot of PPE products,” remarked CJ Schmidt, president. “We’ve sold tens of millions of masks, both the basic 3-ply and KN95 masks. We’ve sold isolation gowns, goggles – even a handful of face shields.”
This switch in products has allowed Hit Promotional to not only combat the loss in revenue but allowed it to keep more employees than it otherwise might have. “We’re lucky that we use a pretty extensive temp force; we didn’t have to let go of too many permanent employees,” explained Schmidt. “We only cut back about 5% of our actual, full-time employees over the last three months. We’re in a pretty good spot there.”
Preparing to reopen – with promotional products
While the promotional products market has fallen off, it may be making a comeback sooner than expected. As businesses reopen, many are taking steps to welcome back employees and customers with a variety of products intended to keep them safe. This is good news for plastics manufacturers and decorators.
“Hand sanitizers will likely become a staple product in our world now,” remarked Schmidt. “In the world of promotional products, hand sanitizer was already a common item that we were doing all sorts of different types of decoration on. That will likely continue and expand to other types of sanitation and personal use products like antibacterial pens, styluses, individual packages of antiseptic wipes, etc.”
According to ASI, promotional products such as personalized drinkware and pens are expected to resurge as a means to minimize sharing. Additionally, “No-touch tools are all the rage as people try to avoid contact with public touchscreens, grabbing door handles, pressing buttons and pulling levers.”
Often made of lightweight, conductive plastic, no-touch tools are likely to remain an attractive promotional item as consumers continue to be wary of making contact with common public surfaces.
ASI’s Executive Director of Research and Corporate Marketing Nathaniel Kucsma stated, “My hunch is that (no-touch tools) will have much longer staying power than the last new product that rocketed up the charts like this – the fidget spinner.”
Further opportunities for ad specialties/promotional markets – and plastics decorators – can be found in personal protective equipment such as imprinted face shields. “In addition to branded masks, neck gaiters and bandanas, imprinted face shields have been popular among restaurants, spas/salons and even merchants at outdoor markets,” as found by ASI research.
While many manufacturers had already pivoted their production toward PPE, especially face masks, shields have been less talked about. However, as more nonessential businesses, such as salons, reopen, shields may likely become a more practical option.
Looking ahead
Even as states are reopening and businesses are welcoming back employees and customers, almost everyone is asking themselves: Where do we go from here? How long until things start getting back to normal? For many markets, there is no clear answer.
“I think it will be slow to recover,” stated Peter Baldwin, director of marketing for Engineered Printing Solutions. “As much as people want to congregate at sporting events and other public places, it is abundantly clear that the pandemic is far from over and people will continue to be leery of public events.”
“I have asked several of our customers that same questions,” said Steinwachs. “I have heard answers from as soon as August to as late as the first quarter of 2021. I don’t believe we will see a return to normal order activity until we see the events and tradeshows coming back to normal. The industry we supply promotional heat transfer labels to requires person-to-person contact, such as meetings and events.”
For OWOSSO National Account Director Doug Pendergast: “The majority of OWOSSO’s customers are expecting sales to ramp back up starting in September. They are predicting more employees will be back in the office setting with more travel requiring the traditional supplies. The travel industry is the largest customer base for our promotional products decorators. Things like travel and in-person meetings will begin, and that is where the promotional products industry will see their sales return.”
There is no denying these are strange times that may get stranger yet. As businesses do their best to take things day by day and adapt as best they can, things will slowly continue to move forward.
References
- ASI “Popular Promo Products for Reopening.” www.asicentral.com
- ASI “Big Markets In Promo: Retail.” www.asicentral.com
