PPB May 2016

4 •

PPB

• MAY 2016

PERSPECTIVES

Has the current distribution model of

supplier to distributor to end user completely

collapsed? I talk to industry professionals all

the time who wonder if and when this will

happen. Will suppliers decide to take the risk

and openly sell direct to end users with hopes

to maintain most of their distributor busi-

ness? Could a large conglomerate that owns

both a supplier and distributor just use their

own entities and create an exclusive relation-

ship within their companies? There are many

scenarios, and some might be happening

right now without the majority of the indus-

try even cognizant.

The key to understanding the change in

buying models is to understand the buyer and

the channels within the industry. Millennials,

who are projected to make up 50 percent of

the workforce by 2020, buy differently than

previous generations. They are purchasing

personal items online, and companies like

Amazon deliver product in a few days or even

in a few hours to satisfy that approach. Does

Amazon Prime Now ring a bell? A year ago

some might have said it was impossible to

deliver a product in a few hours. Now, in

some markets, you can order a humidifier, for

example, at 8 pm, with delivery the same day

before 10 pm.

In today’s fast-paced commercial environ-

ment, those in the industry should consider a

few questions to validate (or check) the con-

tinued effectiveness of the current model. Is

buying a promotional product as easy as a few

clicks? Does the same go for the right pro-

motional product or strategy? Is being an

expert promotional products consultant and

creating trust enough to keep customers?

From the distributor side of the ball,

value-added service is critical to maintaining

a strong position in the game and success in

the longer horizon. It’s critical to ask yourself

and your company whether you are truly

adding value. Those who have value proposi-

tions that put the service of customers at the

core are better positioned to withstand the

direct model and continue to thrive in today’s

(and tomorrow’s) market.

I submit that I don’t have the answer to

solve all of our industry challenges, and I

have much on the line as owner of a top 100

distributor. I keep my mind open and my eye

on the ball. I also push my company to add

value and build trust within our client base.

While building trust is not only a major fac-

tor that helps us grow business, it is crucial to

stay in business.

This month, your PPAI Board of

Directors, PPAI staff directors and executive

team along with a professional strategic plan-

ning consultant who focuses on transforma-

tional change, will meet in Washington,

D.C., to work on a new strategic plan for

PPAI. The industry has many new threats

that weren’t prevalent five or 10 years ago.

Government regulations, product safety,

social responsibility, technological advances,

changes in buyer procurement methods and

globalization of purchasing and distribution

all play a significant role and influence

change in our industry. These and other

change-drivers will be considered, and the

goal of this significant event is to develop a

framework for a new strategic plan. This plan

will outline the major change-drivers affect-

ing our industry and the role of PPAI in that

transformation. This plan and critical think-

ing should help us understand where the

industry may be in three years as well as the

make-up and functions of our Association.

PPAI is working on your behalf to legis-

late, advocate and educate key stakeholders.

This is a critical time for our industry, and

your Association has a focused and driven

staff and board to take on this challenge.

O ONE CAN DENY THAT

the promotional products industry

is undergoing change. Some people wish to turn a blind

eye or build walls to protect what once was. Secret codes

are not so secret anymore. No new letter coding system

will hide the results of a Google search. Suppliers are no

longer hidden behind a PPAI number. We are in a global

economy where distributors buy direct from China, suppli-

ers sell direct to end users and overseas manufacturers even

sell direct to end users. Our industry is not just undergoing

change, it is undergoing transformational change.

TRANSFORMATIONAL

CHANGE:

IS OUR INDUSTRY

AT THE TIPPING POINT?

Tom Goos, MAS

, is president of Image

Source, Inc. and PPAI board chair. Reach

him at

tom@imagesourceteam.com .

Tom Goos, MAS

PPAI CHAIR OF THE BOARD