PPB July 2020

The pandemic and lockdown cancelled hundreds of thousands of events, upended entire industries and permanently closed some businesses. One of the hardest hit is the hospitality industry, a top buyer of promotional products, which includes hotels, airlines, meetings, conferences, tour companies and related businesses. By the end of May, the U.S. economy was expected to have lost 1.6 million jobs and $84 billion in earnings from cancelled conferences resulting in closed hotels and almost-empty planes, according to Emsi, an affiliate of Strada Education Network. Retail, the largest business sector for promotional products, according to PPAI research, was also among the casualties suffering temporary closures resulting in huge revenue losses, particularly among furniture, home furnishings and clothing stores. The educationmarket, also a top buyer, suffered economic losses as well with school closures and cancellations of proms, graduations and end-of-school-year events. Even now, as businesses are reopening and people are returning to workplaces, the future is unclear and the question on everyone’s mind remains: How will our industry find its way back and when? “Now is the time for a complete reset and for people to reimagine what their business will be,” says Jonathan Isaacson, president at supplier Gemline in Lawrence, Massachusetts. “What it was, is really not what it will be any time in the near future.” He cites events and conferences, a big piece of the industry’s business, and the fact that more people are now working from home on a long-term basis, a trend that will affect commercial real estate and related industries. If these markets go away, what will take their place? “Where are the places where we are driving value as an industry and how will that change the world that is today?” he asks. While the sales of PPE buoyed some suppliers and distributors over the past few months, he doesn’t believe these products are a natural fit for the promo industry. “Three-ply masks without a logo, and the fact that we are buying them from the same guy in Asia from whom we buy our stress balls, is not the best possible course of action. If PPE fails, it has a much bigger implication than an issue with stress balls,” Isaacson says. Noting that the safety of his associates is of paramount concern, he has put together a Standard of Care Advisory Committee that includes epidemiologists, microbiologists and an environmental health pro to help ensure the company is selling the best PPE possible, to provide education and best practices for the industry and to help keep his workplace safe. As far as sales, Gemline had to shut down for a while but later reopened when it was deemed an essential business. The company added new categories to sell products such as soap and hand sanitizer and is selling kits and bundles that combine PPE with other products. By July, it will have launched additional new products and services that bring value to distributors and their end buyers. The latter is just one example of the importance of getting to market quickly. “What has changed is the speed in which we’re implementing changes in the organization,” says Isaacson. “We’re on COVID time. If we see an opportunity, we move on it quickly.” When asked when sales might return to pre-lockdown levels, he says Gemline wasn’t hit quite as hard as others and weathered it well, but from an industry perspective, it’s going to be a long road back. “Whole industries were decimated, and it will take a while to rebuild to where we were. We need to remember that this is a huge tragedy—especially for the people who’ve put their blood, sweat and tears into companies that are now gone— through no fault of their own. It’s an event that was out of everybody’s control, no one saw it coming. It’s a human tragedy on many levels.” Another victim of the pandemic is the industry supply chain. “Our relationship with China has gotten a lot more tense. That’s good for nobody,” he says. “We need to find a way to engage our way through this because there is no way to easily move the supply chain out of China—you can move some, but not all of it. It’s going to be an issue for the industry and it’s very category-dependent.” What he’s most optimistic about is the resiliency of the promo industry. “This is a very resilient industry with product that has real value. People will find a way—one way or another the business will be rebuilt. It may be different, but it will come back.” Jonathan Isaacson President, Gemline Even now, as businesses are reopening and people are returning to workplaces, the future is unclear and the question on everyone’s mind remains: How will our industry find its way back and when? Supplier Insights | FEATURE | JULY 2020 | 43