PPB June 2021

When events, trade shows, travel and large gatherings were cancelled starting in Q1 2020, and restaurants, retail stores and venues temporarily closed their doors as well, most distributors experienced an avalanche of order cancellations. To stem the revenue loss and meet new demands, many distributors turned to selling personal protective equipment (PPE). This move helped many companies to mitigate the full impact of the shutdown with nearly eight in 10 distributors (76.5 percent) redirecting some resources to the sales of PPE, which represented 16.8 percent of the total sales volume across distributors in 2020. Without PPE sales, the industry is likely to have experienced even more significant losses. It was a year that took no prisoners—both large and small distributors experienced negative growth, but large distributors were especially hard hit. While small distributors with total industry sales of approximately $9.5 billion spiraled down (10.6 percent) at a faster pace from the decline that started in 2019 (3.7 percent), for large distributors, the average decline was even steeper. Distributors in the $2.5 million-plus annual sales bracket recorded sales of $10.1 billion, showing an average loss of 25.6 percent over 2019 (see Figure 2 ). With millions of workers moving to home offices for most of 2020, online shopping rose across most consumer goods categories, but the share of online sales for promotional products (17.3 percent) remained close to 2019’s percentage (18.6 percent). Online sales also declined proportionally with the total sales volume by falling 24.5 percent to $3.39 billion compared to $4.49 billion in 2019. The decline in online sales was steeper for large distributors (down 32.6 percent) compared to small distributors (down 3.2 percent). In fact, distributor sales fell across the board. On average, sales of products sourced from non-industry providers fell 18 percent from $3.6 billion in 2019 to $2.95 in 2020 and made up 15 percent of the total dollar volume. Likewise, sales of retail-branded and sustainable products also decreased by 18.7 percent and 18 percent, respectively. PPAI has researched and released industry sales data since 1965. This annual distributor sales study for PPAI is generally considered the most definitive and comprehensive of its kind in the industry based on actual sales reported by U.S. promotional consultant companies. The survey was conducted by Relevant Insights LLC, an independent market research, on behalf of PPAI. PPAI Exclusive Research: 2020 Distributor Sales Volume Estimate | FEATURE | JUNE 2021 | 39