PPAI Magazine January 2024

Must Read | Outlook 2024 5 Threats To Take Seriously In Outlook 2024, promotional products professionals have identified the most daunting potential threats facing the industry. Any industry firm should take care to protect against these in order to keep growing and thriving. While a few of the threats have long existed in one form or another, most of them represent uncharted territory, meaning how the industry at large reacts to their growing presence will likely have an impact on the future. Here are the threats most commonly outlined: 31% | Economic Instability One word is the first out of the mouths of many distributors and suppliers when it comes to industry threats: “economy.” One supplier points out that what you read on the front page of a newspaper has a strong possibility of affecting the promo industry. “World crisis and financial hardship [are threats], as promotional items are the first to go away in budgets.” Poor economic conditions can also cause companies, including those in the promo space, to abandon or pivot away from plans and goals. As one supplier says, “A recession can lead to a lack of commitment to quality over quantity and sustainable brands.” In a PPAI Media special report from 2023, one financial expert referred to companies trying to ward off “the recession that refuses to be.” The economy is something that no company in promo can have any control over, but Alok Bhat, PPAI market economist and senior research manager, emphasizes that firms are not powerless. “In the face of economic instability, the promotional products industry must not just endure but innovate," Bhat says. "Our resilience lies in our ability to adapt, turning challenges into opportunities for growth. Embracing change and diversifying our approach will be key to thriving in an unpredictable market." 25% | Global Supply Chain Volatility Most in the industry remember the supply chain nightmares that followed 2020’s period of lockdown. Enormous lags in delivery, unpredictably and missed deadlines became the norm. While we’re well past that moment in time, the global supply chain has still proved precarious, and the world is anything but stable as things stand. This is a big concern for distributors and suppliers according to the survey, with one distributor pointing out that supply chain pricing changes make it difficult for smaller distributors to compete with their larger counterparts. Much of this concern comes back to a perceived overreliance on China and America’s tenuous relationship with the other global superpower. “Any Far East conflict, and things could get interesting,” one distributor noted. Human rights issues, China’s handling of things like COVID-19 and geopolitical relationships all point toward understandable concern. “If China shuts down, it really impacts the industry,” one supplier says. “We need distributors to Alok Bhat Economic Instability Global Supply Chain Volatility Government Regulations & Environmental Concerns 31% 25% 15% 13% 10% Key Threats Technological Disruption Brand & Reputation Management 74 • JANUARY 2024 • PPAI