Sourcing City have analysed the trends in Promotional Merchandise enquiries through Sourcing City since the pandemic started.

 

The month of January had started well with over 102% of the level of enquiries generated in Sourcing City compared to the previous year.

 

Nervousness entered the market in February, and it will come as no surprise to anyone that enquiries ‘dropped off a cliff’ as soon as the National Lockdown kicked in Mid-March 2020. (16.03.2020). Indeed, an immediate impact was felt with a significant decline in industry enquiries for the remainder of March. In April things got dramatically worse with enquiries dropping to 22.6% of the equivalent month in 2019.

 

From numerous conversations we have had it is clear that this massive impact was mirrored across most distributors.

 

May remained low as companies regathered themselves and began to find ways to react to the situation. It was also clear that the ‘entrepreneurial spirit’ that runs strongly through distributor & supplier companies in our industry kicked in as people fought to find way to save their businesses’.

 

During May, Sourcing City contacted all suppliers and asked them to send in their ‘PPE Related products’, and then launched a new search category for ‘PPE & Key Worker Products’ as these seemed to be the only products of interest to any end users at that time.

 

From then until now, products from this new search category represent over 95% of the products featuring in the Top 250 Searched Products.

 

In June things improved slightly, (If going to 46% of last year can be considered an improvement), July & August plateaued at around 40%, and then increased to 50% of last year in September and it was felt that a recovery may be underway.

 

It is worth mentioning that distributors report that conversion rates have worsened due to customers making slow decisions, or no decisions at all, so distributor order percentages will lag behind our industry enquiry statistics.

 

To see the full analysis, please click here.

 

What Next:

 

It is hard, if not impossible to predict the future, especially as further lockdowns and increased Covid cases are being reported across the country.

 

The promotional merchandise industry has been one of the hardest hit, and we have particular additional challenges because of where we sit in the marketing mix, and our products are tactile, which is not a great thing right now! Add to this the environmental challenges against plastics and waste, it seems we have some obstacles to overcome in the future. As an industry we have adapted before, and we will do so again – it is hard to keep good people down!

 

Whether as individuals or a business, it is clear that a recovery for the economy hinges on confidence, confidence to go out, to invest or to buy.

 

Due mainly to the recent excess spend by the Government, the amount of liquid money in the UK economy is currently 3x normal (EU = 2x). This means that people, and perhaps surprisingly many companies (dependant on industry), have cash to spend. Until the end of October companies will have been well supported by the furlough scheme and during this time have planned how to restructure their business relative to the expected immediate future income. This is likely to mean that a return to profit will happen relatively quickly when spending recommences.

 

The spending will happen when confidence returns, the million dollar question is; ‘when?!’.

 

NB: Sourcing City is used by over 400 Distributors who represent in excess of 60% of the entire UK Market Spend.

 

 

Published on: October 9th, 2020