2020 was defintely a challenging year for all of us in the promotional products industry. According to ASI's Distributor Quarterly Sales Survey, distributor's sales dropped by 19.8% in 2020 compared to 2019.
Last year the distributors's total annual sales was $20.7 billion, which is the lowest collective tally since 2013. However, the decline of less than 20% seemed encouraging, considering that earlier on in the pandemic, promo firms deared a steeper decline of 30-40%.
Regardless, some firms including 4imprint did fall into a steeper decline range, they reported a sales drop of 35% in 2020.
The industry’s pivot to personal protective equipment (PPE) prevented a more precipitous year-on-year decline. PPE/hand sanitizer sales accounted for $6 billion in revenue in 2020 – 29% of all industry sales. If you exclude PPE revenue from the total, distributor sales would have fallen 43% for the year.
Traditionally the 4th quarter is the promotional industry's strongest quarter,distributor sales were down just under 17% year-on-year, a significant improvement from the 44.4% plummet in Q2.
“Although the demand for PPE decreased after the initial panic buying early on, the demand picked back up in late Q3 and throughout Q4 with our AIA community seeing large recurring orders,” says Nancy Schmidt, CEO of Top 40 distributor AIA Corporation. “This, coupled with a healthy increase in traditional promotional products sales in Q3 and Q4, provided for a nice close to the year."
According to Kevin Walsh, CEO of Showdown Displays, "COVID-19 appears to have had less of an impact upon distributors who were able to more nimbly react and respond to the shift in market needs,” “2020 was tough, but also inspiring,” Walsh says. “I’m excited about the year ahead, but reasonable at the same time. We anticipate 2021 will start slowly as the vaccine is beginning to become available and that it will accelerate in the summer, rising rapidly in late Q3 and into Q4.”
The industry’s largest distributors (revenue of more than $1mil) fared the best in 2020, with sales being down, on average, by 15.3% compared to 2019. Meanwhile, the industry’s smallest distributors (revenue of $250,000 or less) reported an average year-on-year sales drop of 33.1%.
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