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Business as Usual?

As the United States—and much of the world—starts a slow return to normalcy after pandemic lockdowns and safety measures, big and small corporations have changed some of the ways they do business. Those changes have been felt by our industry’s retailers and suppliers who provide personalized products for corporate customers.

Business as Usual?

ORDERS FROM CORPORATE CUSTOMERS HAVE HELPED TO PROTECT MANY PERSONALIZATION RETAILERS AS OTHER MARKETS HAVE SUFFERED DURING THE PANDEMIC

By Brian Stanley

As the United States—and much of the world—starts a slow return to normalcy after pandemic lockdowns and safety measures, big and small corporations have changed some of the ways they do business. Those changes have been felt by our industry’s retailers and suppliers who provide personalized products for corporate customers.

Retailers’ corporate sales during the pandemic were affected by a number of factors, from their location to the types of companies they count among their clients. We talked to three successful retailers who serve corporate clients to find out how they’ve fared in the pandemic, the innovations they’ve benefited from, their tips for other retailers, and what they expect for the future.

THE FINER LINE, ITASCA, IL

“Our corporate clientele runs the full spectrum. Some did not do well, some stayed flat, and others prospered,” said Mark Case, president of The Finer Line in Itasca, IL.

Case said corporate clients in service industries—like catering, hotels, and transportation—suffered from the lack of activity, while corporations that made equipment used at home, such as cookware, and pharmaceutical clients showed a lot of growth.

For the most part, industry retailers who cater to corporate clientele likely had an easier time during the pandemic than those who focused on athletics or conventions, for instance. Those retailers whose customer base disappeared overnight had to pivot to the pandemic’s new markets and products, like personal protective equipment. The Finer Line did sell personal protective equipment, but strong corporate sales meant the company did not have to completely shift their strategy.

In fact, overall, corporate clients have spent more over the last year with The Finer Line. Case considers the pandemic the third significant historic event of the 21st century in terms of the effect on The Finer Line, appearing on his list after the September 11, 2001, attacks and the Great Recession in 2008.

While 9/11 and the recession hit the economy—and spending—hard, the pandemic put a stop to live events while the corporate world went on, Case said.

“Corporations canceled their travel and events, but they still had their budgets. And if they don’t spend it, they won’t get it next year,” Case said. “They spent on employee recognition, clothing, apparel, drinkware, candy—things employees could use at home, things that showed them ‘we’re thinking of you.’”

In addition to corporations changing what they were spending on, they had to change how they got those products to their employees, especially if the employees were working remotely, as many have been.

The Finer Line saw a 68% increase in shipping orders in 2020 over 2019. Corporations couldn’t pick up boxes of awards or employee gifts for distribution at the office; instead, they turned to Case’s team to get those personalized products to their workers.

Drop shipping isn’t new to Case, but the volume involved certainly was.

“To drop ship thousands and thousands of pieces to individual employees’ homes was an enormous undertaking,” Case said. “We had to create and streamline those processes.

” With corporate customers still buying and The Finer Line working out drop-shipping to employees’ homes, you might think everything went smoothly. That’s not entirely true.

The Finer Line faced shipping and material delays for needed products. Making sure apparel sizes and personalization matched up to separate home locations was also a learning experience.

In the industry’s early days, personalization retailers bought tons of awards from their suppliers before the spring busy season; if they all sold out, they couldn’t get more, but if none of them sold, the retailers were left holding the bag. The typical model flipped years ago, with suppliers storing the blank product and shipping it to retailers who purchased it as they needed it. It moves risk to the suppliers, and only creates a short delay for retailers to get the products they need—provided the country’s robust shipping services are on time.

Many multilocation suppliers promise they can get products to most of their retailer customers in 1–2 days. During the pandemic, however, shipping was slow due to the shipping services themselves, creating delays that could frustrate both retailer and supplier.

For The Finer Line’s corporate customers, “the social aspects got hit hard, but more clients thought it was necessary to acknowledge employees with personalized products,” Case said.

As for the lasting impacts, Case believes “the pendulum” is making some correction back as social gatherings return, but the foundation may have permanently shifted.

“Working remotely was not the bugaboo the corporate world expected. (Events) will come back. Manufacturing can’t be done remotely…but I don’t think it will come all the way back,” Case said.

MONARCH TROPHY STUDIO, SAN ANTONIO, TX

In Texas, Monarch Trophy Studio has seen a bigger change in how corporate customers reacted to the pandemic. They didn’t just shift dollars.

“This year, budgets are way down,” said Charles “Charlie” Drago, the general manager of the San Antonio, Texas, store.

Shipping innovation became critical for how Monarch Trophy Studio served corporate customers during the pandemic.

“With people working remotely, the ability to service with a good shipping department has been so important,” he said.

Drago saw a significant shift from delivering a large order to one location for an event to shipping individual items to many locations. “That’s different ways of packaging,” Drago said. “We’ve been recommending lots of items that ship easily or things like crystal awards that come in gift boxes.”

This type of shipping increases labor costs. Retailers have to decide how they want to handle those increases, but Drago said it’s “critical” for retailers to pursue the best shipping deals they can get since they use freight services so much.

“Even before the pandemic, every January, we try to renegotiate with FedEx and UPS,” Drago said. You may be able to get a discount off of the published rate.

There are also companies that audit the major shipping services to determine if there was a missed delivery deadline or an item was first sent to an incorrect location.

“When that happens, you’re due a refund. The company will track that in exchange for half of the fee. I’d never have the time to (track) it on my own, so it’s totally been worthwhile,” Drago said.

Drago also recommends using multiple ways to ship products, such as buying pre-priced postal service boxes but also checking with private shipping companies that offer discounts.

Monarch Trophy Studio has seen an increase in website traffic during the pandemic, from both corporate clients and other customers.

“Orders increased when people can’t come in,” Drago said.

When customers are ordering products online, they don’t always know if they’re shopping with a local business that has a reputation to uphold or a company that doesn’t even publish its location or rely on the repeat business that comes from serving customers well. Retailers can help educate their customers about that.

“Push really hard on doing business locally,” Drago said.

Even if corporate customers aren’t placing their orders online, a good website can still be key for helping them select their products from outside of the showroom.

“For corporate orders, we had a lot of phone calls that turned into walkthroughs of the website,” Drago said. “It requires a little more service, but it’s worth it.”

K2 AWARDS, RICHMOND, VA

Business was good at K2 Awards in Richmond, VA, before the pandemic hit the United States.

“In February (2020), since we were having such a great revenue year, we thought (the pandemic would create) a supply issue coming from China with little impact on revenue, so we increased our inventory on all of our products. Obviously, this was wrong and a really bad idea,” K2 founder Charlie Moss said. “By March, we started to understand that our larger concern would be reduced revenue. Still, we thought it would run its course over a couple months and that by May, we would be OK.”

The shutdown softened sales volume and dropped revenue, forcing K2’s staff to realize the pandemic would be a long-term event.

Corporate business dropped more than 80% in the second quarter of 2020, but as the months wore on, corporate awards became one of their better performing markets.

“Since our industry was hit so hard, it is easy to forget that many, in fact most, companies either thrived or maintained their business volumes during the pandemic,” Moss said. “As a result, funds for a vast majority of our customers were ultimately not impacted by the pandemic.”

Moss expects corporate sales levels will be “back to normal” within the next couple of months. That’s not the case across the board for corporate clients, nor is it true of all markets K2 serves.

“Obviously, the hospitality industry was hit even harder than our industry, and we have seen very little activity from these customers,” Moss said. “With that said, even some hotels continue to recognize employees with awards, albeit at a much, much lower level. Other industries are having far fewer sales conferences and company retreats, and that has obviously negatively impacted our business overall.”

K2’s corporate clients are more likely to have changed how much they purchase rather than what they purchase.

“We have seen very little difference in terms of what companies are buying. Perhaps a few more gift items, but nothing earth-shaking. Many of our customers order the same items every time they order,” Moss said. “The biggest difference is that we have certainly seen a shift toward drop shipping to individual recipients. We have also had to be very flexible with constantly shifting event dates.”

Moss has focused on being prepared for when the impact of the pandemic recedes.

“Businesses still recognize the need to reward employees and customers. They know that the value of recognition far exceeds the cost of the award,” Moss said.

Though 2021 got off to a slow start, Moss believes the full year will be a success, driven in part by an increase in corporate awards: “This optimism stems from our business trends, the number of people being vaccinated, and the huge amount of money in the economy waiting to be spent.”

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