PromoKitchen

Welcome to Salt & Pepper! Salt & Pepper is basically the PromoKitchen equivalent of debate team. The purpose of this monthly article is to open up discussion and conversation on different challenges facing the Promotional Products Industry. In this edition of Salt & Pepper, Chef Kirby Hasseman and industry veteran Bill Petrie debate whether or not our industry should continue using the printed catalog.

Who do you think wins this one? We welcome your comments!

NOTE: Salt & Pepper is intended to foster intelligent dialogue between professionals. This is not a dagger throwing contest. Be honest and authentic, but please also be kind and keep it classy.

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Salt: Keep the Catalogs – Kirby Hasseman

Keep the Catalogs!

From the guy who argued that we need to KEEP the term SWAG, you might be surprised to hear that I am the one arguing to KEEP the catalog…but I am.

We need to keep the catalogs! I know the arguments for doing away with catalogs. We are in a better technological place. Suppliers have websites where we can find the information (most of them). We could use Sage, ESP, Distributor Central, Promo Marketing (and more) as search engines. There is probably even an app for that.

And let’s face it; the number one reason suppliers would like to do away with catalogs…cost. I do understand.

But here’s why we need to keep them…

1. Not EVERYONE is Tech Saavy: I’m not sure if you have looked around the industry, but not all of our sales force is 25-years-old. Some of those, more experienced members of the sales team WANT a catalog to show. So do we just ignore that part of the industry? If so, I think we might be ignoring a fairly significant portion.
2. Some CLIENTS Still Like Catalogs: Not as many of my clients want catalogs, and the percentage is probably shrinking, but some still like to have catalogs as reference. Needless to say, I want them to have those catalogs to thumb through when they are ready to order!
3. Catalogs are IDEA Generators: Having a catalog is still a great way to get ideas. I just can’t put my feet up and thumb through…a website? A well-done catalog is a great way for suppliers to show me new ideas that I can show clients.
4. Not All Supplier Websites are Awesome: Let’s face it gang, there are some supplier websites that are awesome. They are easy to navigate, make it easy to share and search, they have great imaging, and the pricing is clear; but are they all like that? Think on that.
5. Catalogs Can Be a Differentiator: Mark Twain said, “Whenever you find yourself on the side of the majority, it’s time to pause and reflect.” Well, if everyone is telling you that “print is dead,” this might be a time to be different. Of course you need a website. You need to be tech saavy, but maybe you can be different by moving away from the rest of the crowd.

As is the case with many things, maybe we just need to meet in the middle. Some suppliers send me 10 cases of catalogs without me asking for them. Some act like they don’t want me to sell their merchandise and won’t even send me one. Catalogs are still an important way to showcase the diverse array of products we sell.

Pepper: Kill the Catalog- Bill Petrie

For decades, distributor owners and salespeople have utilized the supplier catalog system to develop business and grow revenue. While technology has shifted the way clients want and expect to receive information, far too many distributors continue to rely on dropping off a catalog and hoping for an order – this is a huge mistake. The traditional printed catalog system should be dismantled for the following reasons:

1. Lazy way to sell – When you march into someone’s office, drop off a catalog, and let them know you can decorate any product within those pages, it’s the lazy way out. Clients want ideas, not a 600 page monolith that they need to comb through to find what they want. You are essentially asking the client to do the work for you and that does not add value to the relationship.
2. Lack of mystery or magic – Where there is mystery and magic, there is margin. Trying to leverage a printed catalog completely destroys any hope of mystery, and devalues what you do. When you drop off a catalog and ask your client to tell you what they would like, you may as well suggest to them that they shop around for the best price – because that is what they will likely do.
3. Online Availability – The vast majority of clients who insist on seeing a “catalog” would rather have access via the internet. I realize that not every supplier website is cutting edge and some aren’t even easy to navigate, but most are laid out in an intuitive manner. If you don’t like how an online catalog is presented, give the supplier feedback so they can improve the user experience. Believe it or not, suppliers do appreciate honest, well delivered feedback.
4. Industry Search Engine – The days of lugging 85 pounds of catalogs into your office for product research are over. Whether it’s SAGE, ESP, DistributorCentral or another search engine, you have infinitely more information at your fingertips than ever before. Furthermore, you can view the information provided by these companies on a computer, tablet or a smartphone, where you want and when you want – all without the fear of throwing out your back from carrying stacks of catalogs around.
5. Cost – It would be foolish not to mention the exorbitant cost of printing catalogs – and the cost isn’t just financial, it’s the depletion of natural resources, and excessive waste of human resource as well. It would be better for the supplier to reallocate the capital and human resource to improving user experience online, or developing/improving mobile apps.
6. Out of Date – Ask any supplier how quickly a printed catalog is out of date and they will tell you that it’s obsolete BEFORE distribution. Whether its product substitutions or simple stocking issues, the printed catalog is a poor substitute in a world where access to accurate information is not only a necessity, but is readily available at the mere touch of a finger.

Catalogs are fast becoming an anachronism on par for paying extra for nothing more than a great Yellow Page ad placement. If we want to be viewed as a forward thinking advertising resource, we need to start acting like one. For distributors and clients alike, printed catalogs have served their purpose and done their duty. It’s time we allow them die with dignity.

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Chefs weigh in:

“Kill the printed catalog. Catalogs are nothing more than a crutch used to sell what we offer as commodity products instead of creating custom solutions that use branded merchandise to attain specific desired outcomes.” - Nate Bailey

“In my opinion, the printed catalog has already been dead for years. As suppliers, we only make them to keep people from complaining. If someone asks us to mail them 10 catalogs in an email, we will just delete the email. We simply don’t want to sell to that type of customer.” - Jason Lucash

“I’ve been an ardent opposer to paper catalogs the last several years. However, a lot of companies’ websites just do not do their product offering justice. Also, a lot of clients do still like to flip through catalogs. I’ve even surprised myself this year with how often I’ve gone to a paper catalog to get ideas. I will still, the majority of the time, go online or go through an e-catalog, but there is something about turning the pages and seeing everything up close. It’s a thoughtful perusal. I find myself going through a catalog and ideation starts happening– it activates something in my creative thought process. Turning the pages of a catalog just engages my brain in a different way than viewing photos on a computer monitor.” - Jessica Hutwelker

“Keep it.  Catalogs still drives sales and have a place in your sales and marketing toolkit. Adjust your use,  but don’t drop them all together. “ - Dale Denham

“Kill it, then re-imagine what it could be if the right chrysalis was developed.  Imagine an interactive catalog that shows you what you want, uploads your logo, gives you a demo for approval, and shoots your company an order when the customer is ready.  Have the product showcased so it can be viewed in all angles.  Have more information, including CPSIA info, lead times, manufacturing content and product availability.  This hybrid catalog could even suggest other offerings that could be paired with the item.“ - Marshall Atinkinson

“From a supplier perspective, I say keep it. We print more and more catalogs each year. Until our industry miraculously changes by way of PPAI/ASI changing their model of “no barrier to entry”, the catalog will always be a useful source for the “newbies” to utilize.” - CJ Schmidt

Your turn to join the conversation – Keep the printed catalog, or kill it?

Welcome to Salt & Pepper! Salt & Pepper is basically the PromoKitchen equivalent of debate team. The purpose of this monthly article is to open up discussion and conversation on different challenges facing the Promotional Products Industry. Given the enormity of the Staples acquisition of Top 40 Distributor Accolade Promotion Group, chef Kirby Hasseman and industry veteran Bill Petrie discuss whether the continued consolidation within the industry should be of concern to independent distributors. Their respective arguments are below.  What are your thoughts on each side? We welcome your comments!

NOTE: Salt & Pepper is intended to foster intelligent dialogue between professionals. This is not a dagger throwing contest. Be honest and authentic, but please also be kind and keep it classy.

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Salt: We Should Be Concerned! – Bill Petrie

It seems that every few months there is an announcement of yet another acquisition from one of the top distributors. This month has been no different with the news of Staples absorbing Accolade Promotion Group out of Canada. Many in the United States aren’t familiar with Accolade but they were number 21 on the Counselor Distributor top 40 list in 2013 (2014 rankings haven’t been revealed) with over $74MM in annual revenue. This means the partnership between Staples and Accolade now represents a half billion dollars of revenue in the promotional products industry.

Think about that for a moment – one half billion dollars.  And don’t think the acquisitions will stop there, because surely they will not.

I understand that this is how corporate America operates. Heck, I’ve been part of many acquisitions both in and out of our industry, but the continued growth by acquisition by a mega-distributor like Staples continues to further the divide between the haves and the have-nots. With even more buying power, the company will likely continue to position promotional products as a commodity rather than a creative advertising vehicle. That positioning will only further promote industry wide margin erosion, which puts undue pressure on the middle class of our advertising world: the small $1MM – $10MM distributorship that drives creativity and moves the industry forward.

From my perspective, this is akin to Comcast buying up their competition – most recently Time Warner Cable. At one time, Comcast was known as revolutionary as they propelled the cable industry forward in the 1980’s and 1990’s. Now, Comcast is synonymous with the term “bad customer service experience” yet has effectively killed off any competition for cable television in the United States. I’m not necessarily suggesting Staples will follow Comcast’s exact route, but the continued growth by acquisition alone should be concerning to distributors of all sizes.

Pepper:  I don’t feel threatened – Kirby Hasseman

Another month, another distributor acquisition. Frankly, I believe this should be met with a collective yawn from the industry. There are several large distributors who seek to grow by either acquisition or recruiting salespeople with a book of business and, frankly, that’s their prerogative! Yes, this is a big acquisition, but it won’t negatively impact me or my business.

Why? I built my business on creativity and relationships and, generally, the big distributors struggle with both. Sure, they might have a few more points off of EQP with one supplier or another, but they don’t have the single biggest differentiator – the creative mind of an entrepreneur. Additionally, with so many middle managers sharing the title of Vice President they will never be able to be as nimble or flexible as the little guy. I take a great deal of solace in that because this is still an industry built on relationships and creating value – something I know I do better than the larger distributorships.

To me, this is a call to action that I and my company need to hustle. This is an opportunity to get my message of creativity, personal service, and a fabulous client experience to my clients and future clients. Staples can have the name recognition, slightly better pricing, and more bodies in the building, but they will continue struggle where the rubber meets the road: building meaningful, long-term relationships based on creativity and an creating exceptional client experience.

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Chefs weigh in:

“When you run out of organic growth, and if you have the cash, you buy the competition.  Immediate market share boost and access to capital and new markets, etc. However, not everyone succeeds going this route especially if cultures & strategies are not aligned.” - Russ Mogell

“I’ve been watching this happen with Mattress Firm. They are showing quarter over quarter growth of something like 25%? per quarter, but with something like $1 billion in sales and $780 million in debt, plus the complete dissolution of the existing corporate culture of the brands they acquire – could be a recipe for implosion.  In my opinion, acquisition is not always a sustainable means of gaining market share. As it pertains to promos, however, Staples and APG, might be a different story.  Both companies already have a significant stake in the industry and share volume commonalities. Adding additional capital to existing power? Guess we’ll see how it plays out. I have been saying 3-5 years before the industry really starts shifting and people have to worry. Then things like this happen and I start to wonder if 1-3 years might be more like it.” -Charity Gibson

“Accolade is Canada’s largest distributor. What I think is unique about this is that we are now starting to see big buy big whereas in the past, you had big (halo etc) buy small.” - Mark Graham

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What do you think? Should independent distributors be worried about industry consolidations?