Promotional Products Work: Retail Therapy
The U.S. is home to about 4 million registered retail establishments that run the gamut from brick-and-mortar shops to online retailers that sell both staple and discretionary merchandise. Altogether, the retail industry contributes about $3.9 trillion to the annual GDP, according to the National Retail Federation, with consumer spending accounting for more than two-thirds of U.S. economic activity.
Whether shoppers are browsing in person or clicking a button to buy, they’ve largely returned to their pre-pandemic spending habits. A McKinsey report reveals that nearly half of U.S. consumers (44%) feel optimistic and plan to spend more this year than last. In 2021, U.S. retail sales topped $6.6 trillion, according to the U.S. Department of Commerce—the highest retail sales ever recorded in a calendar year.
While overall sales grew over $1 trillion from 2020, consumers are concerned as just about everything seems to be getting pricier. A&M Consumer and Retail Group surveyed consumers this spring and found that 49% say their desired products and services have become too costly to buy, and 30% say that what they want to buy isn’t even readily available.
Consumers are also shelling out more at the pump, which may limit their disposable income. In May 2021, fuel cost an average of just under $3 a gallon, according to AAA. In May 2022, gas prices hit an all-time high, averaging $4.37 for a gallon of regular fuel.
However, despite this strain on consumers’ budgets, spending remains robust. One McKinsey study shows that U.S. consumers spent 18% more in March 2022 than they did in March 2020, and 12% more than they were projected to spend based on the pre-pandemic trajectory.
Retailers can keep up with consumers and win their loyalty with promotional products. Businesses can also use branded apparel and merchandise to turn employees into brand ambassadors, helping expand visibility for their retail shop or website.
Amid persistent supply-chain snarls, skyrocketing inflation and troublesome gaps on their store shelves, retailers are caught in a web of seemingly endless issues. They’re in the middle of what economists are calling the “great retail reset.”
According to Deloitte, this reset involves retailers addressing current challenges and looking ahead to how they want to conduct business in the future. For example, some retailers are reassessing how they buy and sell products. Others are choosing to scale back on promotions to boost profits.
Staffing is another component of the great retail reset, with 74% of retailers expecting shortages in customer-facing positions this year. More than half (56%) also expect shortfalls in warehouse positions. Retailers are competing against every other market for talent, and to stand out, they need to capture the attention of jobseekers. If businesses want to take down those “help wanted” signs for good, they can use promotional products to recruit and retain workers.
One-third of consumers say they are spending more this year on experiences than possessions. When they open their wallets, here’s what they expect:
- 96% want a seamless experience across channels
- 68% want to shop at retailers with strong ESG initiatives
- 64% are willing to spend, but need to rely more on credit or buy-now-pay-later option
- 84% are seeking experiences outside the home, compared to just 42% in 2021
Source: Deloitte’s 2022 Retail Industry Outlook
Consumers increasingly want the option to Buy Now, Pay Later (BNPL). Almost a third of consumers have used BNPL to finance a purchase, including 45% of millennials. Nearly half of consumers (47%) who take advantage of BNPL options anticipate using it more than they did in 2021, and 81% say they will use BNPL in the next year. Retailers that use promotional campaigns to promote their BNPL options can incentivize bigger purchases and make those purchases more accessible to a wider audience.
Source: TD Bank’s Consumer Spending Index
Compared to before the pandemic, most people aren’t spending leisure days out shopping or lingering in stores. More than half (59%) are mostly or only shopping when they really need something, and 54% say they are shopping less frequently. Retailers can stay top of mind and encourage shoppers to return by using promotional products.
Source: A&M Consumer and Retail Group
Brick-and-mortar sales grew faster than e-commerce sales in 2021, with physical stores growing 18% compared to online stores growing 14%. Many consumers want to touch and feel products before buying. By giving them promotional items when they’re in the store, retailers can add to the tactile experience that consumers crave.
Source: U.S. Department of Commerce
More than 60% of U.S. consumers have experienced out-of-stock items recently, and only 13% waited for the item to come back in stock. Some shoppers (39%) switched brands or chose another product, and 32% switched retailers.
The retail industry employs a vast number of workers at all different levels and in many different roles. Consider these stats:
- One in four American jobs is supported by retail
- Retail supports 52 million jobs and represents the nation’s largest private-sector employer
- Nearly eight out of 10 retail employees say they are happy with their jobs
- Six out of 10 retail workers have been promoted and nine out of 10 have received a raise
- 75% of retail employees choose to work part time
- One in four of America’s working teenagers hold a retail job
Source: National Retail Federation
- Shoppers can buy from an estimated 12-24 million e-commerce sites
- Around 2 billion people per year buy a product online, and 30% of these purchases end with a return request
- Worldwide e-commerce projections show that about 95% of all purchases will be made online by 2040
- 73% of consumers use multiple channels to shop online
- Sales initiated by voice command are projected to reach $40 billion this year
- One in 10 omnichannel shoppers have made purchases via social media
- 45% of consumers say social media influences their purchases
According to a McKinsey report, more consumers are switching brands and retailers than at any time during the pandemic, and 90% continue to be open to buying what they need from any company. Retailers have an opportunity to use promotional products to build relationships, add value and inspire customers to return.
The Mini Bubble Umbrella makes a great gift-with-purchase item from retailers like shoe stores and boutiques. It features a 44-inch clear vinyl arc and comes packaged in an eco-friendly sleeve. The umbrella connects with the RainAlert app, which sends recipients a customized text when rain is on the way.
AAA Innovations / PPAI 110972 / www.aaainnovations.com
The Structured Billboard Tote Bag makes an excellent marketing tool, whether retailers sell them at point of purchase or give them out free as part of a promotion. These bags are made in the U.S. from recycled billboards.
Landes Inc. / PPAI 221733 / www.landesusa.com
Retailers that want to make a statement at community events can outfit employees in the Full-Sublimation Print T-Shirt. Every inch is covered in artwork, with the shirt sublimated from front to back.
LimeLight USA / PPAI 223938 / www.limelightusa.com
The 20-ounce Viking Nova Tumbler lets retailers put their logo right in consumers’ hands. This stainless-steel tumbler keeps liquids cold for 24 hours and hot for five hours. Choose from several customization options, including laser engraving and full-color digital imprint.
IMAGEN Brands / PPAI 114197 / www.IMAGENBrands.com
Sporting goods stores and outdoor retailers can use the Day Tripper as part of a promotional campaign. Designed with a sewn-in floor that keeps out sand and dirt, recipients can use it at the beach, park or on camping trips. It’s light and portable, and branding is available on a carrying pouch with handles.
Ariel Premium Supply, Inc. / PPAI 161650 / www.arielpremium.com
Retailers can make a splash with the Platinum Collection Beach Towel, which is made from 100-percent cotton terry velour. Give them as employee gifts or use them to thank customers for their repeat business.
Pro Towels / PPAI 112755 / www.protowels.com
The All-Over Print Lounge Pants are great for retailers who want to tap into the college market. Students can stay comfortable on and off campus in these lightweight, made-in-the-USA pants.
FPS Apparel / PPAI 273314 / www.fpsapparel.com
Audrey Sellers is a Dallas-Fort Worth-based writer and former associate editor at PPAI.