If you were going to pinpoint two areas that steered business plans, budgets, product design and staffing decisions last year, look no further than in the areas of trends and technology.

Technology was a double-edged sword of sorts, with progress and upgrades happening at an amazing, whiplash-fast pace. On one side of the scale was the ability – like no other in recent history – to level the competitive playing field, making the differences between a multimillion dollar company and a local two-person shop appear minuscule.

On the other side, however, there was the feeling that if you weren’t up to the fastest speed and able to communicate knowledgeably in the newest techno-language, you were pretty much out of the loop.

Trends, too, had both suppliers and distributors scrambling to produce and deliver the hot items du jour, whether it was brushed silver, retro, grungy industrial/recyclable or the look of the year: the iMAC-inspired translucent lollipop colors that swept literally every incarnation of product imaginable. Which is, of course, the trouble with trends and fads – they’re almost impossible to predict, and once they’ve been branded a bonafide hit, it seems like everyone else has beaten you to the bandwagon.

And The Winner Is ...

Although it’s not much of a surprise that technology came in number one across the board on survey questions like “most significant change in business” and “most challenging trend,” it was startling to see on how many levels and on how broad a scope technology is changing and influencing this industry – to compare it to the massive changes brought to the U.S. by the industrial revolution wouldn’t be an exaggeration.

Industrywide computer use is practically a given, used for day-to-day business operations such as word processing, accounting and bookkeeping, invoicing, order tracking and desktop publishing, among many others.

When it comes to hardware and hard drives, MacIntosh is still king in the areas of art and design, with 95% of responding distributors and 83% of suppliers picking the Apple as their machine of choice. However, much to Bill Gates’ delight, Windows is still the most widely used program in promotional products businesses, so say 96% of distributors and 97% of suppliers.

Regarding technology and its effect on suppliers’ and distributors’ businesses, both groups note the same three areas as the most influential: e-mail (especially in relation to easing the transfer of artwork and for the purpose of communication), the Internet and Web sites.

To put the situation in perspective, it was only three years ago that less than half of suppliers responding to the 1997 State of the Industry survey even had e-mail. That number has risen so dramatically (to nearly 100% among suppliers and distributors) that you’re literally the odd man out if you don’t have it.

Caught In The Net

There’s no doubt about it, we’ve been caught – hook, line and sinker – by the amazing speed, reach and accessibility of the Net. Today’s children are going to be incredulous 10 years from now when asked to imagine a world without it.

In this industry, with the sheer amount of research and sourcing of products, the Net’s research capabilities are a time-management godsend. Its applications are multifunctional, as 49% of responding distributors say the Internet has helped them find business in the U.S. and 19% say it’s aided their international business efforts. On the supplier side, 60% of respondents say the Internet has helped their business in the States.

But as with most things that are new, there’s also a certain amount of uncertainty and suspicion while people familiarize themselves with the lay of the land. Forty-eight percent of responding suppliers twitch at the thought of distributors bargain-shopping by sourcing products direct from overseas via the Net, and a whopping 82% of distributors are concerned that suppliers are using the Net to target end-users without the customary one degree of distributor separation.

Then there’s the issue of increasingly savvy end-users, who can easily do a keyword search and find their own products for their promotional needs, thank you very much. All of this speaks to the First Commandment of promotional product selling: If you build relationships, the clients and sales will come – and stay.

Whaddaya Mean You Don’t Have A Web Site?

They are now what cell phones were five years ago – a status symbol and litmus test of being hip, cool and with-it. Everyone who’s anyone has a Web site, and if you don’t – well, it’s kind of like being branded with a scarlet “O” for “out-dated,” “out of touch” and “old school.”

According to respondents, 65% of suppliers report having a Web site, as well as nearly 60% of distributors. Of those suppliers with Web sites, 55% maintain it internally and 39% use an Internet Service Provider (ISP) as a host. For the distributors who have Web sites, 48% use an ISP host and 44% maintain it through their own businesses.

With such a large population of the industry online, you’d expect Internet sales to be driving a sizable portion of business on each side, but we don’t appear to be there quite yet.

Dot.Com On

Another area in which the promotional products industry is mirroring society is the infiltration of dot.com companies. Five years ago they didn’t exist. But now – and this is a credit to the industry’s adaptability and responsiveness – companies structured specifically for the promotional products business are quickly finding ways to adapt the newest technology to streamline the ordering process, the supplier/distributor back-and-forth, art transfers and order tracking. Without question, these companies are the newest incarnation of promotional products companies and can now be listed along with the standard designations of “suppliers,” “distributors,” “franchises,” “direct houses,” etc.

The most notable start-ups, each with impressive business plans and financial backing, include such companies as Branders.com, promoOrder.com, StarBelly.com and eCompanyStore.com, all of which add a new dimension to the promotional products operations picture. Additionally, established companies with long histories in the industry realize that the Web and e-commerce are the waves of the future and have added those services to their existing packages – for example: ASItransact.com and Norwood.com.

One thing is certain: To discount these dot.coms and their business efforts as a fly-by-night fad is short-sighted and dangerous from a business perspective. If you need proof, consider two telling factors about the faith they inspire: the vast amounts of money investors our pouring into these companies and the notable, big-name industry talent they’re attracting.

Trends: Wearables Sew Up The Market

According to this year’s “Distributor Trends, Opportunities and Challenges” survey, as well as the “Supplier Trends Opportunities and Challenges” survey, both groups continue to be wowed by the high volume of wearables requested by clients. Mirroring industrywide statistics, wearables constituted the lion’s share of products sold by distributors who responded to our survey, due mainly – as in past years – to the sweeping success of the corporate causal movement in the American workplace.

It bears noting, however, that some analysts predict a corporate backlash and reversal of casual attire because of what’s being called the “Dilbert effect.” In one of Scott Adams’ most-famous “Dilbert” outings, he shows the result of employees being given the freedom of choice with their work wardrobe: An office staff strolling the halls in robes, slippers and bath towels. A slight backpeddling of the casualness of clothing in the office would be a natural stage in a cyclical trend and could produce a return – albeit not fully – to a more formal and professional-appearing office dress.

But for now, much like the economy, good times are the status quo for wearables in the promotional products market, and both suppliers and distributors are quick to point out that certain offerings – the basic T-shirt, golf shirts and jackets – will always be mainstays.

Additionally, wearables suppliers note an increase in requests for specialized wearables, such as custom, women’s and children’s, private label and high end. Distributors report running into inventory shortages and some delayed orders – obviously a downside of being the most popular product on the block.

Employees Call The Shots

Another continuing trend in 1999 – and an overwhelming thorn in the side of many companies who responded to our surveys – was the wide-open job market. Employers pretty much had to roll out the red carpet and give away the store with benefits and perks once unheard of to attract and keep good employees. In many cases, even the sweetest of employment packages weren’t enough to keep workers in one place for very long.

Employees know they’re in demand, and the resounding sentiment seemed to be “you need me way more than I need you.” That take-it-or-leave-it attitude – coupled with the fact that an increased reliance on technology has forced employers to find people with a deft hand at building and maintaining Web sites, understanding e-commerce, a tech support system – has placed further strain on an already limited workforce.

When asked to rate the level of trouble they had in finding a qualified technology staffer, an overwhelming number from both groups responded that it was “very difficult.” Both supplier and distributor respondents said it took an average of eight weeks to find a tech-oriented employee.

If you want an indicator as to where all the good techies are flocking, look no further than a recent study funded by Internet giant Cisco Systems, which found that the Internet economy – companies or parts of companies that generate revenue directly from Internet-related activities – accounted for nearly 2.5 million jobs and almost $524 billion in revenues in 1999 alone.

And though that’s just a sliver of the nation’s workforce of approximately 129 million and its $9.3 trillion economy, the translation is that the Internet economy employs more people than the insurance or public utilities industries, and twice as many as the airline industry. (A saving grace to the employee drain is the fact that the Internet industry is one hell of a hot market to set your sales sights on, if you haven’t already.)

Because there’s no end in sight in the search for viable, reliable, experienced employees, our advice is to keep your woo shoes on if you want to get good people. To keep them, now’s the time to embrace the concepts of employee recognitions and awards programs – and dole them out liberally.

The M&A Rollercoaster Ride

If it was hard for you to keep track of which company was being bought by who and who was being folded into another, you’re not alone. Suppliers and distributors across the board ranked an increase in mergers and acquisitions – and subsequent reshuffling of decision-making contact people – as one of their toughest challenges in 1999.

Suppliers shouldered the burden of the rampant buying, selling, morphing and dissolving of distributor companies and point people they had carefully crafted relationships with. But at least they could rest assured in the knowledge that the replacement contact in a distributorship would have roughly the same agenda as their predecessor.

Distributors had it much worse. More than a few respondents reported having lucrative programs in place with an end-user’s company, only to have the applicable department dissolved, the contact person’s position phased out, or the business disbanded altogether.

A company’s place in the business landscape is no longer set in stone, and if nothing else the Monopoly game mentality of business in 1999 drove some key points home: 1) Don’t put all your efforts in one account; 2) Don’t rely solely on the sales of one company to keep your business going; and 3) For Godsakes always be nice to the person answering the phone – today’s receptionist could very well be tomorrow’s buyer.

Fast Isn’t Fast Enough

As your stress levels and chances for hypertension increase in direct proportion to the demands for warp-speed turnaround time, you can always blame it on one-hour dry cleaning, two-second Internet downloads and Dominos’ “If your pizza’s not there in 30 minutes, it’s free” curse.

Of course, everyone in our society has become accustomed to getting everything in an almost impossibly quick time

frame – the turnaround time bar has been raised so high it’s practically unreachable. Distributors report a widespread outbreak of procrastination among their clients, so much so that paying exorbitant rush charges and freight costs are not a deterrent.

And the suppliers, in this area more than any other, are often the unsung heroes, carrying the weight of delivering the goods – sometimes in only 24 hours – squarely on their shoulders. Three years ago, in 1997’s State of the Industry survey, responding suppliers reported that the average standard turnaround time was 13 days, with 20% of their orders requiring a turnaround of five days or less. Sam DiBiase, corporate vice president for Counselor Top 25 supplier Leeds (asi/66887), predicted at the time that in two years, 25% to 30% of orders would be tagged with a one-day turnaround.

While, mercifully, one-day turnaround isn’t yet the norm, DiBiase wasn’t far off. This year’s supplier respondents say that in 1999, nearly half (47%) of their orders required a turnaround of five days or less, with a whopping 29% cited turnaround in three days or less.

Many feel the answer to the eternal turnaround time question, “When is it just not possible?” won’t come any time soon. Rather, more likely they’ll be a revamping of turnaround expectations, which will factor in a mix of technological, art transfer and distribution tweaks.

The Big Business Of Show Business

Once again this year, one of the main topics over cocktails at industry functions was trade shows: Too many? Not enough? Too big? Too small? Does anyone really care? The answer to the last question would be a definitive “yes,” as everyone chimed in with an opinion on the state of the industry’s trade shows.

It would be safe to say that the suppliers are the ones feeling the heat on this topic. Structuring budgets and staff to accommodate an increasing number of shows was a challenge, to say the least. The sentiment among suppliers regarding trade shows seemed to be one of fear of being noticeable by their absence if they chose not to exhibit at a show – a “be there or be damned” quandary. Can they afford not to be there?

Obviously, distributors don’t feel the same sense of providing a mandatory presence, and are now easily accommodated with a show available pretty much wherever and whenever they want one. But the concern shared by both groups is a valid one yet to be answered: With so many shows – which, of course, require time out of the office, away from selling, etc. – when is business being conducted? For now, suppliers seem to be taking notes for future reference on which shows have served their needs well and which have fallen short.

Exciting Times Ahead

It seems like once this industry finally figured out how its processes and procedures were supposed to work, we were clocked with a curve ball called technology and now have to carve out new boundaries and redefine protocols. Which we will. If this year has shown us nothing else, it’s that this industry is resilient and succeeds phenomenally – sometimes in spite of itself.

One final interesting, wacky note: An oddly high number of responding suppliers – nearly 20% – reported adding sunglass clips to their product line. Now there’s one trend we couldn’t have predicted.

Michele Bell is senior editor and Matt Histand is an assistant editor of The Counselor.