Episode 207: A Glance Back at 2021, A Vision Ahead for 2022 (with Mark and Catherine Graham)

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

If 2020 was the year of fear, 2021 was the year of turbulence. Despite end-user skittishness, frozen budgets, continued lockdowns, supply chain problems, inflation, and the Great Resignation, many of you thrived. This industry's ability to overcome any challenge is astounding, and your optimism knows no bounds. If you weren't growing, you were rebuilding. 2021 also signaled a big shift in two other crucial ways. One was how the world saw the industry. The other was how we now see ourselves. There were more headlines in 2021 about the positive impact of branded merchandise than any year in memory. Consumers and clients flocked to create emotional connections with merch as headlines from major publications like Forbes, The Atlantic, Medium, and more highlighted a growing trend: the incredible impact of our medium. And astonishingly, the market changed how it referred to what we sell, no longer using the terms promotional products or swag, and less and less in the pejorative, but rather embracing the term branded merchandise, a phrase which commands higher respect and higher premiums. And our industry saw itself differently too. Hi friends, I'm Bobby LeHew, the Chief Content Officer at Commonsku. Those words I just read are from an annual open letter to the industry from Mark and Catherine Graham, co-founders of Commonsku. You can read the letter in its entirety at commonsku.com/2021recap. But today on the Skucast, Mark and Kathryn and I unpack that letter and look back at the changes in 2021 that transformed the way we work, the way we sell, and the way we live. And we look ahead at the trends reshaping our industry and the opportunities that await us. Before we get to that, I invite you to join us for SkuCon, the conference for innovators, explorers, and dreamers in the promotional products industry. SkuCon is held in Las Vegas on January 9th, and though the in-person event is sold out, SkuCon is also being broadcast virtually. So we encourage you to join us from the comfort of your home, your hotel room, wherever you are, to be inspired by folks like Davis Smith from Code of PAXI and also an incredible lineup: Aaron Draplin, Regina Renda, Brittany Roller, Candice Parker, Ben Adams, Jeremy Picker, Stephanie Leader, Sandy Gonzalez, and many more. We'll explore topics ranging from experiential marketing and inspirational merchandising to emotional intelligence, creating a strategy for epic growth, and many more. Virtual attendees will get exclusive interviews, even one-to-one networking. Plus, if you register for the virtual experience, you'll receive the official 2022 t-shirt, a shirt designed in collaboration with design legend Aaron Draplin. So hop on over to SkuCon.com to register your entire team today. This episode is brought to you by Common Skew, the work from anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more or to begin your free trial now, visit commonscue.com. Now here's our look back at 2021 and a look ahead at 2022.

Well, 2021 was a strange year. It really does seem like eons ago when we produced Kukan at home. And over the past 4 to 6 months, the momentum has really quickened in the business at an unbelievable velocity. When you look back at this year, Mark, what's your initial reflections?

I mean, this was the year of extreme turbulence. I mean, think about what it's like when you're 30,000 feet up in the air and it's smooth sailing, and then all of a sudden you hit an air pocket and the plane starts to lurch and you feel uncomfortable. That's what 2021 has been all about. I mean, you think about starting the year off, the first quarter was soft. People were concerned that budgets were not going to return, that customer confidence was not going to return, and that demand for our medium was not going to return. We obviously saw that the pace quicken quite a bit, and then we saw moments of brightness. Where our sunny skies— I will never forget the optimism of early July when I think it was ASI had reintroduced the big show in Chicago and how the industry came together in the summer. And it was like masks were off, people were hugging each other, and it was as though COVID was over. And there was incredible optimism. And then what was it, a week after we got back from Chicago, Delta. Emerged his scary head. And, and that's just a good example of this turbulent roller coaster year. Add to it the great resignation and how employees are now, at a rate that we've never really seen in the last decade or two, have been moving around and have been changing jobs, in some cases have been moving outside the industry. That's incredibly challenging if you're an employer looking to grow and scale your brand. So these are just some examples of some of the good news and bad news stories that we experienced in 2021. And as we record this at the end of December, heading into 2022, I think that there is incredible optimism. I mean, we by default are just optimistic people. We're seeing a lot of very positive trends, but there's also some of those headwinds, right? We've got a new variant that's out. We're just about to head into the PPAI Expo where there's enthusiasm, but there's question marks. And so I think that we're heading into 2022 probably stronger than ever, maybe more battle-tested than ever. I think more mature as an industry and as business people, because we've demonstrated over the last year, and I would say probably the last 2 years, how we have really grown up and how we have really embraced these challenges and have overcome them. So a weird year, and I'm very excited to see it behind us. And can't wait for 2022.

Catherine, how about you?

2021 was the biggest time warp, like mind-bending time warp. It honestly feels like it was like 5 years long in terms of what went on. I think that contributes to just that general sense of collective exhaustion that everyone was feeling in the fall. And when you layer on top of that, everything that was going on within the supply chain challenges, like it just was pile on after pile on after pile on. So I think everyone's excited to see the calendar turn this year and looking forward to 2022. Although I laugh because I think we said the exact same thing last year, like, all right, 2020, like, we are done with you, with no idea what it was that 2021 was going to bring.

But I feel we were like babes in the woods a year ago. Like, we all had this view that at the very end of 2020, that as soon as it was New Year's and it was January 1st, it would all be over. And of course, that was the biggest joke ever, because of course it was probably worse on January 1st than it was back in March or 2020. Yeah, but we've had 12 months of these challenges. And I think that if you're still in the industry, and believe me, there's a lot of us still in this industry, you've gone through a lot of hell. And I think that's really given you a lot of the tools and confidence to take on really any challenge at this point. So I think it's, I think it's been ultimately a good thing for the industry.

Yeah, it has hardwired the way we respond, for sure. Because I get back when COVID hit everybody, it was always like everything was in these 3 to 6 month intervals. In 3 months, this thing will be over. In 6 months, and we've been doing that for so long now, we've actually our inner core has adjusted to the way things will be volatile, and we just have to be ready for that volatility. 2020 and 2021 also signaled a big shift, I think, in two other ways. One was how the world saw the industry. I think we saw a massive change in how the world saw promotional products, branded merchandise. And the other was how we see ourselves. So how the world saw the industry— Mark, how did you see that change?

I think that we've seen the increasing consumerization of our industry, and it seems like almost every day I'd be receiving some new merchandise collection that was done by a high-profile brand, a high-profile either consumer brand or even in some cases a B2B brand that was taking their merchandise to the next level. They were incorporating the elements of surprise and the merch drop and design and e-commerce distribution. And that has happened at a rate in 2021 that we have never seen before. Probably one of the better examples is how Netflix really stepped up their merchandise game and how it is that with Netflix shows that we all know and love, how now they come with a really compelling merchandise component. And you talk about a way to extend emotional connection with a Netflix property or a show. Not only is there this incredible opportunity for Netflix to monetize at incredibly high margins when you look at the cost of what they're selling these things for, but you see, you see these products being sold out left, right, and center. As proud Canadians, of course, we all paid a lot of attention to the Tim Hortons and Justin Bieber collaboration and how the tote bags were being sold on eBay for $500 because they couldn't get their hands on them. And Tim Hortons, I mean, it's a, in my opinion, and maybe this is sacrilege coming from a Canadian, is a pretty kind of tired, dowdy brand. I'm going to get hate mail.

Stop being a coffee snob.

I'm going to get hate mail.

It's a much beloved brand by a lot of the population, to be clear.

I think it's tired and dowdy. Maybe just mass market, but yes, I'm going to get the hate mail. But the thing is, I wouldn't say Tim Hortons, or maybe I should. Tim Hortons is not a cool brand. They're not a cool brand. They're not a brand that necessarily would be seen associated with branded merchandise in the way that they did it, and how they aligned themselves with a pop culture music phenomenon, to me, is something that is so uniquely 2021. That wouldn't have happened another year. So I am fascinated by how merch has really elevated itself in the food chain in 2021. We talked about it in 2020, but it's reached new heights this year.

Yeah, I agree. In the States, Dunkin' did the same thing. Dunkin' has created this energetic, vibrant brand, and it's always kind of fascinating to me because coffee is a commodity that's been around for centuries and centuries, and It's cheap and available everywhere, and yet they've created this really special moment. Catherine, what did you see? How did the world view our industry different?

I think what was interesting to watch, which began, you know, in 2020 when everyone was stuck at home, was this amazing rise of gifting and what the power of kind of gratitude and recognition and gifting kind of did during that time when people were locked at home. And, you know, the excitement people felt at having, you know, kits sent to their home. And it felt as if there was potential that that was just a moment in time and it would pass. And once kind of people started going back to the office and going back to kind of the world, or back to more kind of normal life, that that wouldn't retain the same kind of power as it did then. And I think what's been interesting to see is that that's only accelerated. And I think the level has only increased as far as how it is people are approaching that as a really creative solution in how it is that they can get that brand loyalty and recognition and that sense of overall kind of gratitude and recognition. That those are just interesting indicators of, you know, it's elevating the medium.

Yeah. Yesterday we recorded with Jonathan Isaacson of Jim Line and Jeremy Lott of SanMar. Both of them, you could, you could argue that they are the representatives of both hard goods and apparel. Both of them made the same comment that the higher unit cost items and the higher price items are in high demand. And so it's interesting that when you match what's going on in the consumer market, and then you see what's going on for the demand for higher item, higher value items, higher perceived value items, it's a fascinating time. I think we'll look back at this moment when it comes to how the world views merchandise as a very pivotal moment in the history of the industry.

It's, it's a recognition of that underlying shift away from, you know, something that is given to be thrown away as a, you know, a cheap, cheap giveaway, um, versus, you know, what it is that can be accomplished when there is something kind of more meaningful given that people want to, want to keep and retain.

Yeah. Catherine, let's stick with you on this question and we'll jump to Mark. How did 2021 change how we see ourselves and our services?

There's no question that there was a shift for those that weren't already on the train around how it is that you be a solutions provider to your customers, that everyone was forced on that train in 2021, or 2020 rather, when things got upended. And I think that once a customer sees that change in their perception of what it is that you can do for them, that ability to continue that perception and to build upon that, I think was indicative of what happened in 2021. And you layer on top of that all the supply chain challenges and what it is that, you know, distributors have had to go through in terms of just delivering upon, you know, what it is that clients are looking for, that, that the perception on the part of the client of the distributor being a solution provider is only elevated, you know, within that. So I think continuing, you know, and going into 2022 to look at how can we build on that, to say, you know, not only are we incredible problem solvers, as you know, as demonstrated over the past 2 years, but Also, how can we be thinking kind of beyond, you know, this traditional box of what we view as being promotional products to look at being a solution provider much more broadly for clients within the physical expression of their brand and how it is that, that we are able to, you know, to work with them around creative ideas and to elevate that.

Yeah. Mark, how about you? How did 2021 change how we see ourselves?

I think to piggyback on what Catherine was saying is that This has been the year that distributors gain confidence in themselves. And I think when you as a distributor can see all around you, not only your campaigns, but the campaigns that other people are doing around you and how it is that they're driving value and that they're creating emotional connections between fans and brands, that makes you really proud about what it is that you do. And you're not showing up as the swag guy, as the person with the stress toys and your suitcase full of ideas, and you get these marketers who come in and say, oh yeah, okay, I want this or that. You're showing up as someone that can now demonstrate great value by bringing in all these different ideas and strategies. And I think our industry, we've talked, Bobby, you, me, and Catherine have talked about this for years, has this massive inferiority complex. And I think that the last 2 years I've seen that inferiority complex almost go away entirely. And how the great distributors of our industry now have a swagger and a confidence about them. And I think that we've learned that through all this hardship that we've had to deal with. If you're still around right now, you're around because you're a solutions provider. You're not around if you're just the person who is just doing the orders anymore or being the order taker that we would've seen in the go-go days of a few years ago.

That also stems from a greater appreciation on the part of the client of the complexity of this industry. And you look at, you know, what, especially this, this past, you know, 6 to 12 months of all the supply chain challenges, that, you know, this is not as simple as, you know, going onto a website and uploading your logo and checking out and off you go. Like, that's just all that kind of went out the window, you know, this year. So I think that, that that appreciation for, you know, the— whether it's sourcing capabilities, problem solving, you know, all of the, the things that have, that have been involved in navigating the complexity of the supply chain issues, that there's just a greater understanding on the part of the client of what it takes to get an order out the door.

Yeah, for sure. Well, Commenscue also celebrated some incredible milestones in 2021. Among them, we celebrated our 10-year anniversary, and we hardly— we talked about a little bit on social, but we didn't really talk about it in the sense we were so busy that we didn't get a chance to pause and just say what happened. Well, so CommonSKU hit $1 billion in gross merchandise volume. Uh, we featured a couple of new events. We had the product summits, sustainability and holidays. We welcomed people back to our first in-person event at SKU Camp, and our team just got back from last week gathering for the first time in 2 years at HQ, where we met some of the people that we've been talking to and working with and alongside for 2 years. So lots to chat about here. Catherine, what are your thoughts? We celebrated 10 years, this $1 billion mark. So much happened over the past year at such a velocity. What are your thoughts on that?

I think what, what to me is so funny about the, the kind of 10-year milestone is that to me it feels like we're just getting started. It's like, how has it already been 10 years? It feels as if the, you know, there's just, there's so much more that we're excited about and in terms of, you know, where we're going, you know, as a platform as a company, as an industry, that, you know, 10 years, just, it's hard to believe that it's been that long. So it's taking a moment to kind of reflect on that feels ironic, given that it feels like it's only, it's been a blink of an eye.

Right.

I'm sure. You know, I always love it. I consider it high praise when somebody considers a brand new in the market, and people still view CommsCue as new after 10 years. And I think that's a compliment. Mark, what are your thoughts? Turning 10?

I think sometimes we run the risk of having your heads down, working so hard that we don't lift our heads up and sort of scan the landscape and smell the roses, so to speak, and celebrate. And it was, it was really fun to be able to do that. Like Catherine said, it's, it's a little surreal to think that it's only been 10 years, and other times it feels like it's been 1,000 years. Yeah, but Catherine nailed it in that We have more enthusiasm and more excitement for what we're doing at Commonsku now than we did on our first day. And believe me, we had a lot of enthusiasm and excitement and maybe a healthy, uh, amount of naivete on that first day that we started 10 years ago. But now we just look at this great foundation that's been built, and we feel really honored to have had a lot of our visions validated by this incredible community of distributors that have supported us for so, so long. And I think for us, Commonsku was really founded around this vision around creating this, this exciting future of what the industry could be, creating a vision around running an amazing, efficient business that connected the entire supply chain and client, supplier, and distributor all into like one beautiful ecosystem. And the fact that we crossed a billion and have these fantastic customers that we get the chance to work with is validation that the model is working. And as people who came from this industry, that's really exciting because we love this industry and we love the fact that we are having a hand in helping create the future of this industry, which will benefit all of us.

Well, a couple of other things. We always kind of joke that within CommSkew, if we're not doing things that make us nervous, we're really not progressing. And so we did a few things last year on the event front that really made us nervous. And looking in hindsight, you know, it's hard to believe— Catherine, you said it to me— can you believe SkewCon at Home was last year? This year? Because it feels like it was 10 years ago. And then Product Summit Sustainability was, you know, that's a little bit of a risk doing a whole summit around the topic of sustainability, but something we all embraced and feel passionate about. Product Summit Holidays, and then getting into actually doing a first-person event. So leading up to that first-person event, Skew boot camp was a nail-biter, Mark, behind the scenes, and it led to all kinds of decision-making and stress. But then we get to the event, and what happened? What was your perspective on what happened?

Well, there was an incredible amount of anxiety leading up to that event, and the anxiety really came from— had nothing to do with the demand for the event. We were fortunate to have sold it out, but it had everything to do with people's health and safety. And to be frank, we've never had to worry about that in the past. I mean, obviously we're always committed to creating a safe environment, but never have we produced an event where there's a deadly global pandemic and tons of anxiety and uncertainty about it. And so talk about friction and headwinds. So we, we were nervous and anxious. That would be a real understatement. I remember even thinking a mere few days before the event going, why are we doing this? It would just be so much easier if we weren't doing this. And, and, and I'm happy to be transparent about that. It was a really challenging time, but we got there and everyone was vaccinated, everyone was super respectful. We did everything that we possibly could to create a safe environment where people could be confident in connecting and learning, and it went off beautifully. And certainly that was a result of the hard work of our team, but real kudos goes to the people who came and supported us and flew from all corners of North America and were absolute rock stars. And, uh, it was, it was a very, very special moment, and it made all of those, uh, you know, the hard work and the anxiety that went into it, it made it worth it. And I think it was a great example of how we can move forward as an industry, as a business, potentially even as a society when we're dealing with a challenging moment. Like, we, I think, all agree that we have to move forward, we have to get out of our houses, we have to do business again. But at the same time, it needs to be done with respect, it needs to be done safely, and it needs to be done without endangering other people. And so that is a real interesting needle to thread, but we're really glad that we had a shot at it and it worked.

What was so funny is, you know, we were so careful in all the communication going out of, you know, just respect that everyone's comfort levels are really different and some people might want to, you know, just bump elbows. And literally the first person that walked in registration comes and gives a giant hug. It's like, it's so good to see you.

Yeah, yeah, yeah.

Set the tone. It was just, it was so emotional seeing people in person after so long and just the energy that came out of that experience and just the sheer kind of joy was just— there was a high for a long time after that.

Yeah, yeah. Pandemic? What pandemic? It was a moment where everybody was so happy to see each other.

We're here for a pool party.

Exactly.

Shout out to Gord at Elite Promotional Advertising for being that, that first person. And I hadn't met Gord in person up until that point, but just like the, the greatest guy and a wonderful bear hug and just a smile from ear to ear.

And I was like, all right, Gord, well, maybe after 12, 12 hours of travel getting there. Yeah, yeah, yeah.

Oh my gosh. Maybe this is my own confirmation bias, but what a time of learning too. And we can move on after this, but I don't know that I've ever seen the depth of openness between suppliers and distributors and people sitting around those tables because we reformatted things where we spent more time together. And it was just a really interesting time. I think we really got deep in terms of connecting and working better together. And I think that's a good sign moving forward. At SKU Camp, 3 of the industry's leading supplier companies signal the upcoming year as a progressive turning point in supply chain problems. Katherine, what do you think we should be preparing for in 2022 in regards to supply chain?

I think, no doubt, continued turbulence. And it's— that's just a difficult message, I'm sure, for some to absorb, given it's just been such a challenging past number of months. There's no question things have improved a bit from what they were like in the fall, but there's still just crazy headwinds out there as far as the underlying issues and just seeing ongoing shutdowns going on within China with the stance they're taking on COVID zero and that all those things have ripple effects as far as, as how that impacts all of us. So I think just bracing ourselves for the fact that we're going to need to continue to manage customer expectations around that and that they're going to need to stay nimble in terms of their product selections and that also ensuring that we're leveraging all the tools at our fingertips from a technology perspective to be able to be super efficient with getting orders in and securing inventory and presenting options where inventory exists. And all the things that are, you know, available directly in the platform, that all those things are going to help, you know, navigate this next stretch.

Yeah.

Mark?

I was going to say, Katherine, one of your huge dreams and visions has been the concept of electronic purchase orders submission, as well as checking things like order status and inventory. And there's no question that supply chain problems and inventory problems are a real concern. And there'll be, I think, a ton of headwinds. But it's been so magical for us to see, particularly in 2021, how many orders are submitted electronically that go right into a supplier system, inventory is immediately secured, and then is immediately then put out onto the production floor, thus eliminating all of that, like, hang on, I submitted my purchase order, and the supplier said that stock was okay, but 2 days later I'm getting a call to say it was pulled or it's mysteriously gone missing. All those shenanigans are completely eliminated in an electronic purchase order environment. And it was so fascinating to see the growth and the success of that program, particularly in 2021. So I wanted to acknowledge, Catherine, all of the hard work that you've done on that front and bringing your vision to reality.

And that's only going to accelerate in 2022 as we have more suppliers coming on board, um, you know, as connected suppliers. And I think that's just critical for our industry and how it is that we're going to move forward.

Yeah, if 2021 was the year of the great resignation, 2022 will be the year of the great refresh. So top talent will become increasingly available. Those who see turnover as an opportunity to build stronger teams are really going to put themselves in a position to win. Now, we're seeing a dramatic uptick in license additions, another signal of how healthy the market is becoming. How can distributors prepare for the upcoming year in relation to the big quit, Catherine?

Really thinking about, you know, how do you become an employer of choice? And we had a fantastic session at SKU Camp with Claudia St. John on this topic with lots of great ideas around thinking more flexibly as far as the environment that you're creating and the kinds of benefits and incentives that you're offering employees that are really more tailored to the age and stage in life that they are at. And part of being a great employer is, you know, it's not just, you know, culture, it's not just environment, it's not just compensation. It's also, you know, how is it that you are providing the tools of enablement for your team to be successful in their jobs? Because ultimately, that's a huge part in terms of why it is that people want to stay with an organization, is if they feel as if they're being successful in their roles, they feel like there's opportunity, you know, to grow and learn. And so how, how can you provide, you know, that that environment as well from a, you know, tools and enablement perspective. And all those things ultimately, you know, are going to contribute to kind of winning back talent and how it is that we grow and build back within this industry in 2022.

Yeah, Mark?

I think what's important to note within this great resignation theme is that the insurance policy that has always has existed for you as an employer is that the stronger your brand is as an employer, the stronger your culture, the stronger the opportunities for advancement and growth are there. And these are not things that are new. These are timeless concepts is that employers that have always had those things going for them, they're not the ones that are suffering during the Great Resignation, maybe a little bit, at a far smaller rate than employers that have not necessarily invested in those things. And I, I don't mean to be critical because as a business owner, we absolutely understand there's competing priorities. It's expensive to do a lot of these things. It can take your eye off the sales ball. And so it's not a surprise that some employer brands end up suffering at the expense of sales growth. And I think that those are the folks that I think need to be aware and cautious as they move forward because top talent has, has the ability to move, and they're going to migrate to the very best employers in our space. And, uh, and I think we've seen that at a rate that we've never seen before.

So yeah, yeah, Claudia's been saying this for a few years about shifting our marketing to make sure we're putting enough energy behind marketing the type of company that you're coming to work for, for recruitment. And, and so we're so good at marketing toward clients and prospects, and we need to shift that to attracting top talent.

Well, hey Bobby, I'll throw this out here. So We've long talked about how marketing in our industry has always taken a backseat to sales. So this is an interesting observation, just something that's off the top of my head, that for the longest time we've been a sales-focused industry. As, uh, as we've beaten the drum, I know that certainly three of us have talked a lot about the importance of marketing, as well as many others in our industry have done so as well. It's almost like marketing towards clients has started to become more important in the last couple of years. And has taken maybe a more equal seat at the table with sales. But then, then you've got this concept of employer brand building and employer marketing and more of the internal side that has taken a backseat to client marketing and client sales. So it's almost like the third leg of the stool. And we were really fortunate to have Claudia St. John help us really remind us of the importance of that investment.

Well, and I think this goes into An action point would be literally creating a line item for this kind of thing. I know, Mark, one of the things that I always loved that you mentioned at SKU Camp was that if culture is important to us, shouldn't that be somewhat of a line item on our budget somewhere? Shouldn't we actually put money where our mouth is and do something about it? Same thing would be the case with marketing our business toward top talent. I think it's something we have to put a monetary value behind, because what a monetary value behind represents for a business is action. Real-time buyer enablement is a term from Forrester Research. That's not ours. It sounds like something we would have said. Real-time buyer enablement will become a reality as distributors and suppliers both will harness technology to speedily simplify complex B2B purchasing. That's their words. What is the signal in the market and how can we better prepare for that, Catherine?

When you look at, you know, how, you know, buyer expectations, like client expectations, change, particularly during 2020 and 2021 with, you know, the huge explosion of e-commerce and expectations around that, that the buyer really wants to be able to have, you know, an easy way of interacting, you know, all the way through from, you know, ideation through tracking the order through, you know, invoicing, and ultimately just their overall engagement and working with, with a distributor. And if you are not providing tools to them that make that easy, they are going to go elsewhere. There's just, there's a now kind of table stakes in terms of what it is that, that the buyer is expecting, you know, from a technology perspective. And all of that is, you know, readily available in this day and age of democratized software, where it's inexpensive to be able to get in, in the door to, you know, to offer a solution like that, that I think there's no longer an excuse around sending a PowerPoint presentation or a PDF and expecting your client to be referencing on, you know, slide 15, can you show me alternatives to these products and all the email, you know, back and forth and phone calls like that's just it's just difficult. And so how can you think about making things as easy as possible, you know, for your client with projects that you're working on, access to history of, you know, what's all the interactions that happen have happened in the past. You know, we launched client portals this year for exactly that reason of to be able to not only provide buyers, you know, the clients easy access to historical orders to reorder from, but, you know, one place where all current projects could be accessed, you know, easily. And also an opportunity for a space, you know, within that portal for distributors to be able to share ideas and merchandise ideas, you know, for their clients specific to their brand. And I think those kinds of things of where it is that you can be leveraging technology to make it easier for the client to self-serve, but in a way that is supported kind of by the value that the distributor is bringing, it's just going to be a baseline expectation going forward.

Yeah, yeah, team selling is driving that too. Whereas more and more, not just in our industry, I think especially in our industry, but in B2B in general, team selling has grown exponentially. The same thing as team buying. There are now more decision makers involved in more purchases than ever before, according to some of the studies. So the team selling aspect with real-time buyer enablement really means people need access to the same information all the time.

And sorry, it's how it is that you kind of manage communication around that. I mean, yeah, you look at how, you know, things have shifted away so much from email and whether that's whether it's the rise of Slack, whether it's the rise of all sorts of alternative forms of communication, that when you have multiple people at the client, multiple people within the distributor who are all kind of supporting that sales process, that being able to have an easy way to communicate all together is key.

I want to build upon what the two of you were mentioning by saying that we've got another element around how we can scale without geographic restrictions. And I think it's such an enormous opportunity for us to embrace the fact that we've got great technology, we've got a labor pool that is truly global. And so if you're a small distributor and you're looking to bring on an employee to help with production or customer service, it could be an employee or it could be a virtual assistant, they don't need to be in your home market. I mean, I remember, Catherine, when we were building RightSleeve, They had to be Toronto-based employees. They came into the office. We had to have the office overhead, and they had to come in, and it was quite traditional, but that was the only way that you did things. The concept of virtual 15, 20 years ago, even 10 years ago, was pretty radical. Now you could be a distributor in Toronto, or you could be in Oklahoma City, and you now can scale your employee base. And you can also scale your customers well outside of your own geography. And I think that that is something that has landed in our laps literally in the last 18 months. Yeah, because you're not visiting clients in the same way that you were before. So you could be in Oklahoma City and servicing a great account in Vancouver, British Columbia, because you've got the supply chain that could be local, you have a virtual or an employee that might be in another state or province. And you can do that all enabled with technology on the backend. And then the customer experience is beautiful as well. And it doesn't matter where you are, and you can build those relationships with digital tools. And I almost, I jokingly say, like, if I could start my distributorship now, as opposed to in 2000, I would trade places with modern Marc any day of the week. I agree. Even though there's a lot of headwinds, I would die to start my distributorship now.

Yeah, it's funny. It sounds like we're supposed to say that. That's true. I feel exactly the same way. So true. On the macro, there's a confluence of events happening that I've never seen. And we're often very optimistic about the future of the business, but I have never seen the positive things happening like I have all at one time. One of our good clients on CommonsQ reached out to me and said, hey, one of my top people, they're leaving to come to Oklahoma City. Can you give me the lowdown? I'm like, sure. Sent him some information. I'm like, typically you lose key talent, you lose a big part of your business, possibly. In this case, he's like, nope, gonna just plant a flag in Oklahoma City and do business there. So it's a really exciting time. Let's end on the discussion of one of our favorite topics, the discussion of the market versus the industry, because this topic might seem like semantics, but it has the potential to really widen our scope. Katherine, what's the difference between the market and the industry, and why does it matter how we view it?

So, air quotes, the industry, right, how it is that has been historically defined, uh, is, you know, essentially the box of promotional products. And I think that what we've seen, you know, over the past couple years is that when we think more broadly about the physical expression of brand, you know, how it is that we see brand, you know, out in the wild, you know, physically represented, that there are so many more opportunities of how we can look at that versus just the box of promotional products. And ultimately, that opens the door far more widely to the kinds of solutions that we can provide clients when they're looking at how it is that they can strengthen their brand, you know, with clients, with employees, you know, talent attraction, all those kinds of things that ultimately are needs that clients have, you know, in terms of brand expression. So if we think much more broadly and as the market in terms of how it is that we can be helping clients versus within the classic kind of box of promotional products, that, that can really open up the opportunity for how we can expand the industry.

Right. I also think the way the industry has been defined has been within a, justifiably so, a narrow scope of supplier-distributor model within the brand and merchandise sold there. And with our organizations at ASI and PPAI that do a wonderful job sampling or getting statistical data on the size of the industry, the scope of the industry. When you pan back a little bit and you look at the market, the market of branded merchandise— I mean, think of the Justin Bieber or Tim Hortons merchandise— doesn't typically fall in the scope of that, or it might. But for the most part, we've always sort of treated ourselves as B2B versus B2C, and those distinctions are now blurred.

I think that, that language distinction is so critical, is that people have historically put promotional products in, in the box of kind of free giveaways and merchandise in the box of things that you pay for. And there is no need for that distinction. Ultimately, it's all brand expression and exactly how it is that you, you think about the opportunity within that, that opposed to saying, oh, we can only play in the box of things that are given away for free, that ultimately, you know, how it is that you approach a client around looking at brand expression overall in that physical dimension, that I think is just— it's a reframing of language, it's a reframing of approach. And ultimately getting the client to reframe how they think about the distributor and the role they can play.

Yeah, and the merchandise we're seeing produced for folks like McDonald's, for the Fortnite merchandise, all of these things that are happening on the consumer level, the average distributor would take themselves off the table for something like that and say, well, that's that market, that's a different market than what we do, when it's not, not at all. In fact, we know we have friends in the business who are selling these projects and programs, and so my encouragement to everyone is to not think too small about what the market looks like, because it's vast and what's happening out there in the consumer is so exciting. Mark, thoughts?

This is a very general blanket statement, so I might need to be cautious in saying this, but I wonder if the industry almost lets us off the hook in terms of ROI and accountability for the products that we're producing and distributing. So what I mean by that, if you're a distributor and you're approached by Corporation ABC, Corporation ABC needs 1,000 widgets to be distributed at a trade show. I'm just giving a very generic and common example. That's a pretty classic transactional relationship. Distributor produces the merchandise, they may do it wonderfully, it may be well designed, but ultimately these products are just being given away and there's there's not a lot of intention behind that. And the relationship between the brand and the person who's receiving the product is, it's a pretty low-level relationship because it's just distributed for free. And that's considered a success. Did you give them away? Whereas the market, that's where I think you have a lot more accountability because products are being produced with great intention for the end recipient, or they're being produced literally for sale. So there's a big, big difference between me producing a widget and giving it to you, Bobby, away for free. And you're like, well, okay, I don't really have much of a connection with this product. I'm not going to use it. And as a result, you walk away with a poor view of that product or that brand. Whereas if I come to you and I create desire and I pull you in and I get you to spend $50 on my branded piece of merchandise, or I've designed something with intention that's going to move move you emotionally, that's a whole different relationship. And I think that that's what you get with the market. When I go back to one of my previous answers with Netflix merchandise, they're not handing that out for free. They're charging you good money and it's very high margin product. And they're creating this great demand. They're designing with intention. And it's a totally different relationship than that free widget that's being given away. So I think the industry almost gets away with distributing stuff and they do it efficiently, whereas the market is more about possibility, designing with intention, and a real hard-ass focus on ROI. And the industry gets a hall pass on that, I think, because they just have budgets that, oh, I need to spend $5,000 on something.

Well, that's ultimately, I think, the bar that everyone should be held to is that would somebody buy the merchandise that you are creating? And if they wouldn't, then why are you creating it?

Right. Right, products worth paying a premium for. That's what we've talked about. Last question: speak to a distributor or supplier friend and encourage them— if you had to encourage them to focus on one or two big improvements coming up in 2022, how would you encourage them?

Catherine, I have a huge bias towards technology on this front. Sure. As far as the whole notion of enablement and, you know, how it is that you should be enabling your teams. And one of the things that we always find interesting when we talk to prospects is we'll ask the question, you know, what is the— what is your budget item, line item for technology? And most distributors do not have a line item in their budget for technology. And to me, that is just not even an option kind of going forward in this day and age to be not thinking about that as a critical, critical piece of what should be, you know, within your P&L. And so looking at, you know, what are all those pieces ultimately that you can be doing to enable, you know, all aspects of running your business to be able, especially, you know, in this tight labor market where we have to be able to, you know, do more with less, that all the things that we can do to be able to, you know, help the client, to help with marketing, to help bring in, you know, opportunities to make that, that overall kind of sales process easier, to make working with suppliers easier, that all of those things are crucial with technology.

Yeah.

A couple of things that I would really encourage folks to do, the value, if the value for what we sell is higher than ever before, therefore our margins should meet or exceed that value as well. And that's one thing I think we should focus on more is looking at making sure that we value as much as the audience does what we sell ourselves. What I also mean by that is if the workload has gotten more complex, that means our operating costs have gone up. Typically, that means more energy toward these projects. So we have to make sure that we are reevaluating those services that we all got into suddenly, like kitting. And if some of you got into warehousing and fulfillment, we have to make sure we're charging for those services. I know it feels like I shouldn't have to say that, but I know I do because I I know there are so many people that aren't doing that. And then what happens is that the value of what we sell continually comes out of the unit price of that item only, and the market can't bear that. So your business can't bear that. So I would encourage to reevaluate pricing and to— what do we say? Margin is about confidence. What is that? A margin is an attitude.

Margin is an attitude.

So it's what we believe about what we sell that commands that margin. We know distributors who are doing amazing work out there with that. And the other thing, of course, I talked to a distributor yesterday, a large distributor who is reevaluating their compensation package. So going into 2022, the old models don't work as more. And so evaluating compensation— so I would say pricing, making sure we value what we sell, and reevaluating our compensation models going ahead, particularly to fit the team model as well.

Mark, final word. I love the word focus. I think focus is— it can come across as a little bit cliché, but I think that the very best distributors and very best suppliers in our industry are the ones that have got a maniacal focus on what their business is all about. So a distributor, it could be this incredibly firm opinion about the value that they can drive for their clients. And so it could be focused in a particular vertical, it could be a focus in a particular solution that you're solving, and being known as the top distributor agency that solves for that particular problem. 'Cause once you do that as a distributor, you build this incredible moat around your business and drive incredible equity and value appreciation in your business, as opposed to being the person who can get you anything. I know there's still a lot of distributors that are out there that do that, and I understand why that happens.

It's a crutch.

I think on the supplier side, focus is also incredibly important, and that means two things. I think you're either a supplier that is best in class in a particular product line and you go deep in that and your name is synonymous with product X, or you could be one of the larger suppliers that are in an industry that sells a wide range of products, could be soft goods and hard goods, and you to some extent are positioned as a bit of a one-stop shop, but your focus there is on the very best service or the very best pricing or the very best execution or the very best inventory. And I think a lot of the suppliers in our industry can sometimes fall prey to being unfocused because they try to be too many things to too many people. And I think the opportunity in 2021— focus on both sides. It makes a more efficient and a better industry.

10 years and we're just getting started.

Thank you, guys.

Thank you, Bobby.

Bring on 2022.

Thanks so much for tuning in to this episode of SKUcast.

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