Episode 250: The Critical Changes Creating Our Industry's Bold Future

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.

Hi friends, I'm Bobby LeHew, Common Skew's Chief Content Officer, and you are listening to the 250th episode of the Skewcast. And I just want to pause and thank you. We've received so many kind notes, emails, social mentions, and suggestions from you, the community, and we are grateful to you for your support and encouragement. What we are most profoundly grateful for is how many of you show up to our little podcast home here, whether as listeners or interviewees, willing and open to share your story, your struggles, and your lessons as you've grown, and for sharing these episodes with your colleagues. You inspire us. As we celebrate our 250th, I hope you'll permit me a moment to say thank you to our team, because the SkewCast is not a solo endeavor. I'm just the host, but it's a true team effort. It's edited by Ksenia Denisova, who labors patiently each week to edit, post, and share our SkewCast, and now has created our YouTube channel for the SkewCast as well, plus our social posts that you see on IG, Twitter, and elsewhere. Kate Macewicz and Mark Graham serve as creative directors and advisors, with Kate overseeing our design and editing team, including our extremely talented designer Lucia Kim. And Mark always sends me brilliant SKUcast ideas and great suggestions. He's the guiding spirit behind our endeavor here. With over 50,000 listens this year alone, we are humbled by the response. And I say this with no hyperbole, I sit in the best seat in our industry because I get to not only learn from each of you, but share in a small part of passing on your inspiration, encouragement, and stories to others. And I can think of no better way to celebrate our 250th episode than by inviting Commonsku co-founders Mark Graham and Catherine Graham on today's episode to talk about the major trends driving and shaping the future of our industry and the sometimes small-scale and quiet changes happening beneath the surface that will become seismic disruptors in the immediate future and over the next 2 to 3 years. Today's episode is brought to you by Commonsku. The work-from-anywhere platform that powers your connected workflow, enabling both distributors and suppliers to process more orders easily and dramatically grow your sales. To learn more, visit commonscue.com. Now here's my chat with Mark and Catherine Graham as we jump right into the major trends shaping the future of our industry. Of the 5 trends, we're going to start with trend number 1, the rise of merch. Now, in our careers, I don't know that I've ever seen or we've ever seen the popularity for branded merch as high as it is now. Julia Jenks, an outside expert senior analyst at Trends, wrote that gifting is the number 1 customer retention strategy, and she listed it as her number 1 future marketing trend, which included, among other things, direct mail marketing, the return of retro, NFT marketing, audio SEO, audio SEO, and more. So we know the pandemic had something to do with this, but also the collision of both consumers' demand for merch and for their desire to use it as a form of self-expression. So as a trend that will keep growing, how do we keep its popularity, popularity alive, Mark?

I think we need to be focused on purpose-driven selling when it comes to promotional marketing campaigns. And this is classic advice, but The most enduring and most popular and sustainable programs are the ones where the distributor is actively partnering with their end client to fully understand what problem they're trying to solve, fully understand which clients they're selling to and their hopes, dreams, and desires. So that way the products that are produced are ones that are actually going to be celebrated by the end recipient. And I think all too often When people get a bit excited in this industry, they tend to forget these things because they're rushing to put the order in. They're rushing to close that opportunity. And I think that taking that quarter step back, that half step back, and really considering what it is that this particular promotion is designed to accomplish, that right there will ensure that this will never get old.

So Mark, as we see this explosive demand accelerate, since she called it a future marketing trend and we have sort of been in this trend for our lifetimes, what's the potential negative side?

Well, as I mentioned, and this tends to happen in this industry, is that when things start to get really busy and demand is high, then the focus tends to shift away from creativity and strategic thinking and more towards literally fulfilling that demand. And taking that order. So what you start to see is, and, and I think we're starting to see it right now, is that kitting and fulfillment and dropshipping became massive during the pandemic because it was a way to engage people in their home offices and, and to reach out and provide a little bit of an emotional connection. But, and that was unique, whereas now everyone is doing kitting. And suppliers, certainly to their credit, but I think also this represents a little bit of a, a risk too, are starting to make things so easy that selling a kitted program, a lot of that friction, that creative friction has been taken away. And sometimes that's the thing that adds the magic for kitting. And when it's almost too easy to do, then almost everyone can do it and almost, and then it becomes maybe a little less exciting, maybe a little less impactful. And all of a sudden you're seeing everyone get a kit, and all of a sudden everyone's houses are stuffed with individual kits that are arriving, and the magic starts to wear off. So I think we need to be careful to not have this gold rush type mentality where everyone piles into a trend and then, and then it gets ruined. Yeah, so we have to always be thinking ahead.

Catherine, as we brace for more uncertainty regarding the economic climate, how do we not lose this momentum for merch as an effective medium with our clients?

I think it all comes down to being able to translate the product into what return it generates for the client and, you know, just basic ROI as far as how it is that you work with the client to articulate that, to ensure that when they're thinking about putting together, you know, a program or, you know, or simply a project, that they are understanding what success looks like in terms of a return on that project and trying to find some way of tracking that. So, you know, with a sales incentive as an example, when that's being sent out as gifting to try and, you know, land prospects, that becomes a very easy thing to track if they're doing that within, you know, their CRM. If you're using as an employee engagement, that those are, you know, retention, all those things are easy things to track. So, when you can understand that you can easily generate, you know, $2 on spending $1, like that becomes a no-brainer and it just, that it becomes far more recession-proof because you're not going to cut budget when you know you can generate a return.

The second trend that looks to shape the future of our industry is a phrase that we didn't come up with, although it sounds like something we might have called distributor enablement. And we've called it connected workflow for so long, but David Nicholson with PCNA coined this term to denote the current and future intense interest by suppliers to invest more in their infrastructure to enable distributors to spend more time selling, less time tracking, less time following up orders. David related this to a myriad of tools, but primarily technology. So Catherine, since we've been talking about this forever, I do feel like this is the new competitive advantage for suppliers, much like what we saw during the rush to create 24-hour shipping. Why are suppliers finally waking up to this as a priority?

I think because they're starting to see the, the impacts of how it's changing both the experience, you know, at the, at the very outset of, of an order from order entry and the accuracy around that, all the way through to making production far more streamlined because there isn't these stoppages in work because there's missing information and saving on massively on the customer service costs at the end or sorry, at the final stages of production as far as order status and ship notifications and all those things that require 7 to 8 manual touches when there's not technology involved. So, when you actually start to see these things impacting in volume within the business, it becomes a no-brainer around investing in it. And I think what will start to happen from an overall kind of momentum perspective is that as soon as a number of the, of suppliers are doing this and that becomes an expectation in terms of the interaction with a supplier during the order process, that similarly to the sure-ship phenomenon, it's like, oh well, they're doing it, I bet I got to get on board too. So I think that we're starting to see kind of that momentum happening right now, which is super exciting.

Yeah, in September PCNA turned on EPOs with CommonSKU, and within the first 30 days of going live they had nearly 50% of their orders, actually it was about 45 days, I think, of their orders submitted as EPOs. So this is a huge shift for productivity and profitability. So how will this impact both the distributor and supplier's profitability and peace of mind in the next probably 3 years, talking about future trends that will shape our industry? Katherine?

I think we're going to see an impact even sooner than 3 years. What's really, really interesting about this, and I'm not sure that the industry as a whole is really understanding the extent of the potential impact this has on both sides of the equation. For distributors, the speed to market in terms of being able to get ideas out or orders put together when you're dealing with a fully connected supplier that has complete integrations kind of into the platform is, it's exponential in terms of how quickly they can turn ideas around versus doing it in a more kind of traditional way. And similarly, on the efficiency, you know, end of the equation in terms of tracking production and how that impacts the client experience and the internal team, that all those things just have will have such an enormous impact on profitability as well. Similarly for the supplier, as far as, you know, all the statistics that we hear around, you know, 70% of orders are missing information and get held up at the order entry stage because of that. If you can eliminate those issues, you eliminate the issues downstream from an accounting perspective, you eliminate all of those manual touches, that hugely impacts the bottom line for the supplier, but also allows them to be able to potentially move resources around into different areas that can enable them to work, you know, more strategically with customers, with distributors around, you know, coming up with ideas, or spend more time on, you know, product development and innovation. And that all those things, you're— when you're fighting against kind of managing a bottom line, that everything that you can do to be able to increase that bottom line and profitability is hugely impactful.

Mark, do you think this will further consolidate supplier lines into like mega companies, or, or those who can invest in the infrastructure, or those who refuse to invest in the infrastructure? What do you think this is going to do to shape the future of the supplier market for our industry?

I don't know that it necessarily means that we're gonna see 5 to 8 mega suppliers and no one else will be around. I, I don't think that that'll happen. There's no question that a larger supplier has an advantage just by virtue of them investing more resources into technology infrastructure. Electronic purchase orders as an example is, is complicated. It's not an easy thing. It's not easy for either side, and it really requires a real focus on getting that done. That said, the good news for smaller suppliers is that, uh, implementing things like order status and ship notifications and inventory is relatively simple. And we're seeing a lot of smaller to midsize suppliers that are really jumping on that. Um, they're not necessarily going right to full electronic purchase order, but that's not the end of the world. And, and I think what we've really seen at Common Skew is that we have relationships and celebrate all aspects of the supply chain. And we need smaller to midsize suppliers in this industry to drive innovation and to drive the, the, the overall experience. And obviously larger suppliers are really important as well. They provide a, a different function and, and I think what is clear that if you're a supplier and you have no interest in getting involved in technology, then I think there's going to be rough days ahead for you. But certainly the ones that we've seen with all of the people that we interact with on Common Skew, small, mid-size, and large, there's a universal embrace of technology. And, and I think the playing field is quite level and quite democratized. It's just a, a desire to invest, and some people don't want to do that, but we're not necessarily working with those types of folks. So it's, it's maybe a little hard to comment.

Trend number 3. This is a huge trend that I've noticed probably only in the past 12 to 18 months, and I think it's definitely going to shape the future of our business, and that's distributor infrastructure and the changes we're seeing. One big change that sort of portends a huge future trend is that more and more distributors are investing in their infrastructure through, through different roles, but two primary roles. Whereas it used to be always about salespeople, salespeople, salespeople, we're seeing distributors now hiring production people and production managers and traffic coordinators and creative people. We're actually seeing— I've seen a few creative directors in distributor roles for the first time, as well as marketing folks. So the production managers now more than ever before, largely due to supply chain issues probably, but I'm also seeing more creative people. Why do you think we're seeing these changes, Katherine?

For production people, there's no question supply chain, you know, challenges play a role, but I think that what's driving that even more so is the understanding of the value of specialization of function. So, if you can take the management of production off the plates of salespeople and enable them to sell more, I think this is an element that the industry, you know, 10 years ago was very slow to adopt because all salespeople did everything. They wore every single hat and they did context switching constantly throughout their day of coming up with ideas in one minute and following up on tracking information or putting out a fire kind of in another minute. So, this notion of being able to have this specialization of function and be able to create so much more efficiency around that is something that's been, you know, more widely adopted. And technology has been key to that, right? Is that you have to have some way of being able to communicate information to enable a handoff that creates the confidence for the salesperson to be able to have someone in production manage an order for them going forward. And if there is that visibility around that handoff and what that person's doing in production, then that makes it all work totally seamlessly. As far as the creatives are concerned, I think that this speaks a lot to understanding sales enablement. This industry has traditionally been more of a prospecting-oriented industry, where salespeople are responsible for going out and hunting their own business and bringing that in and building their book of business. As buyer behavior has changed and there's a lot more buyer behavior happening on the web before they will speak to a salesperson, the importance of marketing and digital presence has become, you know, so much more elevated. And if there are ways to be able to bring leads into a salesperson and close a deal faster, then that, uh, that's amazing leverage that helps a distributor kind of grow more. So an understanding that, you know, marketing is not, you know, or creatives are not, you know, a cost center in terms of whether doing design or helping kind of with, you know, with, um, marketing and web presence, that that's viewed as leverage, I think is a shift in thinking.

That whole moving, you know, startup will start hire generalists, and as they grow, they will hire specialists. And Mark, as our resident marketing expert, how do you see these creative roles? I mean, typically a traditional distributor, when you hire salespeople, you grow sales. But now we're seeing this shift in hiring creative and marketing people to grow sales. How do you think this is going to impact sales in the future for distributors who are making these kinds of investments, not in a cost center, but in a proactive sales strategy related to creative and marketing?

So these investments are so critical for distributors because I've, I feel that this is the product that the distributor is selling. So a class— this is a very simplistic example, but a very classic distributor that simply sells out of a catalog and sells suppliers' products, they don't really have any real product other than their sales and sourcing know-how. If you're bringing in creative talent and that's native to your company, that becomes the product that you're selling that no one else can copy. Other distributors can certainly sell an Alpha product, they can sell a SanMar product just like you can. That's the commodity. But by distributors bringing in these, these additional factors within their business, these are things that are unique to them. And I think you're seeing smaller to mid-sized distributors that look better than a lot of the bigger distributors in our industry. And that's because they're bringing creative people in their websites, their go-to-market, how they're showing up in the marketplace and in front of their customers is first class. And that's a differentiator that you're seeing now that I don't think we necessarily saw, say, 5, 10 years ago. And then these are the things that, A, differentiate your distributorship, but then And with, with the increase in sales, these things easily pay for themselves.

Another subset of change that's affecting distributors' infrastructure big time in our industry is offshoring. And not just offshoring, even creative talent, admin talent. But check out this growth. Craig Dunlap's company DelegateCX has grown from January 2021 with 17 billable employees to now November 2022, over 1,000 billable employees. That's massive growth. Of his 320 promo customers, roughly 310 are distributors and 10 are suppliers. Now, we're obviously seeing the adoption of overseas employees skyrocket, and the model's being adopted by both large distributors and small. And the impact can't be overstated between the technology efficiency, offshoring admin tasks. We're setting ourselves up for more bandwidth to sell and consult with clients. Catherine, I know you were there in the beginning and talked with Craig, and I know he's just a picture of kind of what's happening as we shift our businesses to more proactive of selling. What are your thoughts on this as you see these big changes happening with role changes, offshoring, and technology integration?

It's been amazing to watch the growth of their business. It's fantastic. I think what has historically been the method around offshoring has been taking highly manual or low-value tasks and having those be done offshore. And typically, you saw this originally with suppliers adopting those kind of resources for order entry or, you know, accounting elements. And the interesting thing in terms of what DCX has done is recognizing that there is incredible talent offshore in all sorts of other areas as well. So being able to create presentations as an example, or, you know, insert that capability and capacity into all sorts of other areas within the order flow, as opposed to just looking at more of kind of the manual backend tasks. I think that's been the real differentiator and why the growth has been so explosive because it has enabled specialization of function to happen at a much earlier stage for a distributor potentially than they might look at otherwise. Because you're looking at bringing on, you know, a full-time employee and you might say, I can't bring on a full-time employee in an account coordinator capacity to put, you know, just presentations together for me because doing that in the US is so expensive. Whereas if you're able to do that in a way that is far more cost-effective and be able to get that extra capacity into your business, you can bring that on sooner and this also Goes to, you know, what we were talking about previously about the rise in people doing production. That again, kind of, you may not be able to think you can justify making that investment, but it's always chicken and egg that ultimately, you know, as soon as you bring on that additional capacity and that frees you up to sell more, that additional capacity quickly becomes kind of filled, but it feels less risky to do it in a way where it is more cost effective in the offshoring model versus doing it in the US.

Mark, any thoughts you want to add to that?

I, I also love how this has empowered small distributors to add additional, uh, capacity in a way that they might not have been able to do before. I think that what we're seeing right now is with software tools like Common Skew and with, with, uh, DelegateCX, among many other things, these are resources that are available to a small to mid-sized distributor to grow quite quickly at a very cost-effective rate. And you know what, uh, my answer is garbage here. You know, why don't we just end with Catherine?

We'll move on the next one. Yeah, that's cool.

That's cool.

Um, all right.

I was saying Catherine already said what I was about to say.

That's cool. All right. Next and final trend, state of the economy and the impact on our industry. Now, the GDP rose 2.9% in Q3. Better than expected. And weirdly, Black Friday online shopping hit an all-time high, and even in-person retail visits increased a smidge according to Adobe Analytics. Now, many are reporting a slowdown, and many signs are still pointing to a slowdown. And Catherine, you, you might hate it when I say this, I always say this about you, but you do study the economy more than most, I know. So what do you make of the state of where we're at now and what you think should be our response in the foreseeable future, given this one thing we know we can count on— uncertainty.

Ironically, the GDP growth rate and the Black Friday, you know, shopping are exactly the opposite of the indicators that we want to be seeing right now, you know, this inflationary environment where the Fed is trying so hard to kind of push demand down, um, and we're just seeing demand accelerate, which continues to push inflation. And that's, um, that would then create kind of the potential for the Fed to hammer down even harder and push things into a recession versus trying to do this dance of trying to do a soft landing. I think it continues to be the most kind of confounding macroeconomic factors you can possibly imagine because you still have this incredibly tight labor market and just nothing seeming to slow kind of on that demand front as indicated by the stats that you just gave. So I think that the, you know, all we can plan for is essentially kind of what we have control over. And if you look at the ability— I mean, distributors in this industry have such an incredible ability to be flexible and nimble and pivot, you know, when there are times of uncertainty. And so really leaning into, you know, where the pockets of demand are continuing, you know, if there's a lot of layoffs happening, you know, in tech as an example, that, and, you know, maybe HR is not going to be your best buyer in, you know, in 2023, that, you know, sales might be, you know, under a lot more pressure to be delivering. So they need more help and you can go in and, you know, be discussing interesting ideas with them. So it's really kind of looking at, you know, your customer base, not only from an industry and sector perspective, but also from that individual department and buyer perspective and think about, you know, who you can really be zeroing in on, that, that maybe may have interesting opportunities kind of coming even in a recessionary environment.

Yeah, you may have just answered this, but I saw this quote from a former F1 driver and it fits so well for our industry because we're so flexible in that we can call on somebody different kinds of businesses. You cannot overtake 15 cars when it's sunny, but you can when it's raining. So how, how do we be cautiously bullish about the economy?

I mean, we, we remain an industry that is, is fascinatingly resilient. I mean, you look at COVID as the most interesting example of this, that, you know, for a medium that happens, you know, in completely in-person, and when you eliminate all in-person opportunities, and yet the industry is, you know, after an initial like, oh, we're going off the cliff, you know, in March 2020, 2020, that it just figured it out into going into different pockets and whether it's PPE or all the different ways. And I think that that will be exactly the case this time around, that those that can be strategic and thoughtful around what those opportunities are in terms of being able to drive more nimbly in rain, to take that, you know, the F1 analogy, and know kind of the smarter path to get there and spend time kind of with their clients understanding kind of what is really going on in their business and therefore kind of where the opportunities are to work with them, you know, in partnership, that those are the ones that will be successful. Those that continue to just try and, you know, be order takers or to push the same, you know, products or, or, you know, ideas that they've, they've always done that are, you know, doing the peanut butter approach is that I think those are the ones that are going to have a tougher time.

Yeah. Mark, Forbes recently published an article and I was really surprised, pleasantly surprised to discover They detailed which industries you should invest in. You'll see a lot of articles about this right now. Um, but when you compare the list of those who thrive in a recession and then you compare PPAI's list of top promo buyers, 7 out of 10 of the industries are actually on these lists. So I think that bodes well if we get our thinking right. I mean, because our industry sort of, it's, it's so wonderfully connected on one hand, and yet sometimes that echo chamber can be disastrous for us because one distributor's book of business is different than another distributor's book of business because they call on different clientele in different industries. So Mark, how would you encourage distributors to look ahead at the year ahead?

So Catherine, I think, nailed it in, in saying that we're in such an incredibly resilient industry. Um, but we're also, we're, we're also an industry that produces products that people genuinely love. And I think it's such a gift to, no pun intended, to be in this industry because there are so many different types of products, so many different types of media. That you can put your client into. So when, when a client's budgets are, are, are cut, the ability to move an end client into a less expensive product— not a lot of other advertising professions or advertising media have the ability to do that. So, so that, that is something that I would keep in mind. I think the other part of it is that switching across different product media is something that our industry does so incredibly well. And I think the reality is, is that end clients love promotional products. There is an emotional connection to receiving what it is that we do. It's clear that there's unique value that's driven from this. Yes, we have to avoid trinkets and trash, of course, and but the, the trinkets and trash approach is just a totally different, uh, uh, different part of the discussion. We've already talked about that in previous episodes. But I think for the distributor that truly understands the product that resonates with their end client, they're going to do just fine in a recession. The ones that put their head in the sand and, um, run away with their tail between their legs at the first sign of rejection aren't the ones that are thinking terribly strategically about this. But we know the ones that are the most successful are the ones that have always done so.

All right, let's, let's wrap up this conversation with a sort of a— I'm going to put you in the hot seat because we're going to try an imagination exercise and do this with a lightning round of questions that we have to answer quickly. And since you both have a very unique perspective talking to suppliers and distributors, and you have for years, and you were a distributor for those maybe that are new to the SkewCast, you were a distributor at one time, I want you to look forward just to the next 3 years, not past that, but I have a series of questions here that I want to ask you each. And I want to ask, how are things going to be different? How are suppliers going to be different in 3 years?

Catherine? I think what's, what's so interesting to see right now, as I mentioned, you know, previously, but the momentum that's going on in terms of adoption, you know, of technology and more strategic technology within the, within the supplier environment. Um, taking, you know, promo standards as an example, that we've never seen kind of the kind of momentum that we're seeing now in terms of adoption of of the more difficult services to implement, like, you know, product pricing configuration and the electronic purchase orders. And that's really exciting to see that because those kinds of initiatives are going to be, you know, the absolutely critical element to how it is that, you know, we as a supply chain, you know, become more efficient and be able to spend more time on selling and adding value versus the manual pieces. And we've been very, very behind as an industry for so many years. With so many kicks at the can of trying to, you know, trying to crack this nut with many initiatives kind of that have, um, that have been attempted over the years. And we're finally at, you know, a totally different inflection point in terms of the, the adoption around this. So I think that a lot of the things that have bogged us down, you know, as an industry historically, that have made things, you know, very manual or very time-consuming or very frustrating, frankly, in that distributor-supplier relationship, um, will be eliminated, you know, through, through that improvement in the— through the integration through the improvement in communication and the adoption of technology. And I think that's going to fundamentally change suppliers over the next couple years.

Yeah. Mark, how are distributors going to function and look different 3 years from now?

I think distributors look great right now, and I think they're going to look even better in 3 years. And what I mean by that, in terms of the operative word being look, is how they present themselves to the market, uh, how they show up with their branding, how they show up with their websites and all of their collateral, that is either online or offline, we're going to see that continuing to get better. The number of impressive companies today far outstrips what we saw even, say, 2-3 years ago. Yeah, distributors that are entering the market today by default look great. And I think you're seeing the legacy distributors, the ones that have been in market for some time, they're, they're they're investing in their brands, they're investing in their go-to-market, they're investing in these other non-sales roles to really round out how it is that they show up. And I think that that is great for the market, and that trend will continue to improve in my opinion.

Catherine, are we going to see more consolidation on both sides, largely suppliers and distributors? You just see that focus mostly on the supplier side.

What do you think? There's been a lot of private equity activity within the industry. The focus so far has been, you know, very strongly on the supplier side because there seems to be a lot more opportunity there where you have a lot of duplication of products that are happening kind of across many suppliers. And so having seen some consolidation, you know, in that side might make sense around, you know, where there is duplication. I think on the distributor side, what remains very surprising is that although you see, you know, consolidation happening, that a lot of that seems to happen more at the stage of people exiting their business, you know, wanting at that retirement age where you're going to see kind of that natural attrition happen anyway. And there there continues to be such a shocking number of businesses, you know, starting up in this industry. And I think that is a testament to how exciting and vibrant an industry it is that is continuing to attract kind of younger people who are joining and creating new businesses. For— so for any of the consolidation that may be happening kind of on one end of this, on the— in the distributor landscape, there seems to be an equal number of new companies entering.

Yeah. Mark, e-commerce market share, is that going to dramatically increase or marginally increase?

I think marginally increase, and not that I'm bearish on e-commerce. I think that you're seeing a huge interest in e-commerce, and the tools have been democratized so that you not only have the bigger distributors that have historically been the leaders in e-commerce, you're seeing that being pushed down right to the smallest distributors that are able to go and show up with their e-commerce platforms for their end client. I think the reason I say it's marginal is that that, I still think that there will always be room and a lot of room for that consultative sell, that person-to-person sell where it's creative, it's strategic, and is not necessarily powered by a website. So I think in the earlier days, Bobby, people like you and I might have looked at e-commerce as transactional, um, non-human, uh, cheap products that just get transacted without any real thought. I don't think our thinking is around that or is, is, is that way at all when it comes to e-commerce today. I think there's a lot of very creative programs that are executed flawlessly through e-commerce, and a lot of that has to do with design and technology that's available now. But I still think, like, I just don't see that our industry is ever going to be majority e-commerce where that salesperson, that strategic and creative salesperson services go away. I think it'll cap out at some point, maybe 35 to 65 is what I, what I see. So I, I still see growth, but I don't see it being like 90% in the next 3 years, and I don't think I'll ever see that.

I think what surprised us all is the dark horse in e-commerce has actually been boutique stores, stores even for the largest of companies. That's actually been the surprise. So we look at traditional e-commerce, what's really grown is just the whole shop experience, not just because we sell shops, but because it's become very, very apparent parent, that that's what's going on.

And, and, and I think you say that very well, Bobby. And, and, and I think to underscore that, what, what we're talking about here is that these boutique e-commerce experiences are an extension of that in-person strategic creative sell. It's the extension of that salesperson as opposed to replacing them. And I think that's maybe a better way of underscoring that, is that salesperson's going nowhere, but that salesperson definitely needs the e-commerce extension to to power their business even, even more as opposed to replacing them.

Yeah, that's how it is, that you make the buyer experience, you know, better and easier versus putting the onus on the buyer to find their own solutions. That is the key difference.

Yeah, yeah. Last question, Catherine, we'll give it to you, and this is going to sound like a self-serving question, but let me note that if we were in any other industry, this would be the number one topic on everybody's plate, especially heading into possibly tougher economic times because we lean on technology. The tech landscape for distributors and suppliers. We've kind of covered this mostly from a supplier perspective, but what do you think this looks like from the distributor perspective?

I think the— we're at such an interesting time in terms of, of, of the technology kind of landscape and adoption, in that with this incredible democratization of software that has happened with software as a service over the past 5 to 10 years, that it has never been easier and simpler to implement solutions and to be able to have those contribute to being able to run a business, you know, more efficiently, or to be able to leverage kind of, you know, time and automate things or, or create more, you know, sophisticated marketing programs using something as inexpensive as MailChimp and, you know, connecting that into Commonsku and creating super targeted campaigns. Like none of those things, you know, were possible kind of before the advent, you know, of software as a service and the, and the accessibility around that. But ironically, the flip side of that is that that creates the potential to have a far more complex tech stack and, you know, so many different things happening in so many different areas because it is so easy to implement new solutions. So I think that's something that, you know, distributors really need to be cautious of, you know, in the coming years is how to create a tech stack that works for them and that ultimately is really solutions-driven and in a way that is going to support support both their customers in the best way and their teams in the best way. And obviously, you know, having solutions that talk to each other, you know, is a key part of that. That's been a huge investment area for us, you know, at Commonsku of creating integrations to be able to create that seamless tech stack. And I think that that is, you know, an area that will continue to be really important. So, it's finding this balance between not just implementing new solutions because they are easy, but ensuring that they are actually serving, you know, the focus of your business and, and ultimately where it is that you're looking to grow.

Yeah. To close, I want to add one thing is this is our 250th episode, and I want to remind you a couple years ago we were pulling— we were talking, Catherine, you were big on this— we were talking about market share, and we were talking about the, the, the percentage of spend in the merchandise, the branded merchandise medium, and how much opportunity we had out there to go pull spend for underperforming categories from others. And it happened Actually, the pandemic, oddly enough, forced this interesting hand with a lot of our corporate buyers where they shifted to the personal touch of branded merchandise as a medium. So as we head into uncertain economic times, I don't mean bad, I just mean uncertain. I think that's something we just need to keep in mind is that we have won some incredible percentage of that kind of land, so to speak, or we've we've won that buyer over in terms of what the medium can do. And I just don't want us to forget it, forget it, because I think we're heading into a very incredible time. If we're heading into tough times, it's still an incredible time to be a distributor.

It's what's interesting is that you, you look at if people are concerned about, uh, you know, budget pressures and that they're, you know, their client might be spending less in certain areas, you know, going into recessionary times than they were before, it doesn't mean that there is still not opportunity within that client because there is other budget elsewhere. Yeah, that ability to go in and tell the story around the return on, you know, what it is that promotional products can do or the impact that it can have, that, you know, all of that, um, there still remains more opportunity than ever to be looking at, you know, additional budget line items and the ability to take from those and pull that into merchandise. So that, that remains remains, you know, super exciting. You know, even if we do, even if we are going into, you know, more challenging or uncertain times, there's still that enormous, enormous opportunity to grow the pie.

Yeah.

Mark, last word. I think, I think one point that I want to make is, and, and this is a big shout out to the supply suppliers in our industry, is that products continue to get better and products, product quality has never been better in 2022 as we record this. And I think we all started in the industry, you know, better part of 20 years ago. Think about what product quality was like 20 years ago. Um, sure, it was fine, but, but now, compared to now, it's, it's exponentially better. It's exponentially different. It's exponentially more varied. And armed with that, you think about distributors. Like, what, what a— what an enormous, um, advantage to have as a distributor salesperson, distributor that's showing up to the marketplace with your end client with this quality merchandise Um, we'd be in a whole lot of trouble if promotional products were really crappy and everyone would— and if people were saying like, remember 10 years ago, things were so much better. This hooded sweatshirt 10 years ago wouldn't have fallen apart like it, or like it is now. People don't say that. And, and, and that's a tremendous advantage for us to really take advantage of. And that's a huge shout out to suppliers that have made investments in product merchandising and sustainability and overall quality and product differentiation. Bobby, we often laugh and say that, um, imagine being a distributor today. Like, it would be so— fun is maybe not the right word, but there would be so much opportunity to be a distributor today, you know, given that we had our distributor businesses, you know, several years ago, and it was great back then. Think about the opportunities today, and it just gets me so excited just speaking about it, even coming into economic uncertainty.

I think it also speaks to the— what we were mentioning earlier around the investments that suppliers have made, that they have created an environment that has enabled amazing brands to come into this industry.

Yeah.

You think about, you know, using like TenTree as an example that, uh, you know, that PCNA brought on board, that if you were to try and buy from TenTree directly and, you know, manage that relationship and have to open an account and deal with kind of— it was just so so hard previously to be able to bring like super interesting, amazing brands, uh, you know, as an offering to your client. And the fact that suppliers are doing that and pulling, you know, those brands into an infrastructure that makes it so easy to do business, that ultimately that is a win. And I think we'll see more of that.

Well, and those brands wouldn't, wouldn't be coming to the industry in the first place if they saw it as a terrible channel, or if, if they if they didn't see demand from a corporate customer for their product. They're seeing that demand. That's the reason they're going to Gemline and PC&A and Hirsch and these other great suppliers that are, are providing this, um, this efficient access to the market. Um, it— 15, 20 years ago, you wouldn't have seen any of these brands because they would have seen the promotional channel as cheap and trashy and as trinkety, right? They don't see it that way. And, and they're, they're putting their huge brand reputations on the line by investing in the industry. And, and we see the numbers— brands are, are doing incredibly well, and that's why they're growing in this segment. That says a lot. And that's, as I say, that's a huge advantage for us as on the distributor side to be able to go and sell that story to end clients.

So I know that we are both, you know, incurable optimists But we remain bullish.

Hey, Catherine, I think the reason for that— and Bobby, you know, you've been around, you know, even longer than we have. Think about when we started in the industry. Okay. And I think this is the final point.

Okay.

So let's, let's say from 2000.

Okay.

Because that's an easy number. Look at the size of the industry in 2000 compared to where it is right now. And sure, were there little blips along the way? Absolutely. But look at that trend line, right? This is an industry that has consistently grown, and I wouldn't want to be back in 2000 with where things were at then. Look at where we're at. And I think that that's what you just need to keep in mind. I mean, we're all in this industry for the long term, right? It's like, who cares about the next year or two? I mean, sure, we have to be mindful of that, but we're looking out to 2035, 2040, right? Let's, let's, let's get going here.

Yeah. Yeah. And speaking of the industry-reported numbers, we talk about this a lot, $24, $20-something billion, but corporate gifting is actually speculated to hit $350 billion in the next year. That's crazy. So what an opportunity. I can think of no better way to celebrate our 250th episode than to talk about the vibrant future of our industry. So thank you to our friends and community. Thank you for listening. Thank you for supporting us here on the SkewCast.. And thank you, Mark and Catherine.

Talk to you soon.

Thank you, Bobby. If you enjoyed this episode and want to hear more about trends and the future of our industry, join us for SKUCon Virtual held on Thursday, January 19th. SKUCon Virtual is a deep impact event built for teams in that it allows high-level learning in a concentrated window of time. You'll hear Michael Bungay Stanier talk about the 5 Question Leader, Nick Sisaris talk about the future world of Web3 and NFTs, and interviews and stories from the industry's most maverick thinkers. Hop on over to skucon.com/virtual to register today. That's skucon.com/virtual. Also, we've launched a brand new newsletter called The Backpack. It's a monthly newsletter featuring trends in merch, top articles and podcast episodes, and global news impacting merch life. It's a roundup of our best content that we email to you in a digest form on the first Friday of each month. You can subscribe at info.comandsku.com/thebackpack or or just Google Comet Skew Backpack.

Until next time, my friends. Thanks so much for tuning into this episode of SkewCast. Be sure to keep up with our latest content by subscribing to SkewCast on iTunes, or to our blog at community.commskew.com. Until next time, friends, thanks so much for listening.