How to Beat Tariffs and Strike Promo Product Gold

This episode of The Whole Idea podcast explores emerging opportunities and new challenges in the fast-moving sectors of promotional products and branded merchandise. Host Greg Oberst and guest Justin Glunz, director of business development at DCG ONE, offer important tips on how to mitigate rising costs due to potential import tariffs. Greg and Justin also discuss how the latest trends in strategy, sustainability, creativity, and digital integration can take promo product programs to new heights.  

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Transcript

How to Beat Tariffs and Strike Promo Product Gold 

Greg: 

Buckle up. We're taking another ride through a fast-moving sector of marketing, and there's plenty new to see, including an elephant in the room. 

Hello everyone, and welcome to the Whole Idea podcast by DCG ONE. I'm Greg Oberst. Joining me is Justin Glunz, director of business development and a promotional products and branded merchandise expert at DCG ONE. Welcome Justin. 

Justin: 

Thank you, Greg. 

Greg: 

Now you're just back from the PPAI, the promotional Products Association International Expo. Did I get that right? 

Justin:  

Nailed it. 

Greg:  

In Vegas, this is one of the premier annual events nationally for this sector, right? 

Justin: 

It is. It's the largest industry event of the year. We have a unique opportunity to be in the same room as over 1000 product suppliers who are all there to exhibit to us as what we in the industry call distributors. 

Over 10,000 distributors show up to this show, all to see new products, how the industry is evolving, get up and close with thousands of new items that we've never seen before, gauge trends and needs across the industry, and also just to speak with our peers about the state of their businesses. 

Greg:  

Well, I can imagine that some of the breaking news of late about tariffs, especially amped up some of the buzz at the conference. What's the feeling about the impact of tariffs? 

Justin:  

There was a lot of chatter, but at the same time, even as we're now having this conversation, there's still a lot of unknown about even potential impacts or real impacts. And I think we're all aware that when a tariff is introduced, prices go up. However, this is also a unique industry because it's a global industry. We're not talking about products coming from one country. We're talking about products coming from across the entire globe. So that actually presents a lot of opportunities to mitigate challenges like tariffs. 

So proactivity is the name of the game. If we can start having conversations now before impacts become truly real, we're a step ahead of many others. And what I mean by that is, a lot of products that let's say originate in one country are already being warehoused in the US. That product is not subject to a tariff. We can source that product. 

Now I've also learned as a result of attending this trade show and in the weeks since there are a number of product suppliers that have pledged to absorb any costs associated with a new tariff. We'd love to work with them. Maybe more importantly though, over the last 3 years, there are now twice as many products available to us that are made in the US. 

Greg:  

Oh, OK. 

Justin: 

So we have a large domestic source for product that we've had before but has certainly grown over the last three years, largely in response to client requests for more product that is US made. That's an interesting point, and I think that a lot of it comes down to the planning around that product but really stepping back to the beginning of the conversation around the product. Determining how it's going to be used and then making an assessment of whether it makes sense to be giving away the product in bulk just for the sake of marketing or whether there's a greater intent with that product for utility and for what we call stickiness or staying power, something that will be kept by the recipient for a really long time. 

And being a little more targeted around who that recipient is from a demographic standpoint, from a client attribute standpoint, from a new business acquisition standpoint, what is the ultimate purpose of that product? If we know that the buying can be done a lot more intelligently. And we could be looking at things like purchasing in bulk for a larger campaign or for a longer runway. 

We can also be looking at just the more intelligent use of budget so that it's not going towards a bunch of giveaway products that might have a tariff associated with it and is instead being used on product that has a lot more intention behind the use. 

Greg: 

So what I'm hearing is the need for strategy or more strategy. 

Justin:  

That's right. And I think for a long time, maybe even still to this day, there has been an attitude in this industry that you just need something to give away. It's an expectation. But if there is just a little bit of thought and strategy put into why that product is being used, who it is going to, and what the ultimate purpose is, there not only can be a greater return on that investment, but we can also mitigate some of the issues like we're talking about right now with tariffs. 

Greg: 

So don't panic. Okay, what are some of the other trends that you were hearing about tariffs aside with regard to branded merchandise these days. 

Justin:  

Yeah, there were a number of really interesting learnings and trends that came out of that show as well as subsequent conversations. I think a big one is that we're starting to see what were once really niche products and product suppliers becoming more mainstream. And a lot of those artisan goods, handmade products, whether it's wood carving or leather work, glass artisans. Products like that has always existed in the marketplace, but rarely has it been available for us in the branded merchandise or promotional product space to have access to client branding. 

Greg:  

Not a historically artistic line of merchandise. 

Justin:  

Typically not, but that response is largely again being driven by what our clients are asking for. Some of that stems from just the desire to have something new. But a lot of it is getting back to this idea of intentionality and of strategy. How are we maximizing the budget that we have for this purpose? 

And again, a lot of it is, we need a better, a more well-constructed, higher perceived value good. It's not just the commoditized item that we once thought you had to have just to give away. 

Greg:  

People want something different. 

Justin:  
Brands, they want to be able to stand out. It's more attractive if it's unique in some way. 

And that's a great point, Greg. On the brand side of this question, more and more, not only artisan brands, but retail brands are Entering this space because they see the corporate branded or branded merchandise space as a viable sales channel wasn't always the case. A lot of times, even as recently as 4 or 5 years ago, we really didn't have access to a lot of retail brands that you or I would recognize from, you know, our own shopping. 

Greg:  

Sure. 

Justin:  

But now, the brands are seeing this space as very viable for not only their own sales, but they also see the power in co-branding with the companies that want to access their product. 

Greg:  

So there's lots of partnerships to be had. 

Justin:  

To drive that creativity and novelty, absolutely, and it definitely works both ways. It's something that we can pursue and do pursue on a proactive basis when one of our clients comes to us and asks, Hey, can you get this item? I found this at my favorite retail store. Can we possibly, you know, co-brand this for our own marketing efforts or for our employee experience efforts? We are always happy to pursue those opportunities and figure out if we can partner with those retail brands. 

Greg:  

By now, and maybe we achieved this point of inflection long ago where everything seems the same in some aspect, a pen, branded pen. So I imagine there's some requests and a lot of asks for something new. 

Justin:  

That is perhaps the most common request that we receive, and it was echoed throughout the show that we just returned from. Many times per day, I will hear some version of the question, show me something new. Can I see what's new? What have you never seen, what have you never shown me before? 

And thankfully, between these retail brands that we're discussing, more of these artisan suppliers that we're discussing, and a continued emphasis across the industry on pushing the envelope on the product side, we have access to more products than we ever have before. And that allows us to actually come to the table with what's new. 

Greg:  

Yeah, it helps to have a creative department partnership as well, extend that creative thinking to creative types and see what they can come up with. 

Justin:  

And you are certainly right, Greg. The takeaway there for me has always been if you can dream it, we can find it. Even if those artisan sources or those retail sources or our standard product network doesn't ultimately offer the thing that we dream up. We can still go make that product on a completely custom basis, and I think that's still to this day, after 15+ years of doing this, so my favorite part of the job is being able to develop something from scratch. 

The second most common request that I get is for sustainability. And this has not been unique to just this year or to just this past show. This is a trend that has only continued to grow over the last five to seven years, but we are now finally seeing more responses to sustainable asks in the product space as well as the traceability space. Traceability as an extension of sustainability is new, at least that I have seen in this branded merchandise space. 

Greg: 

So tracing the product ingredients or parts back to the source, is that what you're talking about when you say traceability? 

Justin:  

Exactly right, as we do with food traceability sometimes. It extends that exact same concept to the production of, let's say, a t-shirt. If we're going to claim that that t-shirt is made from renewable or sustainable materials or if it's comprised of,, you know, only organic cotton. There are now digital proof points that are available throughout that entire supply chain to ensure that the t-shirt that you as a client of ours is going to buy is fully sustainable as advertised. 

Greg:  

So some of those tracking mechanisms are showing up on branded merchandise products. They are a consumer; I could scan a QR code or whatever and find out where that came from. 

Justin: 

Correct. And it is down to a fiber level in some of these cases for garments or for merchandise items that are constructed from fabric. You can embed tracking material, digital tracking material inside that fabric so that it cannot be compromised throughout the supply chain and actually prove out material origin and use, fair labor, and fair trade throughout the entire production and delivery process. 

Greg: 

And all starting with the consumer… 

Justin:  

Correct. It started with the consumer. We're lucky that it has what I would say trickled into our space. However, I think that the request is only going to continue to increase for sustainable items, but now we're lucky enough to have an opportunity to prove it. 

Greg:  

A traceable t-shirt. 

Justin:  

The t-shirt has ruled supreme in the world of brand and merchandise. Since the beginning, we're now seeing sustainable options for these most popular heavily commoditized items. When we talk about artisan product or handmade product, it doesn't just have to be the hand carved bowl that you may receive one version of. These can be items that you and I use every day are water bottles, the pens that we use. I've seen pens made out of cork and plant fibers. These things are all being reworked under this direction of sustainability so that we can answer the call from our clients. 

Greg:  

What is upcycling? That's part of the sustainability trend? 

Justin:  

Absolutely. We saw and continue to see a lot of requests for that. There's a theme here, Greg. There are a lot of requests for these items. Upcycling is simply taking a product that exists right now in some form, and that could be a t-shirt that has a logo on it, it could be a pen that is sitting on a shelf somewhere and repurposing that item into something else that is usable. And what we encountered at the PPAI show is a number of partners that we can work with to take items that may have expired due to old branding, might be out of style, might not be all that useful anymore, to be able to take those and turn them into something brand new that is useful, but that also has a story attached to it of not wasting product. 

Greg:  

Can you give me some examples of what we're talking about here in terms of products being remanufactured into something else? 

Justin: 

Absolutely. My favorite piece that I saw was a jacket that was reflective. The intention was that you could wear it outside for exercise or for running just for the added visibility. The reason why it was reflective was that it was constructed from shoes, from running shoes that had reflectivity in the original construction material, and those shoes were turned into this jacket and can actually be done at scale. 

I also saw an example of old bike tires turned into flip flops. 

Greg:  

OK. 

Justin:  

So I was encouraged because I never would have made these connections if it were just me sitting back trying to figure out what to do with some old product. But now that we have partners that we can go to, I really feel as though the sky is the limit in terms of what we can help achieve through upcycling. One of the big benefits of branded merchandise is to turn, you know, customers into advocates. 

Greg:  

Well, that's a great story to integrate. This used to be a tire, but now it's a flip flop. Great story for them to tell and another angle to champion the brand.  

Justin:  
And I think that there's also this unique opportunity as we think about stickiness or that staying power of the merchandise to allow something that has more of a unique story to live well beyond what its original form was. So that jacket that I mentioned, those shoes. Lost their usable life, but that jacket will live well beyond. And because it's such a unique piece and has such a story attached to it, I'm inclined to believe that the recipient of that jacket will keep it much longer than those shoes would have lasted. 

Greg:  

So I can imagine, Justin, that this new level of artistry and sustainability infused into branded merchandise products might be affecting the cost a little bit. How do you see your clients responding to potentially more expensive branded merchandise? 

Justin:  

Greg, you're correct in that a handmade item will likely always carry a bit of a premium over something that is, you know, machine made or made at scale. However, due to just the sheer volume of requests for these items that we are now seeing, and that the industry is seeing on the whole, the price for these handmade items or sustainable pieces, they've really started to drop. These have become more and more mainstream, and as a result of that scale, we are starting to see prices come down pretty much across the board on anything that you would label sustainable. 

Greg:  

Now Justin, I want to spend just another minute on what we touched on earlier, this consideration for intent, or what I hear you sometimes refer to as thinking beyond the transaction to maximize impact, which I dare say involves breaking reorder habits. 

Justin:  

That's right. Yeah, Greg, I think there's been a long-standing belief or feel in the branded merchandise space that we are shifting a lot of the responsibility for product selection and creation for ideation and solutioning, and ultimately for the delivery of a really compelling product onto the end user. There's been what I like to call a “catalogization” of the industry. 

And while that self-serve model can be really helpful for some, I think it removes the ultimate value of what a company like DCG one can bring to the table, but also just what the nature of brand and merchandise should be. 

If we look at the intent of any product that comes from this space, that intent is for that product to take a brand and allow it to live beyond the initial interaction with that brand. We know how to do that because this is the space that we occupy. We work on a lot of really unique campaigns and solutions around these products, and those additional ideas and touch points cannot possibly live in a catalog. 

Greg:  

You lose a lot of opportunity. 

Justin:  

You certainly do. I'm a big fan of getting down to the why. Why is this product being deployed? What is the intent? I can make some assumptions, but again, once we hear from our clients what they hope to achieve through these goods. We can be a lot more intentional about what the product is that they're using along with maximizing a budget that is associated with that product than could ever be achieved through a catalog, especially given integration and the way we can bring in other integrated assets to a branded merchandise piece or any other piece of marketing now. 

So, branded merchandise needs that same consideration.  

Greg:  

There's much more shelf life to be had there if we can extend the customer journey through integration. 

Justin:  

And that's another thing that we continue to hear is a desire for more insights into the performance around brand and merchandise. 

Greg:  

Oh yes, of course, the data. 

Justin:  

The data always goes back to the data and it should because for a long time and even still to this day, these products can be thought of as just a necessary evil. This is part of a marketing expense because it's always Been part of our marketing plan. I'd like to flip the script on that and say it's possible to actually get real insights off of your use of these products via integration into a somewhat more cohesive campaign. We don't need to reach for the stars, but if we just start thinking about a couple of additional touch points. 

And the tracking mechanisms associated with those, we can get a lot more return on value for these products and ultimately show a lot greater insight into usage and efficacy. 

Greg: 
 

Give me an example of a project that you're working on or that you've worked on that puts all of that in motion. 

Justin:  

Certainly. We're working with a client right now who has historically used Brandon merchandise as a component or as a touch point in their recruiting process. So in order to attract top talent, part of their pitch to their,, to their candidates includes or has included. A notebook, a water bottle, a backpack… 

Greg: 

Some swag. 

Justin:  

Some swag. And those are great items. They are among the most popular items consistently for a reason. However, there was a desire to have this swag evolve into a more holistic branded merchandise experience through more intentional usage of the product. So instead of giving every applicant or interviewee a piece of swag or a box of swag by default, we reverse that process and helped them come up with a strategy for engaging the right type of applicants earlier in the process and only including branded merchandise once the applicants have opted in. 

So instead of a default blanketing of a gift, they're only giving higher value and higher perceived value items to a smaller candidate pool. And our experience, as their experience has meted out, is that this product, because it's more valuable, it's become more effective in their eyes and in the applicant's eyes. They're now receiving items that are more desirable, and that ultimately will last longer as a result of being more desirable than their previous blanket approach. 

Greg: 

Justin, as you know, more than anybody, change and evolution abound in the branded merchandise business. So what advice would you have for marketers who understand the value of it but maybe are starting to feel a bit head spun by all the moving parts? 

Justin: 

My advice is to first take a deep breath because these products should still be fun. But then also, let's just have a conversation about the intent and about the use. There's a lot of value in working with a human that understands this industry and the nuances and all of the new product as well as client side asks around the product and the use. And we are uniquely positioned here at DCG ONE to do exactly that. 

We have some amazing resources that have worked in the brand and merchandise space for a very long time, but ultimately we're really passionate about these things, and I think that we want to have the conversations to ultimately land at better product for a greater client value and to have a greater impact once those products are out in the market. 

Greg: 

There's probably never been a better time to stop and reevaluate your program if it's one that's been going on for a long time. Times change. 

Justin: 

Times certainly changed, the products changed right along with it, as have unique solutions for how to deploy that product. We have a lot of really excellent insights into how to up level the brand and merchandise product experience and we'd love to share that. I truly don't think those insights and that expertise exist in the catalog. 

Greg:  

That's some good advice right there. Justin, thanks again for jumping in and being on the podcast today. There are a lot of moving parts, as we said in branded merchandise these days, so I appreciate the update. 

Justin:  

Appreciate the time, Greg. It's a great conversation. 

Greg 

And here are some key takeaways: 

Demand for promo products has never been stronger, but in a highly competitive marketplace and an unpredictable economy, it's imperative to be more proactive with your program. 

Think more about intent, targeting, creativity, and digital integration.  

And root your program in a thoughtful strategy that's supported by data, not to mention real people. 

My thanks again to Justin Glunz, director of business development and a promo products and branded merchandise expert here at DCG ONE. If you have questions for Justin or want to talk further about optimizing your promo products or branded merchandise programs, feel free to write us today at podcast@DCGONE.com. 

Thanks very much for listening. Our Whole Idea Podcast producer is Kelcie Brewer. I'm Greg Oberst. Watch this channel for our next podcast and more expertise, insight and inspiration for Whole Idea marketing. 

Take care.