by Stefano Belviolandi

The lights are on the promotional market coping with the pandemic situation that, also in Europe, is not slowing down. If, against figures, the sector, just like others, underwent a repercussion, some small signs of a recovery are evidenced.  This because the economic cycles are there for all to see: after a drop there is always a rise.

A rebound to be expected not before 2021

According to an article published on Advertising Specialty Institute, a potential rebound had occurred over the last summer months against the repercussions of the early year ones and of this last quarter that has outlined and is outlining an opaque market picture. The general consensus among the leading companies in the European promotional businesses is: “the analysed market is not expected to fully stabilise and will not grow back again until Covid-19 can be controlled, which is improbable to happen before a vaccine is available for the population”.

The question is when all this will happen. “From the current point of view, it will probably not happen before midyear 2021”, Ralf Oster, CEO of PFConcept International said. “As a whole, I don’t expect a full recovery of the activity before two years». According to a Sourcing City report, the liquidity available in the countries of the European Union is high and we suppose that, once the pandemic is under control, the individual states can invest and earn profits back in a short time. “We expect the second half of 2021 to be better than what most people think now”, Alexandre Gil, Stricker CFO said. “A great number of events to be held in 2020 has only been postponed. Moreover, after such a long period of restraint and seclusion and supposing that the vaccines will be already fully operative, people will be anxious to go out and take part to events”.

The market has not imploded

But now we must cope with the blocks and restrictions threatening the modest recovery of businesses that the companies of promotional products have designed over the last few months. “It will be a difficult month as the situation is rapidly evolving and no real previsions are possible”, Tobias Roesch, Purchase Manager of Elasto Form KG said. Some European managers specialised in the advertising sector expect that the renewed restrictions and blocks will have a negative impact on sales but it is too early to understand their nature. “We start from the assumption that this will affect business, but, as for now, we cannot see this yet based on our data”, Oster said. “Despite the current figures concerning the pandemic are worse when compared to spring, the market has not imploded as much as in that period”, Gill said. “We feel that economy is adapting, both operationally and mentally, to this new reality we are living in”. If in 2020, based on what the article reports, the North-American model dropped by 44.4 % year on year in the second quarter of sales by promotional distributors, in the third one sales have increased reducing said drop to 25%. A similar situation in Europe. “The promotional market in Europe has recorded a partial and progressive recovery after the months of March and May that had a negative impact”, Gil said. “However, the sales of promotional products, excluding those involving Covid-19 related products, were slow and the gap with last year performance continued to be remarkable”.

Online purchases

According to Sourcing City, the product requests have dropped by 58% when compared to 2019, while the purchases of personal protection equipment strengthened. The online researches of main products were interrupted for about 80% on an annual basis in April and May. This improved and decreased by 62% in June, and dropped to about 67% in July and August to increase to 56% in September, the last months for which data was available.