Moving into the fourth quarter, sales in the promo industry have been relatively flat year over year. That’s the word from a panel of Power 50 members helmed by Jo-an Lantz of Top 40 distributor Geiger (asi/202900) at the ASI Power Summit in Pasadena on Monday, Oct. 23.

While orders, in many cases, remained the same, dollar-wise, many clients were looking for higher quantities of lower-priced items. As Jeremy Lott, CEO of Top 40 supplier SanMar (asi/84863) put it: “We’re selling more dozens than dollars.”

Members of the Counselor Power 50 list of promo’s most influential people talked sales, artificial intelligence, sustainability and more during a panel at the ASI Power Summitt 2023 in Pasadena, CA.

Another wrinkle for SanMar, Lott said, is that the supplier had overbuilt its inventory in the wake of the supply chain volatility of the last few years, which has had significant implications for profitability. “We’re having a good year from a topline perspective,” Lott noted, adding that there’s a bottom-line challenge as the company works through the “inventory bubble” it’s created.

The other panelists – Daron Hines, president of Top 40 distributor Staples Promotional Products (asi/120601); Jo Gilley, CEO of Top 40 distributor Overture Promotions (asi/288473); and Pierre Montaubin, CEO of Top 40 supplier Koozie Group (asi/40480) – echoed Lott’s sentiments.

Montaubin attributed the flattening to the return to office trend that’s been growing. Koozie Group, he said, has been seeing a lot of traction in lower-value, “pre-pandemic” items like sticky notes, pens and notebooks – a reversal of the higher-value items like plush blankets that were popular employee gifts during the heyday of COVID-related remote work.

At Overture, Gilley said, the story is the same, with sales slightly slower than forecasted. “Our sales reps are working harder, even though it’s flat,” she added. “They’re quoting more things to get the order than in the past.”

Hines pointed to a “belt-tightening” that Staples Promotional Products has been experiencing with its clients, largely due to high inflation. “It’s not where we wanted to be, to be completely transparent,” he said.

Nonetheless, Hines sees positive signs for the future, pointing to the bullish U.S. jobs market – which has added more than 2 million positions in 2023 and more than 300,000 in September alone. “That bodes well for our industry,” Hines says. “That’s a real encouraging sign for us.”

Lantz also asked panelists about how their companies are incorporating artificial intelligence into daily operations. At Overture, Gilley said, every single department is using generative AI in some way, whether it’s creating images using tools like Midjourney or writing Excel formulas with the help of ChatGPT.

At SanMar, Lott sees potential to save money by using AI models, rather than live models, in some of their photoshoots. AI-enhanced trend forecasting could also help the company monitor and maintain inventory levels.

Automation also has a huge role to play in SanMar’s warehouses. The supplier is ramping up a 1.2 million-square-foot distribution center in Virginia and is working with consulting firms to incorporate automation into the design. “The ROI on automation investments is huge,” Lott said. “We’re spending over $100 million inside that building on automation.” It’s a big bet, he added, but has the potential to provide immense savings on labor costs for the supplier.

Staples, too, is on an AI journey, according to Hines, who added that the company has been dabbling with the technology within its supply chain and also for demand forecasting. “We’re just on the cusp of doing some real work with AI,” he said. “It’s going to be a part of the fabric of our company in the future.”

Panelists also touched on the importance of sustainability. Montaubin noted that Koozie Group discontinued single-use plastic products, is adding more recycled materials to products, and continues to use its “KG Factor,” which assesses product longevity as an entry point into sustainability.

“It’s about doing the right things even when nobody is watching,” Montaubin said.