"Five Markets That Can Boost Apparel Sales"

By Mindy Toran
Advantages: 2004NOVEMBER

Consider breaking into a new market. Here are five where apparel sales could raise your bottom line. If you approach them correctly, that is.

The logoed apparel market offers infinite possibilities. No matter what the industry, there's a particular type of apparel that's sure to fit its promotional needs. Whether you typically handle T-shirts for travel agencies, polo shirts for country clubs, jackets for charities or caps for corporate catalogs, there's plenty of opportunity to explore new areas of business. And although breaking into new markets can be difficult or even intimidating, with a little planning and persistence it can be quite profitable.

This month we explore five apparel markets you may not have previously considered -spiritwear, souvenirs, licensed apparel, music industry/concerts and fundraising - providing insights from those who've been there, done that.

Give Me An S-A-L-E!

Spiritwear is an untapped area for many distributors. The market itself, which focuses on cheerleading and dance squads, is relatively new compared to other types of athletic wear and sports apparel. Cheer and dance teams are an exploding market, and since they've only been on the radar screen since the mid- to late-90s, it's also a market that's virtually untapped, which means plenty of sales opportunities for you.

Industry statistics show that about 3 million cheerleaders and 1.5 million dance team members are active in spirit sports. The market encompasses dance, drill team, stage and cheer squads for schools, sports teams, summer camps and spirit competitions. Varsity and junior-varsity cheerleaders have grown into squads for football, basketball and baseball teams; competitive cheer teams that travel to local, regional and state competitions; and competitive dance troupes.

But while the market provides an incredible opportunity for distributors, it can also be a bit of a challenge: It is heavily focused on customer service, but if a salesperson lives in the community and knows the local schools and teams, or is a former cheerleader or can relate in some way, they're one step ahead of the game.

Obviously, it's important to do your homework before you decide to break into spiritwear. Take a look at our client research feature (page 14) this issue and study the market: Who's doing what in the community, including schools, recreation leagues, churches, etc.? Talk to school principals, athletic directors, coaches, kids and their parents. Decide whether there's a niche for your business. Once you've determined that there's an opportunity, you need time to investigate a line of clothing specific to the spiritwear market and work very closely with your customers and suppliers to coordinate colors, decorating and size considerations.

Each cheer squad uses different colors that have to coordinate and can't clash with other teams they may be competing with and cheerleaders run the gamut from around age six through college; it's an extremely broad market requiring a variety of sizes.

Do a lot of planning and think ahead about how many pieces you'll need for an upcoming season. As with any market, once you're established, you can study customers' buying patterns and anticipate their needs.

Marketing Memories

Souvenir apparel is another creative way for companies and organizations to promote themselves. From amusement parks to museums, special events to sports teams, restaurants to resorts, souvenirs serve as a lasting memento.

"Souvenirs have enormous value to recipients, so it's important to be creative and pay special attention to the quality of what you're offering," says Bo Rhinehardt, president of Marketing One Sportswear Inc. (asi/261871). "When it comes to souvenirs, you're typically looking at items your client is going to resell in a retail situation. It's a market where you can really shine with your creativity."

Rhinehardt recalls a promotion he created for a local hockey team in Charlotte, NC. He arranged the meeting through a friend and provided the team with a sample. The client called back a few days later, impressed with how he had used the logo and the creativity that had gone into the design of the product. Result: He got the account.

"Networking is particularly important in the souvenir market," notes Rhinehardt. "It's not always what you know; it's who you know. But once you get your foot in the door, it's up to you to wow them with your creativity. Many of these organizations are open to trying new things, which can help you get their attention and eventually lead to additional business."

Jerry Mayotte, owner of Red Brick Clothing Co. (asi/305609), adds, "It's important to find out who your client's customers are - the actual end-users - and what type of merchandise they're typically looking for. Once you determine the clientele your client's trying to sell to, you can design products to meet their needs and accomplish your client's goals."

Mayotte put together a souvenir apparel program for a local resort that sold various items with its logo embroidered on them. Seasonal apparel was chosen to target particular groups and for use with themed parties, in addition to items being given out as incentives for tour operators.

With souvenirs, you typically have a longer turnaround time and can work closely with clients to develop a design or concept that works for them. "Research garments in retail and be ready to meet your client with new ideas," suggests Rhinehardt. "While the volume for souvenir apparel may be lower than other apparel markets you serve, your margins are typically a little higher - usually around 45% to 55% gross profit."

Licensed Logos

Another market you may not have considered is licensed apparel. This, of course, involves getting permission to use the likeness of a character, the logo of a sports team, the name of a recording artist, a corporate trademark or brand name, etc. To do so, you must usually pay the owner of the license a royalty or fee.

Licensing is a powerful marketing tool. That's because people are more likely to buy or attach value to an item with an imprint they recognize and respect. And the availability of licensed merchandise has grown significantly in the last decade, leading to more promotional opportunities. "Brand-name recognition and awareness are realized instantly with licensed merchandise, whereas for a new brand it could take years to develop benefits similar to those consumers associate with established brands," says Karen Raugust, president of Raugust Communications and author of the Licensing Business Handbook.

"A licensor receives an average royalty of about 5% of the wholesale price of each product sold by the licensee," she continues. "Since a licensor has the final say over where and how products can be sold or distributed, it's important for a distributor to carefully consider how the products will be used in promotions. Since the royalty rate can cut into margins, distributors have to weigh the pros and cons of using licensed merchandise."

Raugust adds that distributors can get more volume from an item if they're promoting a very popular movie, character, sports team or personality. "Character and entertainment licensing is currently one of the most profitable types and has generated significant revenues in the past," she says. Professional sports merchandise, including items from the National Football League, National Hockey League, National Basketball Association and Major League Baseball, is one of the strongest areas of licensed merchandise for premium distribution.

It's important to choose an item that fits in with your customer's identity and whatever they're trying to promote. If a client is willing to spend the money to use a licensed item in her promotions, you want to create an item that will achieve the desired result. Another issue to consider with licensed merchandise is slower turnaround. "In most cases, the item needs to be approved by the licensor before it can be released," says Raugust. "In some cases, it can take three to four months to get all the necessary approvals, as the product typically needs to be reviewed at each stage of the process, from creation to distribution. It's important to discuss this with your client ahead of time if time is an issue."

A Sonic Impression

Imprinted apparel for the music/concert industry is still another market distributors may want to consider. One caveat: Due to tighter budgets in the music industry today, record companies are less willing to work with distributors. And regarding concert merchandising, licensing fees can get expensive when you have to lay out a royalty up front to the artist for each item sold.

Nevertheless, this can be a lucrative market. In this environment, record labels are looking for creative partners. If you have the money and time, you can also consider working with an artist directly. Are there any, lesser-known local bands in your area that could use your help? Research emerging artists as well.

And don't forget radio stations: They are big users of promotional products, varying from giveaways for the callers, to booths at local events, to prizes for sweepstakes.

Basically, you have to be in the places where people in the music industry look when they need imprinted products:

Get involved in music conferences. Many will trade booth space for a run of imprinted totebags, etc.
Advertise in music-related magazines. Most nationally-distributed magazines offer small, inexpensive block ad space in their classified section.
Music Web sites. Trade a small run of an imprinted product to a music site for a music-related banner ad with a link to your site.
Send out mailings. Considering the size of the music industry, it's fairly simple to glean a list of potential clients from a single music magazine. Also, music-related mailing lists are often inexpensive and contain a vast number of potential contacts.

A Good Cause

Fundraising is another particularly lucrative and dependable market for wearables. Charitable events are a natural for these kinds of promotional goods. When was the last time you went to a walk-a-thon or participated in any charitable event where they didn't give out something?

"Merchandise is an excellent way of attaching your name to a cause," says Kevin O'Brien, national sales manager of Mirror Image (asi/273699). "Charitable causes are very close to people's hearts, which is generally why they get involved in the first place. When you select merchandise based on the particulars of that cause, you help create a 'lifestyle brand' for that organization that helps to further promote the cause and thank individual participants for getting involved as well."

For example, Mirror Image works closely with Amnesty International and Farm Aid, two socially responsible and environmentally focused charitable groups. "When we do promotions for Farm Aid, we make sure to use U.S.-made cotton, and we create socially responsible manufactured garments for Amnesty International," says O'Brien.

You'll also want to maintain a consistent level of customer satisfaction. "It's far more important to focus on the cause than on margins," he says. "Your goal should be to keep items new and fresh, and provide something recipients will appreciate and that has meaning to them."

Keep this in mind when designing cause-related apparel. "Creativity stands out more so than with typical promotional apparel," says Rhinehardt. "These organizations are looking for something with value - for example a T-shirt with a cool design or an item with a lot of different elements. You're asking someone to walk five miles or sell tickets for a cause, and they're typically expecting something of value in return. T-shirts and caps are inexpensive and easy to manufacture and give away, but you need to be creative in how you design and present them.

"You may want to create tiered giveaways, giving out a leather jacket with an attractive appliqué on the back and embroidery on the front to the person who raises the most money for the event." In one case, he recalls a group using caps and bandanas for a biker fun run for charity. Participants had to reach different checkpoints within a certain time period to receive a prize.

Mayotte adds, "Charities typically offer three or four levels of prizes. Because fundraising organizations are very cost-conscious, you need to offer them something unique at a reasonable price."

If you haven't worked with charities before, the easiest way to start is to pick a cause you believe in. "Having the right connections also helps," says Mayotte. "We started working with some of our charitable clients simply by volunteering on one of their committees. It's a great way to give back to the community while promoting your business as well."

Adds Rhinehardt, "You may need to relinquish your steadfast rules about margins and agree to lower minimums in the beginning in order to capture the market. But eventually, volume will increase and most likely lead to business with other nonprofits. These organizations often share information and references among each other. If you do a good job for one, they'll often help spread your name."

Once you get in the door, however, stay sharp. "If your contact with a charitable organization does result in new business, it's important to remember you're not working with typical buyers," says O'Brien. "They require far more hands-on involvement and attention to detail. The items you provide need to carry the message of the organization and help them create what's truly a 'lifestyle brand.'"

Go Forth And Sell

So pick your market. Whether fundraising, music/concerts, licensing, souvenirs, spiritwear or a combination of two, three or more, the potential is there for you to bump up your apparel sales.

Mindy Toran is a contributing writer for Advantages.

Top Areas For Promotional Apparel Sales

Total	%
Company uniforms (i.e. clothing for retail or other employees to wear at work, security, hospitality, industry, etc.)	69
Employee/Consumer incentives	64
Trade shows	40
Company stores	30
Spiritwear/athletics (i.e. cheerleading, booster clubs, etc.)	30
Souvenirs	23
Fundraising	20
Other	9
Licensing	2
Don't Know	2

When responses were broken down by distributors' dollar volume in apparel, those with more than $250,000 in wearables sales sell proportionately more for company-store use than distributors with less than $250,000 in revenue - 41% to 26%, respectively. Conversely, smaller apparel-revenue distributors sell proportionately more apparel for use as souvenirs - 28% to 11%, respectively.

Source: 2003 Wearables Watch Survey

Americans' Charitable Donations On The Rise Good News For Fundraising Promotions

American individuals, estates, foundations, and corporations gave an estimated $240.72 billion to charitable causes in 2003, according to Giving USA 2004, a study released by Giving USA Foundation. This is an increase of 2.8% over a revised estimate of $234.09 billion for 2002. This is the highest rate of growth seen since 2000.

Giving USA, the annual report on philanthropy, is published by Giving USA Foundation, a public service initiative of the Trust for Philanthropy of the American Association of Fundraising Counsel (AAFRC). The study is researched and written by the Center on Philanthropy at Indiana University.

Since 1998, charitable giving has been 2% or more of gross domestic product (GDP) following more than two decades below that mark. "People are motivated to give because they value the cause, whether it is religion, education, health care, or international relief." said Henry (Hank) Goldstein, chair of Giving USA Foundation.
" Charitable giving above 2% of gross domestic product is one demonstration of our nation's renewed commitment to the good works done by charities and congregations."

As part of the estimating procedure, Giving USA surveys nonprofit organizations about how much they received. For 2003, 55% of responding charities in the Giving USA survey reported an increase in charitable contributions in 2003 compared to 2002, 8% reported virtually no change and only 37% reported a decline in gifts. This is an improvement over 2002, when surveyed organizations were split nearly 50/50 between increases and decreases in contributions.

"In general, charities rely on philanthropic support for about one-fifth of their funding. For some groups, such as religious congregations and United Way, gifts are often the only source of money," said John J. Glier, chair of the American Association of Fundraising Counsel. "Growth in giving means that organizations can do more to meet needs in our communities."