The corporate gift industry of South Africa is renowned for being highly competitive. The introduction of the internet has only added to this competitive arena with more and more clients using Google as a means to find a number of quotes in a relatively short time span.
Easy access to numerous quotes has resulted in a price levelling effect for the corporate gift industry. Companies that are overpriced simply do not get the business. The value of good quality service is somewhat overlooked by clients as most of the interaction happens online and therefore a solid relationship between the client and corporate gifts company is difficult to establish. It follows that because of the lack of personal interaction caused by the internet, price (and towards year end, stock) becomes the deciding factor. Companies or small business who do not have direct import lines or well negotiated prices are feeling the effects of the power of Google and we will soon see a change in the structure of the corporate gift industry. Large suppliers who in the past have been wholesalers will start selling to the end-user and small home businesses are not going to be able to survive on the margins that the price levelling effect will create.
Another change that will occur is that more and more corporate gifts companies will turn to in-house branding. There is a high demand for single branded items and the first company to enable themselves to do single orders with branding for a reasonable price could corner an emerging market of small businesses who want to get their name out there - one shirt at a time. Although this may seem nightmarish, the investment in getting the client when their business is in its infancy will pay for itself when the company grows along with their corporate gifts budget.
Lead times also need to become faster. It is no longer good enough to get back to a client in a day or two. If you don’t get straight back to the client you will lose the client to another corporate gift company with a faster draw. This is another reason why in-house branding will become more popular. The time it takes to hear back from contracted printers can be long and be the difference between getting the order or not.
Companies need to think about spending more on online marketing rather than offline marketing and catalogue or flyer printing. Search engine optimization is becoming a well know term and it is for good reason. South Africa is far behind the rest of the world and the corporate gifts industry of South Africa is no different. There a hundreds of corporate gift websites with .co.za domains, however only the ones who manage to appear in the first result page of the popular search engines will see growth worth talking about.
Fewer players, product specialization, and customization are the key words in the future of the corporate gift market. Too many suppliers have the same product and clients want something new and exciting. Large companies who spend millions on corporate merchandise will import directly from China and India meaning that a corporate gift company’s ability to provide a fast reliable service, have the stock when it is needed, and stock something different and unique will be vital if they still want to play apart in large corporates’ marketing strategies.
In conclusion, corporate gift companies are going to need to think of innovative ways to combat the price levelling effect that has been caused by the internet and Google. Companies are going to need to put more emphasis on "Search Engine Optimization" which will result in specialized website and business models. Unique product selection is imperative. Finally, attracting new clients by providing a service to emerging business who only want to order small quantities and making the effort to keep the personal interaction ideal alive will result in success.