Although the real estate market continues to be turbulent in 2023, the promotional products industry, for the most part, has yet to be impacted.
Gaithersburg, Maryland-based Sonic Promos (PPAI 288270, D3) has several national accounts in the market, providing branded merchandise to builders, movers, property management companies and mortgage lenders. “We’ve seen consistent investment in brand awareness and marketing from these clients,” says Seth Weiner, MAS, president of Sonic Promos.
Although business has held steady, Weiner remains only cautiously optimistic considering that the residential real estate market has been plagued by 23-year-high mortgage rates, exorbitant prices and limited inventory.
- In September, total existing-home sales dropped 2% from August to a seasonally adjusted annual rate of 3.96 million, according to the National Association of Realtors.
- At the current pace, home sales are on track for their slowest year since the housing bubble burst in 2008, The Wall Street Journal reported.
Weiner warns that a slow housing market may cause real estate agents, contractors, home improvement companies and businesses offering relocation services to reduce their marketing budgets.
- Events, trade shows and conferences in the real estate industry might see reduced attendance or even cancellations. That could lead to a decline in the demand for promo products, such as branded workwear, tools, signs, flyers, booth displays, brochures, moving boxes and even welcome kits for new homeowners.
Innovative Approach
Believing that most distributors have one or two real estate accounts in their portfolio, 40-plus-year industry veteran Brian Scott, president of Le Tour de Spice (PPAI 762816, S3) in Waterloo, Ontario, figured the market would be the ideal launching pad for his company’s new campaign centered on “purpose-driven” promo products.
- The real estate program suggests spices, seasonings, teas and grilling products as solutions that align with real estate agents’ sales objectives, such as pushing for referrals, maximizing open house events and retaining current clients. Of course, gifts that celebrate closings are also available.
- However, the Canadian supplier has received only a few orders since launching the program in June.
“We took the approach that we would try to do a bit of the thinking for the distributor as to how a real estate agent could potentially utilize our medium to help drive their business,” says Scott, who worked on the distributor side for most of his career.
Despite upheaval in the real estate market, Scott urges distributors to prospect those in the field because they’ll get more mileage out of their marketing spend while their competitors reel back advertising.
“There haven’t really been metrics put in place to measure promo’s impact, which leaves our medium very exposed,” Scott says. “So, when spending slows down, we’re the first medium to be cut. What I’m trying to do with this concept is give promo products more purpose. If a piece could generate two or three referrals for a real estate agent, spending $300 or $400 on a promotional campaign is a no brainer.”
Ripe With Opportunity
With home builders as some of her top clients, Joelly Goodson, senior account manager at Genumark (PPAI 266066, D11) – ranked the No. 38 distributor in this year’s PPAI 100 – is grateful that sales have remained strong this year.
“I never look at the economy as a deterrent for who I’m going to do business with,” Goodson says. “If I’m going to help a business build a brand and create brand awareness, then I just look at what problems they’re having and how I can help solve them.”
- As another indication of the market’s potential, Goodson is currently working with one home builder to create an online store for their employees.
“When the economy is down, people think the first thing you cut is marketing, but you’ll have a better opportunity to differentiate yourself if you’re promoting your brand when nobody else is,” Goodson says.