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WEARABLES SALES FORECAST
Digital Fortress
By Christopher Ruvo

Top Markets for WearablesWhen the dot-com bubble burst a decade ago, scores of technology businesses ceased to exist and many distributors lost clients in what had been a rapidly-growing industry.

Not so for BrandFuel (asi/145025). Located in the heart of a mini-Silicon Valley called Research Triangle Park, the Morrisville, NC-based distributor strategically partnered with tech businesses that survived the bloodletting, prospered and continued to spend aggressively on branded apparel. “Our profits kept increasing and we’ve continued to have a lot of success with this market,” says President Danny Rosin.

Distributors who were burned by tech company flameouts before should take heed. The world has shown no letup in its appetite for technology. Innovative companies with new products and services can quickly find success and establish themselves as a marketing force. Plus, many tech companies learned their lesson from the dot-com bust and have recalibrated their values to be in it for the long haul. “Many of the technology businesses who survived the bust are flush with cash and ready to spend significantly to market themselves,” says Jordy Gamson, CEO of The Icebox in Atlanta (asi/229395).

All of that should be music to apparel distributors’ ears. And yet, the Wearables Sales Forecast reveals that the technology industry ranks a mere eighth among apparel markets at 13%. Clearly, distributors are missing out on the rich potential of the tech industry – a diverse field that includes everything from software and hardware developers to makers of electronics, telecommunications devices, Internet platforms (like Facebook) and more. After all, branded clothing plays a major role in promoting and enhancing a company’s image. And in the fiercely-competitive technology marketplace where the race is on for top talent and market share, a strong brand image helps tech firms thrive. Combine that need with an industry whose coffers fill with billions annually – and whose employment projections significantly exceed the average for all U.S. occupations – and you have a market that is ripe for the selling.

Market SpotlightIf you exploit the opportunity, you stand a strong chance of earning healthy margins on sales to customers who often buy high price-point clothing. Chris Morrissey, owner of Proforma Big Dog Branding (asi/491350) in Fort Collins, CO, earns 40% to 45% on a typical apparel order to tech clients. “You want to pursue clients that have money to spend, and technology clients do,” says Mark Ziskind, chief operating officer at New Berlin, WI-based Caliendo Savio Enterprises (asi/155807). “It’s a very strong segment.”

Trendy and Creative

In the technology field, if you’re not innovating, you’re exiting. It’s no surprise, then, that tech firms want apparel that’s as cutting-edge as their products. Fueled by the tastes of a young workforce, technology companies are inclined toward trendy, casual clothing from brand-name labels like Nike. “They want less twills and more tees,” says Mark McCormack, owner of Proforma Identity Marketing Group in Omaha, NE. “It’s often a relaxed atmosphere at these companies. They want to go casual, but they want what they’re wearing to look fashionable and tasteful.”

McCormack recently delivered a cool T-shirt that helped an international banking software company launch its new logo. The logo was screen printed on a shirt that incorporated five Pantone colors from the firm’s brand guidelines. Products the company offers were printed on the back. The T-shirts were distributed to media, employees and the software company’s clients at launch events around the world. To build excitement, the shirts were folded and packaged so that the logo was first seen when removed from the packaging. A referral helped McCormack get his foot in the door with the software maker, but from there he impressed the company by demonstrating a wealth of apparel options with tangible samples. Says Morrissey: “Don’t just use virtuals. They want to see an actual sample; they want to see that you can deliver.”

If you want to win tech clients, be prepared to flex your creative muscles to develop fashion-forward apparel that conveys the image they desire. The Icebox recently scored a hit with a retail-inspired track jacket for a major search engine company. Knowing the client desired a trendy item to give employees, the distributor matched the company with the jacket and developed a design that incorporated distressed appliqué lettering on the back panel. “It was something you’d see in the mall,” says Gamson.

BrandFuel provides another example of creative service. A videogame developer came to the distributor for eco-friendly apparel to give away at E3 Expo, a premier trade show for computer and videogames. BrandFuel found a 100% bamboo shirt, which it then had embellished with environmentally-safe water-based inks. The shirt featured an off-center design on the back and a small center-chest logo on the front. As a complement, BrandFuel packaged a USB drive with the shirt. The drive contained marketing information about the videogame maker. “The client paid a premium for it, but they were very pleased with the return on their investment,” says Rosin.

Since paying more for attention-getting apparel often doesn’t scare tech companies, many will be willing to spend on expensive customized garments. That’s particularly good news for distributors; margins can be 10% better on clothing with one-of-a-kind fabric, cut, features and embellishment. CSE has impressed tech clients with customized shirts, headwear and rain gear, while a leather jacket The Icebox created for a social networking company won raves. “Your technology clients want exactly what they want, and they’re not afraid to spend to get it,” says Gamson.

Even if you’re not building a garment from scratch, be prepared to offer innovative embellishment ideas. Tech companies typically desire more than a standard left-chest embroidered logo; they want a sassy design that will distinguish them from their competition. One way Proforma Big Dog Branding delivers creative embellishment is by placing logos and branding on different parts of a garment. For example, the name of a business may appear in eye-catching text on a shirt sleeve while the “stamp” of the brand (think Nike’s swoosh) may be put on the opposite sleeve or the back hem just below the collar. “You should be trying to create a nice retail look,” says Morrissey.

Get Connected

A word-of-mouth referral from a current customer may be the best way to connect with a tech client. But short of that, intelligent networking can go a long way. Karen Hunter, marketing specialist at New Jersey-based Head of the Hunt, connected with a security technology firm through a friend who was associated with the company. Once the door was opened, Hunter took a consultative approach and delivered a T-shirt for a breast cancer fundraiser the firm was sponsoring. “They’ve also done mugs, pens and bags,” says Hunter.

BrandFuel has connected with tech clients by sponsoring (and participating in) the Council for Entrepreneurial Development in North Carolina, an organization dedicated to fostering high-growth companies in the Tar Heel State. Red Hat, a provider of Linux and open source technology, approached BrandFuel about doing a company store because of the distributor’s involvement in CEDNC. “Red Hat was about supporting the community before anyone else knew what that meant,” says Rosin. “We were supporting a part of the community, and that spoke volumes.” Since first linking with Red Hat, BrandFuel has developed an apparel line that includes tees, polos, a windshirt, baseball caps and a funky knit beanie.

Also, why not use technology to court tech prospects? “Like” them on Facebook, follow them on Twitter and connect with them on LinkedIn. Doing so will give you a feel for the company’s ethos and help generate apparel ideas to pitch. Plus, you can warm up a cold call by mentioning one of their interesting tweets or posts. Critically, when you earn an appointment, take a page from CSE’s book and make sure you understand what the company does. “Some distributors might be intimidated by the technology, but you need knowledge of your customer’s business,” says Ziskind. Indeed, that knowledge can prove instrumental in helping you connect those software-making, videogame-producing, social networking success stories of tomorrow with apparel for years to come. “Nobody is the same,” says Morrissey. “It’s about finding what fits for your client.”

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