Current Trends in Garment Decoration
Those garment decoration companies that operate at 50 percent of capacity or more experience nearly triple their sales growth last year, according to SGIA’s 2017 Specialty Graphic Industry Survey report. These figures indicate not only that these companies have aligned their production needs with production capacity, but also that they operate more efficiently.
The companies participating in the garment segment survey were almost equally divided between business-to-business and business-to-consumer models. Two-thirds served either local or national markets. However, SGIA noticed an increase in companies serving national and international accounts, and a decrease of local and regional ones. Almost half of the companies that participated in the survey had sales revenue of $1,500,000 or more.
Although the number of companies using digital technology has increased, a majority of companies rely on a multi-technological approach, particularly in higher-revenue brackets. The top three processes used by garment decorators are screen printing, embroidery and dye sublimation.
Following an ongoing trend, equipment purchases remained strong in 2016; 95 percent made some sort of a capital investment. One third of companies reported an equipment purchase of between $50,000 and $499,999. Image carrier tools (screens), software and production tools, screen presses (manual and automatic) and dryers were the most common equipment purchases among garment decorators. Key factors influencing equipment purchase decisions, for at least half of the companies, were durability of equipment and customer support. Half of the responding companies reported paying for production equipment with cash.
Garment decorators’ most-served markets are business-to-consumer, educational institutions, athletic, corporate branding and retail. Business-to-consumer and educational institution markets appear to have the greatest potential, and hospitality services and healthcare are also growing. The most served end-product areas are also those seen as having the most potential: T-shirts, performance wear and hats/caps.
The median sales growth in 2016 was 7 percent, slightly less than the previous year. Despite the decrease in positive growth, the number of companies with increased sales numbers was still significantly higher than the number of companies with negative growth. Half of garment decoration companies had an increase in sales and production, and one-third had an increase in hiring. When there was no growth in hiring or product pricing, at least half of the companies reported no decrease, either. Overall, for every two garment decorators who experienced growth in at least one of the following business characteristics — sales, production, employment and prices for goods sold — only one did not.
Industry confidence stayed strong, with more than two-thirds of companies feeling positive about it, and confidence in the U.S. economy improved considerably. About half of the companies reported a positive attitude about the national economy (38 percent increase), and the number of companies reporting a negative perception decreased by 66.5 percent, to just 3.7 percent of the group.
Roughly half of garment decoration businesses reported their main barrier to growth was finding new customers. Another common obstacle to growth was a downward pressure on prices. Production-wise, companies rely on lean manufacturing and operating cost reductions to remain competitive. To attract new customers, more than half of the companies use their websites, referrals and social media channels. To stay competitive, companies focus on the quality of their customer service and increase the strength of their web presence. Although social media is used by at least half of garment decoration companies, we believe that its full potential is yet to be realized.
For a deeper dive into the information presented here, SGIA members can access the full reports on SGIA.org. The reports include full data and many graphs and tables to help you apply SGIA’s findings to your company. Not a member? Visit the SGIA booth (Booth 2245) to learn more.