Most PPAI 100 companies are exploring artificial intelligence (AI) tools, signifying a new chapter in the promotional products industry’s digital transformation.

According to the latest data from PPAI Research, 92% of PPAI 100 suppliers and 87% of PPAI 100 distributors are engaging with AI in their business operations.  

• Suppliers report that AI is driving significant gains in marketing (74%), enhancing customer service (37%) and optimizing sales processes (28%).
• Distributors are also benefitting from using AI for marketing purposes (88%), followed by sales processes (36%) and customer service support (21%).

“Promo firms are betting big on AI to streamline operations and elevate customer experiences, with cost savings and revenue growth following close behind,” says Alok Bhat, market economist and research lead at PPAI.

Promo firms are betting big on AI to streamline operations and elevate customer experiences, with cost savings and revenue growth following close behind.”

Alok Bhat

Market Economist & Research Lead, PPAI

Challenges In AI Implementation

The majority of PPAI 100 suppliers (69%) and PPAI 100 distributors (65%) report that a lack of internal expertise is their most significant barrier to AI adoption.

“You won’t always find AI expertise within your technology team,” says Phil Gergen, chief information officer at Koozie Group, PPAI 100’s No. 9 supplier. “Talk to your team members to find out who is already using these tools on their own and how they are using them. If used correctly, AI can help any role in your organization be more efficient and successful.” 

If used correctly, AI can help any role in your organization be more efficient and successful.”

Phil Gergen

CIO, Koozie Group

Josh Gerads, brand manager at Crystal D, PPAI 100’s No. 88 supplier, compares AI to the California Gold Rush – everybody wants to get in on it.

“At the same time, everyone has a slightly different definition of what AI is, few organizations really know everything it can do and many lack the time or resources to learn how to use it for their benefit,” Gerads says.

Crystal D’s teams who focus on the customer experience, including sales and marketing, are currently exploring how technology like AI can make it easier to serve more customers. However, Gerads stresses that the St. Paul, Minnesota-based firm never wants to lose sight of the human aspect in the customer experience.

RELATED: AI’s Role In Promo Grows Despite Hurdles

“AI can increase job satisfaction and reduce turnover by creating efficiencies, but it can’t fully replace the human connection made between our Memory Makers and their customers,” Gerads says. “We take pride in the relationships we have with our customers, knowing them and their businesses well, and it’s something technology just can’t reproduce.”

Ken Leslie, president of IMAGEN, says that PPAI 100’s No. 84 distributor primarily uses AI to support content creation for marketing, including writing and editing emails, social media posts and creating outlines for presentations.

“There’s more that we could be doing to utilize AI tools, but while there are lots of resources available, the time it takes to both learn and implement them is a hindrance for our team,” Leslie says. “There are a couple of us on the IMAGEN team that are spending time each week keeping tabs on what is going on in the AI world, but internal expertise is a definite challenge for us.”  

There’s more that we could be doing to utilize AI tools, but…the time it takes to both learn and implement them is a hindrance for our team.”

Ken Leslie

President, IMAGEN

With limited bandwidth to dedicate to researching options, Michael Wolaver, founder and captain of Magellan Promotions, says that PPAI 100’s No. 94 distributor will be taking a pragmatic approach to implementing AI. 

“What we grapple with is, beyond using ChatGPT to help edit content, what are the areas that AI can help create efficiencies for our business? After all, AI will only really help our business if it helps solve challenges with real results,” Wolaver says.

• Half of suppliers report difficulties in integrating AI with existing systems, 31% express data privacy concerns, 22% claim employee resistance and 19% cite the high cost of AI technologies as other barriers to AI adoption.
• System integration issues (35%), employee resistance (27%) and data privacy concerns (27%) are also challenges for distributors.

“AI’s potential is undeniable, but firms are hitting roadblocks,” Bhat says. “Internal expertise and system integration stand out as the biggest hurdles to widespread adoption.”

Raul Rodriguez, CEO of Merch.ai, a startup business service provider aiming to help promo companies incorporate AI into their specific needs, feels that these growing pains will require a consolidated perspective on the clearest ways the technology can help the industry.

“We think AI will change the way everyone works, our industry included,” Rodriguez says. “However, there needs to be more AI tools built that are specific for the industry, easy to use, with not much training required and actually efficient. A tool that meets that criteria will get mass adoption.”

There needs to be more AI tools built that are specific for the industry, easy to use, with not much training required and actually efficient.”

Raul Rodriguez

CEO, Merch.ai

Potential AI Benefits For Suppliers

Over the next three years, 83% of PPAI 100 suppliers aim to use AI to increase operational efficiency and improve customer experience.

“As business costs continue to increase and labor becomes more challenging and expensive to secure, AI solutions are growing in importance,” says Matt Wagner, vice president of sales at Fields Manufacturing, PPAI 100’s No. 80 supplier. “They not only help improve efficiency and manage operational expenses, but also allow businesses to maintain the speed demanded in today’s marketplace.”

As business costs continue to increase and labor becomes more challenging and expensive to secure, AI solutions are growing in importance.”

Matt Wagner

VP of Sales, Fields Manufacturing

“As more early adopters emerge as experts and share their experiences,” Wagner adds, “it will become easier for those approaching AI with caution or limited expertise to understand and adopt these technologies.”

• Other goals for AI implementation amongst suppliers are cost reduction (58%), revenue growth (42%) and innovating new products or services (22%).

According to Chris Alfano, chief digital officer at Vantage Apparel – PPAI 100’s No. 12 supplier – AI’s biggest impact may have less to do with output and more about information gathering.

“The real potential lies in AI’s ability to provide powerful insights—whether it’s analyzing distributor behavior, understanding end-customer needs or identifying product and seasonal trends that can drive smarter decision-making,” says Alfano. “By not adopting AI-driven strategies, suppliers may fall behind competitors who are using these tools to enhance efficiency and customer understanding, which could eventually impact long-term profitability and market positioning.”

The real potential lies in AI’s ability to provide powerful insights.”

Chris Alfano

Chief Digital Officer, Vantage Apparel

Whatever the use, an intentional approach must be taken for such a broad technology, according to Gergen.

“Each team will use AI differently,” Gergen says. “The first step in integrating it into current systems is to consider practical problems that need fixing and then determine if AI is one of the tools that will allow for innovation and solutions to those challenges.”

More than three quarters (76%) of suppliers say AI has had no significant change in their workforce structure and nearly a quarter (24%) say they’re still assessing its long-term impact. Furthermore, while AI is starting to improve personalization, most suppliers (59%) have yet to see significant benefits.

Alfano was surprised to see that more than three-quarters of suppliers claimed the technology had not changed their workforce.

“It’s concerning that 75.7% of promotional product suppliers report no significant change in their workforce due to AI,” Alfano says. “This suggests a missed opportunity to leverage a tool that can transform efficiency and decision-making at every level.”

Still, Gergen does not see it as a tool to cut down on the workforce.

“I don’t see AI reducing the number of employees in our organizations,” Gergen says. “I believe it can create a more agile workforce that will expand our capabilities and offerings to our customers.”

RELATED: AI’s Impact On Promo: The Future Is Here

BoxUp, PPAI 100’s No. 84 supplier, is part of the roughly 8% of supplier respondents who said AI isn’t currently a focus.

“We don’t use AI for anything and don’t have a plan to in the near future,” says Jake Kitchell, enterprise sales manager at BoxUp. “We may potentially in 2025, but it would be a huge learning curve for us as a fairly small company.”

Potential AI Benefits For Distributors

Like their supplier counterparts, 81% of PPAI 100 distributors are prioritizing AI to increase operational efficiency and 78% aim to use AI to improve customer experience.

“In terms of operational support, we have already used AI tools to help write API integrations and manipulate data sets,” Leslie says. “These have been one-off uses, though, and I look forward to continuing to learn more and explore how AI tools will be able to integrate into our regular workflow and streamline daily tasks.”

Johanna Gottlieb, vice president of business development at Genumark, PPAI 100’s No. 35 distributor, sees the technology as a matter of making it a practice to continue to meet clients where they’re at, even as those clients become part of a generation that expects things that previous generations succeeded without.

Our buyers are living in the AI world.”

Johanna Gottlieb

VP of Business Development, Genumark

“Our buyers are living in the AI world,” Gottlieb says. “Many of us grew up in a google era and AI is enhancing that times 100. Younger audiences will be the decision makers before we know it. We have to lean in to what they are doing and using so we can be better prepared to support them.”

• Other goals for AI implementation amongst distributors are revenue growth (54%), cost reduction (43%) and innovating new products or services (19%).

“These statistics align very closely with our AI perspective,” says Carolina Junghans, CEO of Blink Marketing, PPAI 100’s No. 88 distributor. “Our executive team is actually reading a couple books on AI in the workplace this quarter.”

Nearly three quarters (74%) of distributors say AI has had no significant change in their workforce structure and nearly one-third (32%) say they’re still assessing its long-term impact. Furthermore, 44% have yet to see significant benefits from AI in terms of personalization.

Gottlieb is skeptical of the report that so many distributors claim little change to their workforce as a result.

“I would love to speak to the 73% of distributors that say AI has not led to any significant changes in workforce,” Gottlieb says. “I am curious how much this number will change over the next 2-5 years.”

Written by: John Corrigan

Published with Permission from PPAI