Feature Article - September/October 2011

Regaining Strength

Merchandise Incentives Up, With Electronics, Watches Among Favorites

By Deborah L. Vence


Even with the current economic climate as unpredictable as it is, merchandise incentive budgets no longer are decreasing, and, in fact, are moving toward a recovery.

According to a joint survey by the Incentive Research Foundation (IRF) and Corporate Meetings & Incentives (CMI), 2011 appears to be the point where merchandise incentive budgets have stopped declining and are moving toward a positive upturn for the incentive industry.

The fact is that "The return of incentives is growing as more and more people are doing two, three and even four jobs now, instead of one," said Joe Zanone, senior vice president of special markets for Paramus, N.J.-based Movado Group Inc.

"As this crunch for an employee's time continues, they need to be incentivized, motivated and rewarded for their efforts in order to keep that employee engaged," he said, adding that for Movado Group, the company has seen 2010 as its rebound year with 70 percent growth over 2009, and is on track this year to be back at pre-2009 levels in terms of sales to this industry.

Nearly 75 percent of respondents to the CMI/IRF survey reported that their 2010 sales revenues either increased or remained unchanged, while 87 percent maintained their programs moving into 2011, and 92 percent stated that they expect to sustain programs in 2012. Furthermore, the percentage of respondents who are anticipating budgets to remain at the same level increases to 46 percent in 2012 from 38 percent in 2011. (The CMI/IRF survey was conducted in the spring of 2011, electronically, and had 160 respondents who purchase incentive rewards or plan merchandise incentive programs for their organization. The survey focused on merchandise incentive budgets, the types of behaviors rewarded and the range of merchandise included.)

Survey results showed that rising to the top of the list of popular merchandise incentives are apparels that are being more frequently purchased for incentive programs now.

"In our CMI/IRF survey we saw that apparels and wearables were the most often purchased for incentive programs. Sixty-nine percent of respondents said they purchased in this category," said Melissa Van Dyke, president of the Incentive Research Foundation. "This was quickly followed by gift cards (67 percent). More than 50 percent of respondents purchased plaques/trophies (58 percent), office accessories (54 percent), electronics (53 percent) or golf products (53 percent). Giftware/home accessories were respectively lower on the list, but still had 43 percent of respondents saying they purchased incentives in this category."