Feature Article - September/October 2015

Higher & Higher

Improving Economy Drives Merchandise Trends Toward Aspirational Products

By Deborah L. Vence


Research has shown that the economy's continued upward trend has had a positive effect on the incentive industry, encouraging more redemptions in the form of aspirational and luxury merchandise in incentive programs.

"Program participants are really consumers who are spending a different type of currency for products. The economy currently is trending up, so redemptions will favor aspirational-type products that they would not typically spend paycheck earnings on," said Richard L. Low, president emeritus of Rosemont, Ill.-based Incentive Marketing Association (IMA) and vice president, special markets, Citizen Watch Company in Lyndhurst, N.J.

Similarly, Mike Landry, vice president of special markets for upscale luggage manufacturer Tumi Inc., based in South Plainfield, N.J., agreed that the economy is bouncing back a little bit, adding that he has seen slightly higher budgets and some interesting RFPs for the fourth quarter.

In fact, surveys over the past couple of years have proven that the economy has had a positive effect on incentive merchandise programs.

For instance, back in March of this year, McLean, Va.-based Incentive Research Foundation (IRF) released the 10 Trends for Merchandise and Gift Card Programs in 2015, a study that showed that budgets are trending up with a positive economic outlook, reflecting strongly on merchandise and gift card program budgets for 2015.

Also indicated in the research was that while 40 percent of the industry still feels that the economy has little to no impact on these programs, a more significant 50 percent of program owners and suppliers stated that the late 2014 economy was having a positive impact on merchandise and non-cash programs.

Moreover, while a third of the industry felt that the economy was having a negative impact on merchandise and gift card programs at the height of the recession in 2009, that number had dropped to less than 10 percent in late 2014.

Similar results came out of research done by the IRF back in 2013, too, when a survey revealed that more than half of respondents believed the economy was having a positive impact on plans to implement merchandise incentive programs.

Merchandise Incentive Programs

Recognizing employees for a job well done can make all the difference in the world. And, establishing a solid merchandise incentive program can ensure that those employees are rewarded appropriately.

"The beauty about incentive programs is that they can be tailored to meet all the goals you are trying to achieve. Giving a merchandise reward for daily activities or short-term job completions all the way to yearly sales goals or long-term projects makes the different types of programs infinite," said Kevin Dougherty, director, special markets, Seiko Corporation of America, Mahwah, N.J.

Research has shown that the economy's continued upward trend has had a positive effect on the incentive industry, encouraging more redemptions in the form of aspirational and luxury merchandise in incentive programs.

"Simple programs," he said, "like perfect attendance, continuous safety or wellness programs, are popular because this is something that the participant can absolutely have 100 percent control over.

"They feel they can achieve them with pure willpower and determination. Larger, more difficult programs like sales goals or properly restructuring internal operations to run more efficiently are just as popular because the individual feels engaged, challenged and able to use creativity to achieve," he said.

And, "Whatever it is, the merchandise is the reward they receive reminding them of a job well done," he added.

That's true. Incentive experts have been saying time and again that merchandise, being a tangible reward, is so important in incentive programs because the recipient will more likely relate that reward back to the company as opposed to a non-tangible reward.

And, the types of tangible rewards being chosen continue to be top-notch.

"Electronics are always high on the list of redemptions due to the high frequency of innovation and perceived value. Watches and jewelry are usually the second or third highest redemption category and offer the most individuality and recognition," Low said.