Feature Article - September/October 2017

The Right Stuff

The Ever-Expanding Universe of Merchandise Incentives

By Brian Summerfield

Home Sweet Home

At a time when Martha Stewart and Mario Batali are media moguls, cooking and home entertaining items are among the hottest retail goods. And that popularity has definitely carried over into the merchandise incentives space. Demand is high for products in the culinary arts and home design.

"Over the past 20-something years, we've really seen a shift in redemption, which mirrors what's going on in retail trends," Krichman explained. "Years and years ago, the redemption patterns were around 70 to 75 percent for anything that plugged in. Now, more people are going toward home and fashion. We're definitely seeing a rise in those areas."

This has led to a rise in anything related to epicurean delights, from deep fryers to coffee makers.

"Our JURA automatic coffee machines create the gourmet experience of Swiss coffee culture in your own kitchen," Sawicki said. "Few categories have the broad appeal of gourmet coffee, which is popular with men and women of all generations. We're also seeing increased interest in our Capresso coffee makers, espresso machines, grinders, iced tea makers and frothers."

According to Krichman, one reason many of these items are so popular in incentives programs is that they give people a creative outlet.

Merchandise incentives have evolved a great deal over the past several decades, and certain products might not be as popular as they once were. But as long as people need and want "things"—whether those are computers, music players, saucepans, serving trays, purses or kayaks—merch will retain its appeal on the whole.

"It's a different approach to DIY," she said. "Several years ago, people were into tools and trying to build stuff. But who's really building these days? This allows people who aren't going to paint or sculpt or something like that to do something a little bit creative."

Another reason they're in demand is within incentives programs is that people aren't as willing to spend their own money on them, particularly since they often own some version of those products already.

"In incentive programs, people will spend for certain things in home categories that they wouldn't want to spend cash for," she said. "That's where we'll see a lot of people get their cutlery or replace certain cookware that they got when they registered before getting married. When they're getting cookware, for example, they're upgrading to Viking brands. They could've gotten something similar to that piece of cookware they've had since college, but now they're upgrading themselves to the 'grown-up' version."

Status Symbols

There's another reason why that hypothetical married couple would want Viking cookware, Krichman explained. Even if neither of them are great cooks or enthusiastic foodies, that brand signifies refined cultural tastes. Though it doesn't represent a category per se, this notion of brand consciousness represents an undeniably significant rising trend in merchandise incentives.

The most important "status symbol" product category right now might be handbags—"anything with a logo on it, whether it's Michael Kors, MCM or the Coach brands," as Krichman said. She added that backpacks by Totes and a few other select manufacturers are in demand.

In the sporting goods category, golf gear is perennially the "status symbol," Kooken said. And right now, there may be no hotter brand than Parsons Xtreme Golf, or PXG. The latest in design and engineering, a set of PXG clubs retails for nearly $3,000. That's a steep price to pay, but the "cost" is softened somewhat when it becomes something that can be redeemed with points in a sales contest.

No matter which category you're considering, it is well known and respected brand names that deliver the kind of status symbol that turns a piece of merchandise into a trophy.

Merch Is Here to Stay

Merchandise incentives have evolved a great deal over the past several decades, and certain products might not be as popular as they once were. But as long as people need and want "things"—whether those are computers, music players, saucepans, serving trays, purses or kayaks—merch will retain its appeal on the whole.

"Employee recognition programs have come a long way from the days of trophies and plaques," Sawicki said. "Strategically selected gifts will be valued and appreciated over time, making them a strong motivational investment. Client gifting programs rely on merchandising incentives for the same reason: They can touch someone's life in a meaningful and memorable way. We expect merchandise incentives to increase in importance over time. As communication outlets grow and proliferate, it's getting harder and harder to make a lasting impression on people. What better way to get attention than putting desirable merchandise in their hands?"

Glamann agreed. "Merchandise rewards are a great fit for any type of incentive program and have been proven to have a more powerful motivating factor than cash," he said. "Having a firm grasp of the demographics of the program will definitely aid in creating a rock-solid merchandise rewards offering."

That notion of understanding people's desires and how those evolve over time is critical for the success of any incentives program that includes merchandise, Krichman said. That means doing things like going to all sorts of industry-specific trade shows and reading publications and research that point to trends in retail. It also means proactively showing program participants the latest and greatest products and what they can do.

"It's really important to think about what's trending in retail and be able to change with the times," she said. "We don't just have things people can redeem online. We're able to bring that merchandise to people. Even though retail is 'dogging,' we're so fortunate in the incentive industry that we can bring those products to people so they can see it, feel it and get that fun interaction. In the incentive channel, we're fortunate to be able to do what retail increasingly can't do anymore. We bring brands to people who don't necessarily think about it."