Industry Trends for 2019
What's in store for 2019? According to incentive industry professionals, things should continue to be rosy.
The Incentive Research Foundation's "Industry Outlook for 2019: Merchandise, Gift Card, and Event Gifting" study reports high levels of economic net optimism during the Fall of 2018, and a positive outlook for 2019. The study provides useful insights and benchmarks on non-cash reward types, average spend and how incentive programs are being administered.
"The IRF's 'Industry Outlook for 2019: Merchandise, Gift Card and Event Gifting' reports strong optimism around non-cash reward and recognition budgets in 2019, with increases in merchandise spend, gift card spend and the number of participants earning a reward," said Melissa Van Dyke, IRF president. "The study did reveal some areas of concern for program owners, such as the fact that one-half of corporate respondents do not do any reporting or analysis of their non-cash programs."
The IRF surveyed 500 industry professionals, including corporate, supplier and third-party segments, tracking key metrics over 10 years. The study provides trends in economic optimism, budgets, award types and reporting for incentive programs. Key findings include:
- Economic Net Optimism Is High: The Fall 2018 Net Optimism Index for incentive merchandise and gift card programs was 43 percent, up 21 percent from Summer 2017. Suppliers were the most optimistic segment.
- Per-Person Spend Is Increasing: The average per-person spend is $824, a considerable increase from prior years. This is largely explained by the increase in respondents spending more than $5,000.
- Average Merchandise Reward Value Is $160: Logoed brand-name merchandise and electronics are the most common rewards with corporate respondents, while sunglasses and electronics are the most popular among third-party providers.
- Average Branded Gift Card Reward Value Is $100: Gift cards for use at coffee houses dominate the branded card landscape, followed by dining and online retailer gift cards.
- Average Per-Attendee Event Gifting Spend Is $210: While suppliers see event gifting across a broad range of meeting types, corporate audiences are most likely to be using gifts for incentive trips, internal meetings and customer events.
- High Level of Local Retail Sourcing for Gift Cards: More than two-thirds of corporate respondents use local retailers to purchase gift cards for their programs.
- Low Rates of Corporate Reporting & Analysis: One-half of corporate respondents indicate they do not do any reporting or analysis for their non-cash program. Third-party providers are commonly reviewing earning and redemption reports, participation reports and behavior-change analysis.
- Sales Productivity Is the Leading Indicator: When analysis is done, sales was reported by both corporate and third-party respondents as the lead indicator of the impact of a program.
- Outlook for 2019 Is Positive: Industry stakeholders have very strong expectations for 2019, with 84 percent reporting they expect their company to have strong financial performance.
The study was supported by IRF Research Advocacy Partner, Incentive & Engagement Solution Partners (Incentive Marketing Association SIG).