Rolling With the Changes
The State of the Incentives & Rewards Industry
By Joe Bush
Annual reports and examinations of how business is going can't be the same for any industry because of the global pandemic's sideways effect on all aspects of life. The year began as usual, but by May, the business world turned upside down. A May study by the Incentive Research Foundation (IRF) found that only 34% of respondents reported little or no adjustment to their incentive programs due to the pandemic. Everything has changed, and there are only guesses as to how long businesses will suffer and how they will operate when the virus is under control.
Several incentive program industry veterans recently gave Premium Incentive Products their time and knowledge regarding their world before and after COVID-19.
PIP: How was the health of the industry before COVID-19 began to affect it?
Stephanie Harris, president, Incentive Research Foundation (IRF): Prior to COVID-19 we were seeing very strong numbers from the industry as organizations were looking to reward and retain their top performers in a competitive job market. In the IRF 2020 Outlook Study we saw predicted increases in incentive program budgets and on spend across all categories including card, merchandise and travel/ experiences.
Paul Bellantone, president and CEO, Promotional Products Association International (PPAI): Overall, the industry and the association has been strong, steady and stable. In fact, the PPAI Expo 2020 was one of the best ever. Promotional products, corporate gifting and incentive marketing are becoming more of an integrated part of strategic communications, and this will not change. However, how we serve the market has changed forever. While we are projecting a decline in sales due to the worldwide effects of the pandemic, when surveyed, the industry is optimistic for a recovery to begin in the second quarter of 2021.
Steve Slagle, managing director, Incentive Federation Inc. (IFI): From my perspective working with members of the Incentive Federation, most indicators in fall 2019 were very positive. From meetings I attended or conference calls I participated in, companies in all sectors seemed positive about their business prospects. One negative affecting some of the prospective business was the impact that tariffs on products manufactured in China was having on the supply chain. That issue was covered pretty extensively in the media, and many companies predicted shortages of products if the 'trade war' and tariffs did not abate.
In October 2019 the reports about tariffs and attempts to achieve a positive agreement between the U.S. and China were pessimistic. Aside from the trade issue-that certainly dampened the enthusiasm of companies engaged in merchandise-in November the IRF's 2020 Outlook report presented positive indicators for just about every industry sector from interviews with corporate buyers, suppliers and incentive providers.
Bill Martocci, president, Carlisle Sales & Marketing, and executive vice president, Incentive Marketing Association (IMA): 2019 feels like a long time ago. Business was strong throughout the industry, as was the economy. Very often corporations pull back slightly during a presidential election year due to the possible winds of change, but 2020 was beginning to shape up as a year of solid corporate spending with unemployment low and the stock market doing well.