Incentive-industry professionals are bullish about the year ahead, according to recent findings released by the Incentive Research Foundation. The organization's Industry Outlook for 2020: Merchandise, Gift Card, and Event Gifting reports high levels of optimism for this fall and an overall positive forecast for 2020.
Drawing on the responses of 377 incentive professionals across the corporate, supplier and third-party segments, the Outlook for 2020 found that 85 percent of respondents expect their company to have a strong financial performance in the year ahead. Additionally, the Net Optimism Index, which measures the percent of those holding a negative view of the economy subtracted from the percent of those holding a positive view, is at 41 percent for fall 2019 -- slightly below the 43 percent it hit the same period last year, but almost double its rate of 22 percent two years ago.
Across the board, respondents anticipated increasing investment in their incentive programs. Fifty percent expected to see an increase in the number of participants receiving a reward in 2020 (compared to 38 percent in 2019), 42 percent expect to see growth in their overall budget (vs. 38 percent last year) and 34 percent predict an uptick in merchandise spend (compared to 29 percent a year ago). Even areas such as communications budget (31 percent predict increase compared to 27 percent last year) and administrative budget (23 percent for 2020 versus 17 percent for 2019) saw more optimistic outlooks from respondents.
Professionals are doing more to establish the value of their programs as well. "As budgets and participation grow, expectations also increase," noted Stephanie Harris, IRF president. "Reporting and analysis have increased dramatically this year, and participant satisfaction is emerging as a key metric."
The average merchandise reward value reported was $160, the same as last year's figure, with the most popular types of merchandise rewards across all segments being:
- Logoed brand-name merchandise (76 percent)
- Sunglasses (69 percent)
- Electronics (67 percent)
- Clothing/apparel (64 percent)
- Sporting/golf items (51 percent)
- Watches/jewelry (50 percent
In the gift-card category, the median gift-card amount continues to hold at $100, with the following categories most popular for programs:
- Exclusively online retailers such as Amazon (65 percent)
- Coffee (61 percent)
- General big-box stores (58 percent)
- Department stores (54 percent)
- Dining (49 percent)
- Electronics (45 percent)
- Home improvement (43 percent)
- Clothing/apparel (42 percent)
Not all the news was positive. IRF reported an increase in the number of programs canceled this year compared to the year before, with 28 percent of respondents reporting that they or their clients discontinued a program within the year, up from 18 percent the year before.
For further findings or to download the Industry Outlook, visit here.