Incentive's 16th Annual Industry Roundtable: Merchandise

Popular products and how to incorporate merch with travel

Trevor Hanks of 3 60 Destination Group

Every year, Incentive gathers a group of professionals from all sectors of the motivation, recognition, and engagement business to talk about the state of the industry. This summer, 12 participants gathered at the spectacular Langham Place, New York, Fifth Avenue to discuss topics including the growing focus on return on experience (ROE) over return on investment (ROI), changing views of the impact of Millennials, and the growing attention paid to security, as well as what's happening in the merchandise, gift card, and travel awards categories. What follows are highlights of that discussion. One additional point: This conversation took place before the devastation of hurricanes Harvey and Irma, so comments in the travel section do not reflect their impact on those destinations.

This is part three of a four-part article. The other parts can be found below, and one-on-one video interviews of Roundtable participants can be found here.

• Part 1: The State of the Incentive Industry
• Part 2: Travel
• Part 4: Gift Cards


How Are Merchandise Awards Changing?
Paul Lapin:
 From the retail market perspective, there's so much change in technology and in consumer buying habits. We see brands that have traditionally been strong mass-market brands that are not the taste of the consumer any longer. Marketing efforts are more personalized, more curated in their messaging. That has to be reflected in the product mix. All of these factors have led us to change our model, from a merchandise perspective.

Having real knowledge of the recipient of the reward allows you to be more specific. So, we have to have a wider array of selections, and choices, and ways to engage consumers. And it's not solely with merchandise any longer. It's how do we personalize that product? How do we create a personalized message when it's delivered to that person? How do we get it at the event versus just a traditional catalog program? Technology allows us to do a lot of that engagement. You can be much more dynamic and nimble in adapting to what your client's needs are, and what the retail market is.

Jeffrey Brenner: For incentive recognition, what we have found over the past three or four years is the more traditional award with the logo on it is moving out of the industry. People want something more unique or customized, or art glass -- color-focused pieces, things someone would actually put out in their home and not feel like they are putting the brand of the company they work for or who is recognizing them out as well.

What Are the Hot Product Categories?
 We are seeing the Amazon Echo Dot going nuts. Everyone wants one. It's a whole new interface concept. People are excited about it. Home automation is just starting so it's hard for people to put everything together. You have the Apple ecosystem, you have the Google ecosystem under Google Home; you have got several different technologies, and I think that is creating some pause.

Drones continue to grow as the price point is coming down. Initially that was a higher-ticket item, but it's getting down into an area we more commonly ship, so we definitely see that picking up. We saw a real surge in the wearables, but that has started to cool a little bit now. Most people have a Fitbit or Garmin and it's sitting in their drawer. I think we will continue to see interest there amongst things like smart watches.

Lapin: Without a doubt, that has reinvigorated our watch business, and we see the Garmins doing a better job of improving their fashion, so I think that is going to broaden their audience.  

Merchandise Awards in Travel Programs
 We see the need for merchandise to add value to a travel experience, where the invitee gets to select an award from an array of products. That has been a trend that we have been seeing.

Brenner: It's going to be something they can easily travel with: a watch, a pair of sunglasses, a scarf, a bag, something like that. What is critical is bringing retail brands that people are excited about. It will be an experience -- a watch fitting or sunglasses fitting at the event, a handbag experience -- instead of having a room gift, or something already pre-picked for you. There's engagement in being a part of that experience: "I really want to pick these sunglasses because they speak to who I am, but I know there are 40 other unique individuals that are part of the organization, the company." Maui Jim sunglasses was probably the first to coin the phrase "experiential," and really set the standard.

They do drop-ship if there are size considerations, or something like that. From an awards standpoint, there is the difficulty of carrying glass through security -- it shows up as black in your luggage X-ray. End users will have one or two samples at an event, and we will ship the awards domestically after everyone's returned. Some of the incentive houses or end users who are more creative may do a piece of Tumi luggage. They will send it pre-trip, maybe with an award recipient's initials on it, so [participants] can use it on the trip.