Merchandise Awards Remain Strong

Recognition and reward program managers say budgets are rising and brand is key

According to Incentive's 2018 Merchandise IQ survey, incentive program managers continue to see merchandise awards as a key and vital part of their recognition and reward programs, with 45 percent saying their annual budget for merchandise awards is increasing in 2018. And 11.1 percent are seeing an increase of at least 10 percent. That's compared to just 4.3 predicting any decrease.

Employee recognition remains the top reason companies use merchandise awards, accounting for nearly three fifths of the respondents. Increasing sales came in fourth at 41.3 percent. It was behind customer loyalty (46.6 percent) and thanking employees (42.4 percent). Building morale and job satisfaction (37.5 percent) rounded out the top five.  

More than three quarters said the brand name of the award is important.

Here are the full results of Incentive's annual Merchandise IQ Survey for 2018:

What is your company's annual budget for merchandise awards in 2018?
Less than $10,000 48.6%
$10,000 to $24,999 7.8%
$25,000 to $49,999 9.9%
$50,000 to $74,999 5.7%
$75,000 to $149,999 7.1%
$150,000 to $249,999 4.6%
$250,000 to $499,000 6.4%
$500,000 to $999,999 2.5%
$1,000,000 or more 7.4%      

What percentage of your company's overall annual budget for incentive and recognition rewards is allocated to merchandise awards?
10% or less 68.8%
11-25% 15.4%
26-50% 6.8%
51-75% 5.4%
76-99% 1.8%
100% 1.8%

On average, how much will you spend on merchandise awards per recipient in 2018?
Under $50 38.4%
$50 to $99 23.7%
$100 to $199 17.3%
$200 to $499 6.0%
$500 to $999 5.0%
$1,000 to $1,999 3.2%
$2,000 or more 6.4%

How much of a change is this from last year?
Up to 5% increase 24.6%
5-9% increase 9.3%
10-24% increase 6.4%
25-49% increase 3.6%
50%+ increase 1.1%
Same/No change 50.7%
Up to 5% decrease 1.8%
5-9% decrease 0.7%
10-24% decrease 0.4%
25-49% decrease 0.0%
50%+ decrease 1.4%

Who handles your merchandise program?
C-Suite (CEO, COO, CMO, etc.) 32.7%
Sales vice president 5.3%
Sales manager 11.4%
Marketing vice president 6.1%
Marketing manager 18.6%
HR vice president 1.9%
HR manager 7.6%
Office manager 12.6%
Executive assistant 3.8%

Where do you get your merchandise awards?
Online 57.5%
Print catalog 34.4%
Promotional product/ad specialty distributor 28.6%
Retailer 26.0%
Manufacturer's rep/distributor 22.0%
Reseller 15.8%
Manufacturer's special markets dept. 15.8%

Do you use merchandise in your travel programs?
Yes 35.0%
No 65.0%

Do you plan to replace any of your incentive travel programs with merchandise rewards in 2018?
Yes 20.9%
No 79.1%

Why do you plan to replace some or all of your incentive travel programs with merchandise rewards in 2018?

Budget constraints 55.4%
Management's safety/security concerns 23.2%
Attendees' safety/security concerns 8.9%
Avoid bad publicity/public perception issues 12.5%

Do you plan to replace any of your merchandise rewards with incentive travel programs in 2018?

Yes 15.1%
No 84.9%

Why do you plan to replace some or all of your merchandise rewards with incentive travel programs in 2018?
Increased budgets 41.1%
Management's safety/security concerns about travel decreasing 33.3%
Participants' safety/security concerns about travel decreasing 12.8%
Concern about bad publicity/public perception issues decreasing 12.8%

Which of the following audiences do your merchandise awards target? (Select all that apply)
Consumers/customers 55.8%
Salespeople 45.9%
Non-sales personnel 34.3%
Dealers/distributors 12.7%
Other 6.0%

What objectives do you set for using awards?
Employee recognition 59.4%
Build customer loyalty 46.6%
Thank employees 42.4%
Increase sales 41.3%
Build morale/Job satisfaction 37.5%
Improve customer service 29.3%
Client gifts 29.3%
Service awards 24.7%
Improve employee loyalty 21.6%
Increase market share 14.8%
Recruitment/increase retention 13.1%
Build traffic to website 11.0%
Foster teamwork 10.6%
Introduce new products 9.2%
Sell new accounts 8.1%
Improve employee health/supplemental healthcare benefits 7.1%
Improve safety 6.0%

Which of the following merchandise awards do you offer? 
Apparel 48.2%
Food & beverage 40.4%
Books, music, movies 29.8%
Desktop/Office accessories 28.2%
Electronics (valued under $100) 27.8%
Plaques/trophies 24.7%
Electronics (valued $100-$499) 22.0%
Writing instruments 21.6%
Watches/clocks 16.1%
Memorabilia 15.7%
Cameras 14.5%
Luggage 14.5%
Sporting goods 14.5%
Tools 14.1%
Computers 14.1%
Outdoor/leisure equipment 13.7%
Appliances 12.2%
Leather goods 11.8%
Jewelry 11.4%
Cookware 11.0%
Crystal/tabletop 11.0%
Toys/games 10.2%
Electronics (valued $500-$999) 9.8%
Electronics (valued over $1,000) 6.7%
Home furnishings 6.7%

How important is the brand name of the award product?
Very important 29.7%
Somewhat important 46.6%
Not at all important 23.7%

What other factors influence your merchandise selection? 
Price point 63.4%
Perceived value 47.0%
Program goals 33.1%
Popular trends 32.7%
Ease of fulfillment 32.7%
Audience demographics 25.3%
Other 1.4%