Merchandise award experiences on incentive trips — the type pioneered by Maui Jim sunglasses — are having a big impact
One big change in the Incentive "2016 Merchandise IQ" survey was the growing number of incentive planners who are using merchandise awards as part of an incentive travel program. The number of respondents who used merchandise in their travel programs -- many of them likely via the increasingly popular "merchandise bars" in which attendees select an award like sunglasses or a watch from an array of choices at an event -- rose from about 40 percent to half this year.
By the same token, the number of incentive planners and executives who say the name brand of a merchandise award is "very important" grew from 29.3 percent in 2015 to 36.6 percent in 2016, with the change coming from those who previously considered it "somewhat important."
The number of programs targeting consumers and non-sales employees both dropped about 20 percent, while those targeting salespeople grew about 10 percent. Dealer channel programs were up about one percent.
The average per-attendee budget rose in the lowest (under $50) and highest (more than $1,000) categories, while declining slightly in the mid range ($50 to $999). The exception was the $500 to $999 range, which was down two-thirds.
Switching from Travel to Merchandise
It's worth noting that while the number of respondents who replaced an incentive travel program with merchandise rewards grew only slightly, from 15.4 percent last year to 18.1 percent this year, the reasons why were very different.
First off, the respondents who cited budget constraints jumped from about 32 percent last year to 50 percent this year. Second and most notably, public perception concerns about incentive travel dropped from a little more than 10 percent in 2015 to zero in 2016.
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So merchandise is replacing travel programs to keep budgets down but public perception issues -- the AIG Effect -- are not a factor.
This article appears in the May/June 2016 issue of Incentive.