Merchandise
IQ Report
An interesting fact was noted by the recent Incentive
Magazine “2017 Merchandise IQ” research study.
9% of companies responded that they had decreased their budgets for
brand named merchandise over the prior year.
In combination with a corresponding decrease of 5.3% last year, there
has been almost a 15% decrease in this budget item over two years.
Frankly, that is very disturbing to incentive merchandise
manufacturers as this category of award has been the backbone of the industry for
decades, and they have spent millions in advertising and promoting it. By design it was also the single highest
profit category of any award in the industry and if this trend continues, the
manufacturers, their wholesalers, distributors and incentive companies will
have to look for other ways to shore up their profits.
So why is this happening?
Some feel that it is because of the shift of award budgets from growing
sales to improving employee performance and building employee loyalty. In addition, the emphasis that the human
resource professionals have placed on employee engagement is starting to pay
off. Most believe (without much
empirical evidence to support the conclusion) that improved employee engagement
does result in incremental revenue and profit.
Unfortunately for some, the predominate award category in
employee recognition efforts is gift cards…which for incentive companies are
also the single lowest profit award category in the industry. Correspondingly you can expect an increased
effort on various pricing schemes for gift cards to improve their
profitability. The ubiquitous “points” programs will be the most dominate
scheme, so caution is advised to closely analyze the “points needed” for any
gift card…usually an easy calculation as with gift cards the value is readily
apparent.
Some questions and data from the “Merchandise IQ” that
supports some of these conclusions are:
Audience
|
2016
|
2016
|
Consumers
|
52.6%
|
44.1%
|
Salespeople
|
50.2%
|
51.8%
|
Non Sales Personnel
|
37.7%
|
30.8%
|
Distributors/Dealers
|
14.5%
|
15.4%
|
Other
|
7.45%
|
14.7%
|
What Are the Top Five Objectives You Set for Using Awards?
Objective
|
2016
|
2015
|
Employee Recognition
|
58.0%
|
56.3%
|
Employee/Client Gifts
|
51.0%
|
35.9%
|
Employee Satisfaction
|
43.1%
|
36.6%
|
Build Customer Loyalty
|
40.1%
|
42.3%
|
Increase Sales
|
38.8%
|
47.2%
|
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Ultimate Choice Inc.’s products or services or other white papers please
contact us at Ultimatechoiceinfo@cox.net
