Merchandise and gift card spending is showing more signs of growth, according to a new study conducted by the Incentive Research Foundation (IRF). Data reveals that 40% of program owners planned to increase their budgeting this year – encouraging stabilization after gift card budgeting declined from 2011-2013. In addition, individual spending is increasing, with 55% of planners aiming to spend over $100 per person. “Barring unforeseen economic or extreme political changes,” the study reported, “the Incentive Research Foundation anticipates budgets to maintain a strong positive trajectory for the next few years.”
According to the study, half of program owners and suppliers feel the economy is having a positive impact on merchandise and non-cash programs. The most desired items in gift programs continue to shift, and their value continues to increase. The IRF found that electronic and open gift cards were the top choices of providers, compared to housewares and apparel at the height of the recession in 2008-2009. Figures from the IRF survey also showed that sensitivity to extravagance has fallen to pre-recession levels.
Among other key trends, the IRF noted that merchandise and gift card programs will be crucial to retention, given that the workforce will shrink once Baby Boomers retire. “Leaders must now not only attract and retain high performing Gen X’ers,” reported the study, “they must also entice Baby Boomers to stay longer and ‘train up’ Millennials to fill the gaps.” The study also found that as employees are asked to cover additional roles, non-cash awards are a “key strategy in motivating employees to do more than just their ‘regular jobs.’”
Finally, the study cited the importance of having programs available to work on mobile devices and configured across multiple platforms, and predicted substantial growth in wellness incentives going forward.