By Hollis Thornton, President, IGCC
The US corporate gifting market is expected to increase $64 billion during the next three years — to a staggering $306 billion*. What’s projected to be the largest impact on corporate gifting industry growth in the coming years? Employee engagement. At least, that’s what conversations and several sessions shared at the Incentive Marketing Association Summit 2022 in Snowbird, Utah, as did a recent IFI survey, that found employers are spending more than $40 billion each year on employee incentives**.
It seemed many sessions and hallway conversations were all talking about the same thing — The Great Resignation — and how more and more, companies are looking for ways to hold on to good employees, and how that will contribute to the corporate gifting market growth in such a short time. Lucky for us (aka my fellow incentive industry peers), one strategy is through employee incentives. And why not? For example, we know the days of Americans viewing gift cards as impersonal or thoughtless gifts are long gone. And companies are wise to this development. A recent IRI study shows that corporations spend the most on gift cards compared to other types of corporate gifts (the study even shows which gift cards corporations like to distribute most)**. Gift cards deliver an experience and consumers like that they give the opportunity to shop for the perfect reward***. After all, employees are consumers.
Here are a few highlights of those sessions/conversations:
- More touchpoints are needed than ever before to motivate employees and keep them engaged. Companies are getting creative with the benefits and ongoing rewards to keep the remote workforce happy.
- Top recognition moments include work anniversaries, project completions, end-of-year surprise/delight moments, achieving a goal, and as a reward for a successful period or quarter-end results***.
- 51% of recognition frequency should happen at least monthly or quarterly***.
- Employees desire rewards of all sizes***
- 63% of those surveyed want a large reward for project achievement or completion
- 49% desire a large year-end reward
- 37% appreciate small rewards to celebrate birthdays, anniversaries, etc.
- 32% would like to earn points for recognition to save/redeem
With this type of growth, I’m sure you are wondering how you fit in and how you can get your share of this growth. Here are a few suggestions:
- As a merchant with gift cards: Be sure you have an easy online ordering system for bulk sales — have you walked through it lately and pretended to be a customer? Also, think about creative packaging solutions (physical and digital) for a true gifting experience for your small to medium size direct B2B buyers who will be immediately distributing your gift cards to employees. We heard from more than one national merchant on IMA Summit 2022 panels that they are already seeing an uptick in these types of requests from direct buyers.
- As a service provider/program manager: According to a study by the Incentives Research Foundation in 2021, corporations are reporting a dramatic increase in employee rewards-related budgets AND respondents intended to increase the use of third-party providers. They are even leveraging multiple incentive vendors as contingency planning to combat potential supply chain disruptions. Time to get focused with your marketing and sales strategies!
- Vendors of gift card merchants or program managers: Strap in and get ready for the increased demand. Help your clients navigate through potential supply chain issues and brainstorm on innovative solutions.
As an employer or leader (which applies to all of us): Make sure you are offering compelling, ongoing incentives that are curated correctly for the reward/recognition event and the recipient.
There’s opportunity here for all of us if we are strategic and proactive. I personally can’t wait for the presentations and discussions at IMA Summit 2023 in Boston. What will be the next innovations in the incentives gift card industry? How will your organization fare and what will be the size of corporate gifting in 2023? Time will tell.
*Source: Coresight 2021 research, Unwrapping the American Corporate Gifting Opportunity
**Source: Incentive Federation Inc. 2002