Non-cash Incentives Market Continues Growth
A new Incentive Marketplace Estimate Research Study released by the Incentive Federation indicates the non-cash incentives market has grown 17 percent since the last market estimate study in 2013. With 84 percent of U.S. businesses spending $90 billion annually on award points, gift cards, trips and travel, and merchandise, the study also found that overall the businesses spend $14.4 billion annually on incentive travel and $75.6 billion on award points, merchandise and gift cards to reward sales staff, employees, channel partners and customers.
The latest study also reveals that a third of this marketplace is driven by smaller businesses ($1 to $10 million in annual revenue), whose budgets may be tighter, but whose total volume generates $29 billion a year, and firms with up to $100 million in revenue accounting for 84 percent of the total spent on non-cash incentives. Conducted in partnership with Intellective Group in St. Louis, the purpose of the study was to collect data from a national sample of nearly 1,400 business executives in order to estimate the current size and characteristics of the non-cash incentives marketplace.
Respondents were asked what types of non-cash awards were used in their various programs. Here the methodology differed from the 2013 study, in a manner that very likely increases the resulting market estimates. In 2013, as in previous iterations of the study, award types were defined in two categories: incentive travel and merchandise/card. In 2015, the study was updated to more accurately reflect the proliferation of award points and gift cards as the delivery mechanism for non-cash rewards, and included trips and travel and merchandise.
The study also revealed:
• Employees rewards and corporate gifts are the most prevalent forms of non-cash incentives with 72 percent of businesses having both types of programs.
• Non-cash sales incentive programs are present in three of five U.S. businesses, and non-cash customer loyalty programs are used in 45 percent of firms, while 41 percent of firms use non-cash channel programs.
Gift cards are the most prevalent reward type in all programs except customer loyalty, which has a similarly high incidence of award points.
• Trips and travel is highest within sales programs and lowest within customer loyalty. Merchandise use is highest in channel programs.
• The incidence of firms using non-cash rewards to thank clients, prospects, and partners increased by 36 percent from 2013 to 2015 – a 36 percent increase. The change was consistent across firm size. This increase is offset, however, by a decrease in reported spend in this category. The net impact of these changes is a larger number of firms utilizing non-cash items as appreciation, but a decrease in overall spend in the market – down 32 percent to $10.5 billion.
“This study reaffirms that the use of non-cash incentives has been and continues to be an important part of many businesses’ growth strategy,” said Melissa Van Dyke, co-chair of the Incentive Federation and president of The Incentive Research Foundation. “The growth in the use of non-cash incentives is an important signal that U.S. businesses value tangible incentives over simply using cash to recognize performance and loyalty.”
Prime Line Opens Production Hub
Prime Line expanded its Connecticut facility by adding a new state-of-the-art production hub to increase efficiency and provide additional support for its expanding same day and 24-hour rush service offerings. The event was commemorated with a ribbon cutting ceremony and reception attended by employees.
The hub includes long-time employees and experts in planning distributor orders in production. It is powered by Prime’s proprietary software that was recently enhanced to meet the increased demand of rush service, which Prime helped pioneer many years ago.
“We’re focused every day on streamlining the order process, connectivity with distributors and investing in people and technology that enable Prime to service our customers at a much higher level,” said Jeff Lederer, president and CEO. “Our daily order count continues to rise at both our Prime and Jetline facilities, and this new production hub further enables us to keep up with customer demand. This is essential to our growth as we continue to offer better and faster services such as free 24-hour and same day rush service. It’s all part of our goal to deliver the ultimate customer experience with Prime and Jetline.”
BIC Graphic Honored by Geiger
BIC Graphic announced it was honored with Geiger’s Award of Excellence. This award is given to their highest performing Production Partners, rating in what they call their “zone of affection.” The criteria is at least a 4.5 or higher rating out of 5, based on 2015 survey results and overall performance.
Gildan Acquires Peds
Gildan Activewear announced that it has signed a definitive agreement to acquire 100 percent of the equity interest of Peds Legwear Inc. for a $55 million. The acquisition is expected to close before the end of August 2016.
Peds is a marketer of quality foot apparel and legwear products, including ladies no-show liners, socks and sheer, and therapeutic hosiery sold mainly under the Peds® and MediPeds® brands to U.S. and Canadian retailers. The company currently generates annual sales of approximately $80 million.
“The Peds® brand comes with a strong heritage, particularly in the ladies category, and is a good complementary addition to Gildan's growing portfolio of brands,” said Glenn Chamandy, President and CEO of Gildan.