News Analysis: Will Amazon Disrupt the Promo Industry, Incentive Field?

In a recent Counselor article, “Should the Promo Industry Be Scared of Amazon?” one answer comes in the subhead: “The ultimate disruptor is coming for the middleman.” Although written for the promotional products field, the article’s general conclusion applies equally to the rewards and recognition business. The greatest risk is to those resellers who fail to add value in terms of program design and personal support, or to those suppliers who rely on resellers who fail to provide these services.  

 

The gist of the Counselor article is that the field faces another threat of big disruption posed not only by Walmart with its launch of PromoShop, but by Amazon.com, which has already entered the promotional products marketplace with Amazon Custom service. While these services tend to focus on the consumer marketplace for imprinted products, except for one skeptic who believes Amazon has bigger priorities, most observers quoted believe Amazon will continue to expand based on its relationships with over a million business customers. While those interviewed had varied views on the nature of the threat or impact, almost all agreed some disruption was inevitable – and the same applies to the rewards, recognition and business gift program field. 

 

Amazon is already a major part of the rewards market with its popular gift cards, and companies can buy gifts and rewards in bulk through Amazon business or implement online connections to reward catalogs through Amazon web services. Because the various business units that touch the rewards and recognition space don’t coordinate their activities or aggressively promote them, Amazon’s role in the incentive marketplace remains low-key, at least in comparison with its original launch into the marketplace when it used to actively promote access to its feeds for reward catalogs until that effort was shuttered several years ago. That said, it is inevitable that Amazon will leverage its access to business customers to expand its offerings in this field. 

 

So what do innovative promotional products distributors say about the threat? The article provides answers that apply equally to the business of rewards and recognition. Those quoted in this must-read article give such advice as:

The promotional products distributors like those quoted in the Counselor survived the first onslaught of the Internet in the 1990s, when the field was abuzz with the doom and gloom of looming disruption, only to see that threat go away with the death of one Internet startup after another. 

 

The rewards and recognition field now has almost 20 years of research showing that most organizations fail to gain the greatest benefit from non-cash rewards through a fundamental lack of understanding of their role in the overall engagement process or how best to utilize them. Those reward companies that understand the role of branded non-cash rewards and how to add value in terms of reward selection, personalization, customization and experience in a way that is not easily scalable for the mass-merchandisers will survive, just the way distributors survived the first onslaught of online disruption. The major threat to reward suppliers in this field is the one that already exists -- that is, the failure to recognize and apply the research proving that when properly utilized as a one-to-one medium and as part of a well-designed program, rewards have an unparalleled emotional impact. 

 

Learn about the latest research at: Art and Science of Engaging Rewards.