The world of incentives is changing fast. Whether it’s rewarding employees, incentivising customers, or motivating teams, the game has shifted. With economic fluctuations, evolving workforce expectations, and the rise of AI-driven personalisation, companies are rethinking how they design and deliver their incentive programmes.
We know that gift cards sit at the heart of a strong rewards strategy, but incentives go far beyond that. So, what’s shaping 2025? Let’s dive into the key trends that will define how businesses engage, reward, and retain their customers and employees.
Rewards that reach further than ever before
It’s time to think bigger when it comes to incentives. In 2025, businesses are moving away from just rewarding top sales teams - instead, they're rewarding everyone - customers, prospects and employees.
That’s why gift cards, merchandise, and experiences are becoming more flexible, allowing companies to tailor rewards to individuals rather than taking a one-size-fits-all approach. The best part? Choice-based systems are on the rise, meaning participants can choose the rewards that actually matter to them. No more “one reward fits all” thinking - it’s all about personalisation. 🎯
Incentive travel: new destinations, new experiences
The incentive travel space is evolving; people want experiences they can’t get anywhere else and they’re willing to explore new destinations to make that happen.
According to the latest research, 70% of buyers are looking at destinations they’ve never used before. Why? Because employees are demanding bucket-list, once-in-a-lifetime experiences, rather than the standard corporate getaway. Expect to see Mediterranean cruises, nature retreats, and ultra-personalised itineraries rising in popularity.
AI is shaking up incentive programs
AI is creeping into every corner of business, and incentives are no exception. But here’s the challenge, while AI is exciting, companies need to balance automation with the human touch. People still want incentives that feel personal, thoughtful, and meaningful, not just driven by an algorithm. Businesses that get this mix right will win big. Here’s some tips on how to do this:
🔹 Use AI to tailor rewards to individual preferences: AI-driven insights can analyse past behaviour, purchase history, or engagement levels to offer highly relevant and meaningful rewards.
🔹 Leverage generative AI for personalised messages: Automated thank-you notes, milestone recognitions, or tailored promotional offers can add a human touch to digital incentives.
🔹 Create AI-powered gamification elements: Reward structures that adapt based on user interaction levels can make engagement fun and dynamic while maintaining personalisation.
🔹 Balance AI with human oversight: While AI is great for automation, ensure there’s still a human review element to keep interactions and rewards genuine and thoughtful.
Budget pressures mean flexibility is key
Incentives need to work, even when budgets are unpredictable. Across North America, there’s been a drop in spending on physical rewards and on-site gifting. But here’s the twist - businesses are leaning into more flexible options like digital gift cards.
Meanwhile, in Europe, spending on merchandise incentives is actually increasing - with companies upping their budgets per reward from €174 to €232 in 2024. Whether spending is rising or falling, the real trend is clear: businesses need flexible incentives that can scale up or down. And that’s precisely where gift cards shine.
Sustainability is shaping the future of incentives
Sustainability isn’t just a nice-to-have any more, it’s an expectation. Forward-thinking brands are already making changes, like:
đź’ł Switching to digital gift cards (zero plastic waste here)
🌍 Reducing long-haul travel for incentive trips
🌱 Offering sustainable reward options, like eco-friendly products or charitable donations
đź’§ Introducing reusable gifts (goodbye, single-use plastic!)
European companies are leading the way here, with 33% already viewing sustainability as a long-term priority. If brands want to attract and retain top talent, they’ll need to make sustainability a core part of their incentive strategy.
On the Tillo Platform, we have brands like dots.eco that allow you to buy into sustainable initiatives like restoring the rainforest or coral reef. There’s no doubt we’ll be seeing more and more of these initiatives in the coming years.
Gen Z and Millennials want rewards their way
By 2025, Millennials and Gen Z will make up 60% of the workforce, and they’re rewriting the rulebook on rewards.
These younger employees value frequent, authentic recognition, not just a big reward at the end of the year. They also lean towards experience-led incentives, cutting-edge tech, and shareable, Instagram-worthy moments. To keep them engaged, businesses are shifting towards:
📱 Digital-first incentives, like eGift cards that integrate with mobile wallets
🎟 Personalised experiences rather than generic travel packages
👕 Branded merchandise that’s actually cool (think streetwear, not standard corporate swag)
The bottom line? If it’s fun, flexible, and highly personalised, it’s going to resonate with this new generation of workers.
What does all this mean for 2025?
We know that a successful incentive strategy isn’t just about giving rewards - it’s about creating connections, driving engagement, and boosting long-term loyalty. In 2025, that means:
âś… Adapting rewards to include all employees - not just sales teams
âś… Balancing AI efficiency with human-centred personalisation
âś… Offering flexible incentives that scale with fluctuating budgets
âś… Embedding sustainability into every rewards programme
âś… Creating experiences that truly engage Gen Z and Millennials
The incentive landscape is evolving fast - but the businesses that keep up will see stronger engagement, deeper loyalty, and higher performance.
Want to build a rewards strategy that actually works? Let’s talk. 💡
