Here's a riddle for you: When does something sell itself? You may be thinking that's just an expression for when something is irresistible or necessary. But sometimes, the marketing for a product can be the product itself!
It goes by many names: Merch, Swag, Goodies, Promotionals, etc. And oftentimes it is so ubiquitous that we don't even think of the marketing behind the product. For example, do Nikes have their trademark "swish" logo on their shoes to let you know it is Nike, or to remind everyone around you of the brand, and encourage their purchasing of their products?
That's the beauty of Swag...it's both subtle and covert, quiet and ostentatious. I can't think of a more paradoxical form of marketing than putting a logo or name on a product in order to raise awareness of its creator.
Band/Artist merchandise is a great example of this. Seeing someone with a musician's tour dates tells us a lot: whether we have musical tastes in common, whether they attend concerts...but also when WE can attend those concerts, or a simple reminder to check that musician out online or at the record store (those still exist, right?).
It's not just clothing and music. Law firms have refrigerator magnets (that may be cheating, since they are free), every other company seems to have shirts or mugs or beer cozies. Everyone knows at least one bachelor pad with a beer neon sign, and if your brand is political, there's a guaranteed bumper sticker involved. In japan, both free and not-so-free tissues are emblazoned with businesses.
There are a million ways this can be used, and should be used. After all, any form of marketing that makes money while it creates customers is a win-win any way you slice it.