Implementing Point-of-Sale (POS) Marketing Management – As Easy As 1, 2, 3
In response to questions regarding what it takes to implement OnTrak’s premier application, SignTrak, we asked our Product Development Manager and Chief Technology Officer (CTO), Rick Flagg *, to write an overview of the implementation process.
Our implementation process – and meeting our customer’s requirements – is the subject of this week’s blog.
As you may know, all OnTrak Software application’s (SignTrak®, PermaTrak®, MenuTrak™ and SampleTrak™) are web-based programs that only require a user to have an Internet connection a web browser such as Internet Explorer or Safari on PC or tablet.
Execution of all OnTrak software solutions, and access to your POS Marketing data is ‘cloud based’ or ‘on-demand’, and available any time, any place and anywhere you need the information.
The overall steps to prepare for a SignTrak implementation are simple to follow.
Step 1 – Load The Data
The most time-consuming task for the implementing distributor is the initial data load which requires our customer to provide account, product and user data for import into the SignTrak database. If the distributor uses VIP or Encompass route accounting software, the process is very easy. OnTrak has tools available to access VIP’s applications back-office data; and, Encompass has a built-in routine to push the needed data to SignTrak. If the distributor does NOT use one of these two packages, then an additional bit of up-front work is required.
Since SignTrak allows POS materials for specific products and customers to be ordered and tracked, SignTrak needs to know your POS types and costs, and your supplier, brand and packaging for every product that is warehoused and sold. For accounts, information such as customer name, number, address, sales route and the primary sales representative that calls on the account and supervisor responsible for the account is needed for the order entry process. The data from your route accounting system needs to be in a data format such as that from an Excel spreadsheet file. OnTrak implementation consultants can provide technical details as appropriate for preparing your data files. Our customer’s work for implementation is now finished.
Step 2 – Build a Unique Customer Website
Once our customer’s data is available, OnTrak implementation consultants start to work. We will create a unique website for our new customer. If needed, we will also create a File Transfer Protocol (FTP) site for routine, automatic regular transfer of product and account data. Initial copies of all requisite databases will be created, and the initial data provided from the distributor will be imported into SignTrak.
Next is an online system configuration session with our new customer to begin selecting system parameters and settings. System parameters determine which portions of SignTrak’s functionality will be used. For example, if your orders for signs costing over $50 require approval before flowing to the Sign Shop, we’ll turn on the “approval required” feature and enter the approval required cost amount of $50. SignTrak has about twelve parameters that will need to be set up. Additional adjustment to these parameters can be made anytime.
During our online meeting there is an initial discussion about SignTrak’s configurable fields. Configurable fields control all of the dropdown boxes within the system. The contents of each dropdown are totally changeable for each implementation. There are about 35 dropdown fields available for configuration – this, too, is not a daunting task as you will likely only use a few of them for each POS type.
Step 3 – On-Site Training
The final portion of implementation is an on-site visit by one of our consultants. The visit is usually planned over two consecutive days.
On the first day, the system parameters and configurable fields are reviewed for a final time and adjusted as needed. The meeting time then shifts to training the Sign Shop and SignTrak administrators on the mechanics of SignTrak, order workflow and an overview of reporting. At the conclusion of the first day, the Sign Shop is ready to begin accepting and processing SignTrak requests.
The second day is training for Sales Representatives and normally drives the timing for the visit. At the conclusion of the second day Sales Reps will begin placing sign requests into the system.
To learn more about OnTrak’s products, please click the following button:
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* Rick Flagg can be reached at email@example.com
Using Point-of-Sale (POS) Marketing Tools to Increase Sales and Improve ROI
To be successful, Consumer Goods suppliers, distributors and retailers alike need marketing intelligence to determine what POS marketing initiatives work. This can be done by tracking shopper interactions with point-of-sale marketing materials, and correlating this interaction to sales results.
A key question is: During the period of time that the marketing materials were on display, were we successful in converting shoppers into buyers of our brands?
Or said another way: Was the investment made in POS Marketing materials offset by an increase in sales results?
These questions may seem obvious, but gaining this marketing intelligence is not easy. It requires a set of specialized software tools to collect and track the POS data, correlate the data to sales results, and determine if a positive ROI was achieved. Not an easy task if done manually.
Without the proper tools, it is very difficult, virtually impossible, to:
Track POS - Configuration, production, placement and location verification
Measure POS - Where and when POS was placed; the POS costs vs. sales results; and the sales impact of these marketing initiatives
Manage POS – Tools to accurately report on profitability, ROI and supplier recovery based on the data that is collected during the POS marketing process
If you and your enterprise rely on POS marketing programs to provide consistent, positive sales results, it is critical to gather and analyze the data to manage these programs. It is our contention that only by implementing and using POS tracking software will you ensure your POS produces consistent and predictable sales results.
As with any tool, the improper use or under-utilization of POS marketing software will almost certainly result in reduced benefits or failure. To ensure your POS marketing initiatives are providing you with the results you expect – a competitive advantage, an increase in market share, or an increase in sales – we urge you to not only use POS tracking software for ordering POS marketing materials, but also to gain a better understanding of what POS is most effective in producing your desired business results.
Generally speaking, one of the most beneficial, easiest to use, yet least utilized capabilities provided by OnTrak’s POS marketing management software is the correlation of sales results to the type, size, placement and cost of a POS display. By using this feature of OnTrak products, marketers can determine what POS marketing materials deliver the best results and, over time, can show how sales results can be improved.
If you are already an OnTrak customer, I urge you to consider using as many of the capabilities of our applications as possible. In other words, don’t limit your use of these systems to just the order entry and workflow features. Other benefits, including improved sales results, can be achieved when all the capabilities of the OnTrak products are utilized.
If you are not an OnTrak customer, I likewise urge you to adopt a system that will track, measure and manage all your POS marketing activities so you know your POS workflow is operating most efficiently. In addition, consider implementing a system that accurately tracks costs, sales results, supplier recovery (marketing co-op allowances) and profitability.
To learn how OnTrak products help deliver this information and improve your business performance, please click the following button:
Point-of-Sale Marketing - Core Competencies for Beverage Distributors
A Competitive Asset That Must Be Nurtured
There is at least some evidence that beverage alcohol companies, suppliers, wholesale distributors and retailers alike, think they’re in the entertainment business. While that’s not entirely a misrepresentation, the reality of the situation is that these companies really are in the business of manufacturing, distributing and marketing their brands and products. Moreover, due to the three-tier system enacted with the repeal of Prohibition, each tier has its customers clearly identified, even if it is true that the end consumer, sometimes called the fourth-tier, is the ultimate customer.
Because of the laws associated with the three-tier system, each tier has had its core competencies largely identified and defined for it. In this blog, we’ll take a critical look at the middle-tier, the wholesale distributor tier – Its historic and current functions and its shifting competencies requirements.
A core competency, or primary function, of the beverage alcohol distributor is logistics. More precisely, distribution logistics – the delivery of suppliers’ finished products to the retailer.
Distribution logistics consist of ordering and accounting functions, purchasing, warehouse optimization, inventory management, route planning and transportation. Distribution logistics is a core competency because it is a critical function of a wholesale distributor. If distribution logistics are not expertly planned and executed, a distributor simply will not survive. Most distributors use sophisticated software to help them with distribution logistics, typically called the ‘back office’, ‘route accounting’, or ‘distribution requirements planning and execution' systems.
Another core competency of the middle-tier is Marketing at-Retail. (Note 1)
This in large measure is due to the shifting of emphasis from traditional media marketing to at-retail, shopper or point-of-sale (POS) marketing and promotions. No longer are distributors simply in the business of order taking and delivery (demand fulfillment). Today, distributors are expected to generate retail demand; and one of the most effective marketing tools in a distributor’s arsenal for generating sales is POS Marketing (Note 2).
If you believe that POS marketing is one of a distributor’s most powerful marketing and sales tools, you should also come to the conclusion that the tracking, measuring and managing your POS marketing activities is, or should be, a core competency.
Since the repeal of Prohibition, beverage alcohol distributors have relied on POS materials (signage and displays primarily) to advertise the retail prices of the products they distribute. Yet beyond ‘price per’ and the mention of specific events or portrayal of seasonal themes, POS campaigns to this day have seldom been identified with any but the broadest of objectives - ‘sell more product’ or ‘improve market share’. Nor have these campaigns been designed and planned to meet these objectives. The ROI or impact of POS promotions is rarely measured.
How Did We Get Here?
Part of the reason for the current ‘ready, fire, aim’ POS marketing approach by distributors has been the availability of tools that only order POS, and the lack of tools to track, measure and manage POS.
This lack of using POS management tools starts with sales management practices that have been built over decades. Beverage alcohol distributors, often family enterprises, were said to be members of an apparently privileged club with a virtual license to print money. Distributor’s management teams, often made up of the children and grand-children of the founders, were resistant to change and most owners were the envy of many in their communities.
Over time, each successive generation has risked becoming less relevant and more obsolete due to their reluctance to adapt to change and adopt new approaches to running the business. Yet, due in large measure to distributor’s protected territories and franchise laws that favored distributors over suppliers, these operators made good money – even as they continued to become less and less relevant with each passing year.
Where Are We Going?
Today, due to years of living and defending the status quo, some distributors are again facing the threat of another round of involuntary consolidation – or perhaps worse, atrophy (Notes 3, 4). Meanwhile new brands and products continue to be introduced into what many already believe is an overcrowded market. Suppliers, looking for both increases in sales and a reduction in marketing expense, are unwilling to continue the free-spending POS allowance practices of yesteryear. Suppliers are requiring their distributors to be accountable for POS marketing spend. Suppliers want their distributors to tell them what POS campaign dollars were spent on their products and what the sales impact was of that spending.
It’s no wonder that many beverage alcohol distributors, who want to retain and grow their POS competitive advantage, are adopting new POS marketing tracking technologies they believe will cut costs and increase POS marketing’s effectiveness. Once the decision has been made that POS is not simply a cost of doing business, but rather is a core competency crucial to the long-term survival and success of the distributor, the more quickly the distributor can begin to use POS as the competitive tool to retain and grow market share.
There Is a Solution
Start treating POS as more than signs, displays, samples and menus. Start now by considering your POS tracking as a core competency for marketing. Research and adopt software technology for the management of your POS initiatives with as much focus and care as you researched and adopted your distribution logistics software applications. Look for POS management software that is at least an order of magnitude more than a sign order-pad; and look for features that allow you to correlate product sales to attributes such as POS type, size, placement, retention, ethnicity and cost – The economic and measurable characteristics of POS.
To learn more about these types of technologies from OnTrak Software, please click this button:
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Note 1: POPAI – Point-of-Purchase Advertising International - http://www.popai.com
Note 2: “Making the Most of the Moment of Truth”; Millward Brown, July 2006 - https://www.millwardbrown.com/Libraries/MB_POV_Downloads/MillwardBrown_POV_MomentOfTruth.sflb.ashx
Note 3: “Draft Dodging: Why Big Beer is Going Flat”; Advertising Age, September 16, 2013 - http://adage.com/article/news/a-b-inbev-millercoors-losing-share-fix/244178/
Note 4: “What’s Wrong With Miller Lite?”; Advertising Age, August 2, 2011 - http://adage.com/article/news/miller-lite-sales-decline-analysts-point-marketing/229059/
Six Disruptive Demographic Trends and the Impact on Beverage Alcohol Marketing
Those of you who attended the NBWA 76th Convention and Trade Show’s General Session, Monday September 30th were treated to a fascinating, prescriptive and perhaps even disturbing speech by James H. Johnson Jr., Ph.D., a Professor of Entrepreneurship and Strategy at the University of North Carolina at Chapel Hill. His entertaining speech was derived from his 2011 publication: “Six Disruptive Demographic Trends: What Census 2010 Will Reveal”.
Like most subject matter experts, Johnson’s Demographic Trends were originally intended for the broadest possible audience, not a group of some 4,000 beer distributors, per se. However, Johnson clearly had taken some time and effort to relate the “Six Trends” to his NBWA audience. Even without drawing conclusions relevant to wholesale beer distributors, it would have taken little effort to see how the demographic trends Johnson discussed related to the beer and broader beverage alcohol marketplace.
According to Johnson, “As. . .data from the Census 2010 are released over the next several years . . . expect six disruptive trends of the first decade of the new millennium to be confirmed.”
In case you missed them, the six demographic trends Johnson identifies are:
The South has risen – Again - Population growth, moving from “everywhere” – and moving to the South
The 'Browning' of America - The rise of the Hispanic, Asian and other Non-whites
Marrying Out is 'In' - Marriage across racial and ethnic lines is on a tear
The Silver Tsunami is About to Hit - The graying (aging) of the native-born population
The End of Men? - The end of male economic dominance
Cooling Water from Grandma’s Well – and Grandpa’s Too! - The growth of grandparent-headed households raising grandchildren
Of course, during the presentation, Johnson would introduce one of the above six trends and discuss its impact on US consumer markets and workplaces as well the challenges posed for the US’s future competitiveness in a global marketplace. There are clear implications for beverage alcohol marketing and distribution for each of the six trends.
In the interest of moving our point along, I’ll not recap Dr. Johnson’s presentation in any further detail. However, if you would care to watch Johnson’s speech, I was able to find the almost identical speech here on the web: http://vimeo.com/70036067
Most Desirable Customers
While listening to Dr. Johnson’s NBWA discussion, I was reminded that in addition to the potential impact for NBWA members of these six disruptive trends, that there are still three groups of “most desirable” consumers, defined primarily by their birth years:
'Baby Boomers' – those consumers born between 1946 and 1964
'Generation X' – consumers born between 1965 and 1981
'Generation Y' (also known as Millennials) – consumers born between 1982 and 2000 – Also the most desirable of all because they represent nearly $200 billion in purchasing power
The Challenges for Beverage Alcohol Distributors
Hearing Dr. Johnson and knowing about the above three generational consumer groups it began to dawn on me just how daunting a task it is to market beverage alcohol to so many divergent groups. Traditional media (TV and print) may be consumed by most Baby Boomer’s and many Gen Xer’s, but the most prized consumer group these days are the Millennials, who are often “unreliable” users of traditional media, choosing other media forms and formats instead. Furthermore, Dr. Johnson’s disruptive trends do serve to point out how much traditional media is unable to connect with growing population segments who find much of traditional media irrelevant to their past and present experiences.
For example, studies have demonstrated that Millennials are often not only brand apathetic, they are often brand agnostic. Indeed many Millennials may actively seek out products with “names you’ve never heard of.” Traditional media marketing, even if seen, will be unlikely to have much, if any, persuasive message for Gen Y’s.
Today, consumers representing at least two different generations, gen X and especially gen Y, take their buying cues from two primary areas: Social media and point-of-sale (POS) materials. POS serves to introduce and explain the benefits of consumer products (including beer) and social media serves up “unbiased” reviews (known as user generated content or UGC) from trusted sources (Facebook posts, tweets, etc.)
Did You Know? – Breweries Are Exploding
One more thing I learned thanks to the NBWA: There are currently about 1,000 new breweries, in various stages of completion, soon coming on-line. This means it is not unlikely that at least 3,000 new beers will be hitting the market sometime in the near future. Each one of these new craft beers will need distributor and marketing support. It is clear to me that as much we think we rely on POS today to educate and persuade shoppers to try a certain beer brand or product, we haven’t seen anything yet.
Clearly it will only become more and more important that we track, measure and manage POS, the most important marketing tool we have in our tool kits.
To learn more about how OnTrak can help you navigate your POS Marketing travels, please click this button.
Are You Trying to Manage Point-of-Sale (POS) Marketing Without the Proper Tools?
I’d like to use this week’s blog to address one of the largest – and growing – issues we frequently hear about when we talk with prospective users of our suite of point-of-sale (POS) tracking software tools.
Considering that we have found no other tools on the market today that provide the capability to track, measure and manage POS marketing campaigns, I will reference OnTrak’s products as I describe the consequences of trying to control POS marketing initiatives without purpose-built software tools.
The Home-Grown Approach
Excel spreadsheets and Access databases, for example, even if elaborately designed and developed, can provide only some of the features and functions of our software applications. Typically these ‘home developed’ solutions are designed for a single-user, like a POS manager, or cannot be executed from a web-based, cloud computing environment. Even when these spreadsheets or database programs are made available across many devices, the opportunity for user error is often very high since neither Excel nor Access provides a single point of control, leaving you with multiple versions of the ‘truth’.
So what are the ‘issues’ associated with attempting to control and manage POS marketing initiatives without the proper tools?
If you don't have the right (or any) POS tracking and measuring tools, your ability to control and manage your POS marketing – in terms of spending, sales impact, greater market share and ROI – is severely limited. In fact, without POS tracking and measuring tools, you’re basically positioning your beverage distribution business for sharply limited success – at best, or failure – at worst.
If you have a POS ordering system without tracking and measuring capability you have virtually no visibility to:
What brands or products are being promoted and when, or for which customers it has been placed, or
How much your POS costs were compared to sales increase during a particular POS marketing campaign.
The information to control or manage the POS initiatives that you count on to increase sales and grow market share.
The OnTrak Approach
All OnTrak solutions provide a single point of control for managing the entire point-of-sale marketing process; an electronic, paperless, workflow solution that eliminates errors and improves communications; and powerful analysis and reporting tools that deliver real-time business information at your fingertips.
OnTrak’s software tools give your sales, marketing and merchandising teams the ability to:
Track and lower POS costs by providing a single point-of-control for POS marketing management which dramatically reduces POS ordering and production expenses.
Speed POS time-to-market through a POS workflow system that improves communication, eliminates errors and provide a strong competitive advantage.
Increase supplier bill-back recovery with integrated analysis and reporting tools which deliver accurate and timely information to improve accountability with suppliers.
With better point-of-sale marketing management, our customers have been able to grow their businesses, prosper in today’s competitive environment, and dominate their segment of the market.
Since our first installation of POS Tracking Software in 2005, OnTrak Software has provided solutions to many of the top beverage alcohol distributors across the country. Our customers highly endorse and recommend our POS marketing management tools.
To learn more about OnTrak Software and our POS Tracking solutions, please click this button:
POS Marketing – The Centerpiece of Beverage Alcohol Distributor Marketing
POS Marketing Efforts should not be an afterthought
I’m going to assume that if you’re reading this blog and browsing our web-site, you already understand that traditional media marketing (TV, radio and print) is declining in its effectiveness and ability to provide a significant impact on sales.
One of the main reasons for this is that the “boomer generation” is no longer the majority of your customer base. Gen-Xers grew up on a lot less TV and read a lot less than boomers. Millennials, who have surpassed boomers in sheer numbers, have only known a world containing the Internet and pervasive, mobile communications.
Because of these demographic changes, beverage alcohol suppliers and distributors need to review and change how they think about marketing.
There are some beverage alcohol suppliers and distributors that view their POS marketing efforts as a ‘defensive’ strategy and expense. And some of our customers have even suggested that they could do-away with their POS promotions and sign shops, but only if they knew their competition would do the same. We all know that’s not going to happen.
On the other hand, a growing number of our customers and prospects are coming to the conclusion that POS marketing is a valuable investment. The point is: When beverage alcohol distributors allocate and focus their marketing dollars on POS marketing, they can expect a measurable, positive impact in sales results. However, it is important to track and measure the return on investment of your company’s POS.
Although price-point is a significant driver of beverage alcohol sales, there are other important drivers. For example, one of the reasons a shopper becomes a buyer of your beverage alcohol brand is that your POS doesn’t simply offer the “lowest price”. More importantly it informs the shopper about the unique aspects of your product, including superior packaging, and taste or food pairings.
This education is what differentiates your brand and makes your product the most attractive, which often translates into a sales increase. Beverage alcohol suppliers and distributors should think about the knowledge they have about their products and share it with their customers’ customers – the retail shoppers.
Of course, the last and best place to share this information with shoppers is at the point-of-connection between the shopper and the product. And the most impactful place to do this is on the point-of-sale materials placed in the aisle or with the product.
POS materials should be the centerpiece of supplier’s and distributor’s marketing efforts, and not an afterthought. By the same token, measuring and managing the impact of your POS marketing allows both suppliers and distributors to gain valuable data regarding what does and doesn’t work to convert shoppers into buyers
To learn more about how OnTrak Products track, measure and manage POS cost, the sales results, and the ROI of your POS investment, please click this button:
Retail Wars – At the Point-of-Sale - Big Beer vs. Craft Beer - Part 2
This is a continuation of a blog on the retail wars that are going on at the point-of-sale.
Big Beer Brands vs. Craft Beer Brands
As noted in Part 1 of this blog, you shouldn’t count the Big Beer Brands out – yet. – Even though Craft Beer Brands appear to be on an up-trend; at the same time Big Beer brands are on a slow down-trend. (See Note 1).
Although Craft beer seems to have the upper hand with its guerrilla warfare approach (word-of-mouth, social media and POS); don’t think that Big Beer can’t or won’t adapt. The current situation simply points to an increasing emphasis on a battlefield that is more focused in the trenches. That’s the battle to convert shoppers into buyers in the aisle, at-retail and at the point-of-sale, rather than on traditional media outlets.
POS Marketing History
Historically shopper marketing or Point-of-Sale (POS) marketing has been relied upon to “close the deal” at the point-of-connection between shopper and product. (See Note 2). Yet for almost as long as there has been 'retail', POS marketing has been at best perceived as an also-ran form of marketing and at worst a necessary evil.
When we’ve asked our initial beverage alcohol distributor prospects about their attitudes on POS marketing, some of them complained that POS was a 'black hole' where they threw money hoping something positive would happen. Notice I said 'some' of them complained.
Not so today
Over the past 7 years, we’ve seen the number of companies disappear that criticize POS marketing. To us, this is an indication that attitudes related to at-retail marketing programs (aka POS campaigns) have changed and are continuing to change dramatically.
Things Are Changing
Some of the reasons for this attitude change have to do with the nature of shopping itself today:
- Shoppers perceive they have virtually unlimited choices of places and ways to shop, and have very little loyalty to any of them.
- Many shoppers, particularly the very desirable millennial shoppers, are immunized against traditional media influence due to technology - 500 TV channels and an increasing apathy toward traditional media.
- When they do shop they actively seek product information in the form of POS marketing materials which have effectively become the newest form of mass media.
- And today it is not uncommon for shoppers to make frequent, single-purpose, shopping trips – each one requiring persuasive information at the point-of-connection between shopper and product.
Craft beer, initially out of necessity, couldn’t afford a national or regional traditional media marketing campaign. They relied on word-of-mouth, social media and POS marketing to promote their products. It has been unexpected that many big brand beer distributors are willing to invest in POS marketing for the craft brands they distribute.
Of course, the reason the traditional beer distributors are willing to spend on POS initiatives for the craft brands is that most craft beers have higher gross margins than the brands from the Big Two suppliers.
So now that craft has proven to be more than a flash in the pan, the Craft Brewers themselves are able to support their distributors POS marketing programs with bill-backs and ever improving co-op programs.
Both Big Beer and Craft have learned that the ability to effectively market at-retail has become vital. At-retail marketing can no longer be thought of as a necessary evil; rather it must be the foundation for all consumer goods marketing initiatives going forward.
The New Normal
The new-normal for Big Beer and Craft Beer marketing is to focus on the shopper where they can become a buyer and today that means make your mark at the point-of-sale.
Assuming the Big Two get passionate about POS marketing, I wouldn’t count them out. Of course it would also be helpful if, as the Huff Post says “. . . if the Big Two would develop new, better tasting beers or acquire more brands.” (See Note 1),
For more information on how OnTrak’s POS Marketing Management tools can give your marketing a competitive advantage, click the following button:
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Retail Wars - At The Point-of-Sale - Big Beer vs. Craft Beer - Part 1
My desk is a mess – it is covered with three days’ worth of the Wall Street Journal, copies of Beverage World and Shopper Marketing magazines and charts, graphs and articles printed off of multiple beverage and CPG websites.
My computer screen has multiple tabs open to the websites of Beer Business Daily (BBD), Consumer Goods Technology (CGT) and even the Huffington Post. Heck, I’ve got at least three white-paper printouts from places such as Pitney Bowes, A.T. Kearney and the Grocery Manufacturers Association cluttering my desk.
Yes, I have “information overload” strewn all over my desk, and computer screen while I’m typing this blog entry. What a multi-tasker!
Well it may look like a mess, but I call it organized chaos. Here’s how it came about.
The Future of Big Beer Brands
I recently saw a headline on the home page of BBD that posed the question (or perhaps even made the statement) “Are Big Beer Brands Dying?” I found BBD’s editor, Harry Schuhmacher’s 2011 article in the on-line version of The New Brewer via a quick Google search. Of course there were another 15 million “results” that Google turned up. Then I found among them the August 15, 2013, Huffington Post link that read “Craft Beer Output Could Eclipse Anheuser-Busch & MillerCoors. . .” well, I had to click on it.
Here’s part of what Huff Post had to say on the subject:
“Sales of craft beer have grown tremendously over the past five years, while sales of beer made by major brewing conglomerates Anheuser-Busch and MillerCoors stayed flat or fell. Recently-released data on the craft beer industry (← link) show that 2012 was an even better year for craft brewers than 2011, 2010 or 2009, all of which were strong. Last year, sales of craft beer grew 15 percent by volume, to 13,235,917 barrels, and 17 percent by value, to $10.2 billion.
Craft beer is still a relatively small part of the industry. Yet last year's annual reports for Anheuser-Busch and MillerCoors show that these two companies sold 6 percent less beer, by volume, in 2012 than they did in 2009. Basic geometry tells us that, if these trends continue, craft beer and the big two are on a collision course. At some point soon, in other words, craft brewers could produce more beer than the Big Two.”
What’s Does the Future Hold?
The article does suggest that it will likely be several decades before craft outpaces “the big two,” but the point is well-taken, the market for beverage alcohol, in this specific example – beer – is changing. The tide is turning, apparently, away from Big Beer Brands to Crafts with names like Abita, Alaska, Dogfish Head, Lagunitas, Saranac and Magic Hat.
I wouldn’t count the Big Beer Brands out yet, but it is clear that both camps are vying for many of the same retail customers – and this means the battle-field for the war will be “in the store”, “at-retail”, or “at the point-of-sale”.
We’ve gone over why the battle for buyers will be fought (and won or lost) at-retail in previous blogs - Things like channel explosion, DVR penetration and more frequent and shorter shopping trips.
So what can be done by both the Big Brands and the Little Brands to convert shoppers into buyers?
Go to Retail Wars - Big Beer vs. Craft Beer - Part 2 of this blog where we’ll discuss how brands can succeed (or fail) at the point of sale.
But to learn more about how OnTrak can help improve your point-of-sale marketing efforts, click this button:
Social Media vs. Point-of-Sale (POS) Marketing
Use the Right Tool to Increase Sales
Recently, while we were meeting with a large beverage wholesaler, the topic of Social Media as a marketing tool came up. The company’s representative described two types of customers he sees in the market today:
Those whose communications primarily consist of posting on Facebook, texting and Tweeting; and,
Those who believe in using the telephone, leaving voice-mail messages, emailing and snail-mailing, and sometimes texting but seldom Tweeting or posting on Facebook.
It seemed clear that this person was probably a true believer in Social Media as one of the key forms of product promotions. Never mind that when we checked on Facebook and Twitter that there hadn’t been anything posted on the company’s Social Media pages since last year; and that most of the handful of posts were more than two years old.
The State of Social Media
Despite this somewhat limited evidence of meager Social Media involvement between a beverage distributor, its products, and its shoppers, buyers and consumers, we decided we would dig deeper and embark upon a bit of secondary research to see what the state of ‘Social Media’ is with respect to promoting and increasing product sales.
My bias going into the research on the subject of the influence of Social Media upon beverage buying was that there would be much written about the many benefits of social marketing in increasing brand awareness and, more importantly, product sales. I thought I would find a whole host of reports based on primary research that would indicate Social Media was one of the new powerhouses of promotion, and that any Consumer Packaged Goods (CPG) company of substantial size and success would be a “member of the faithful” with respect to their belief and practice in the importance of Social Media as part of their overall marketing strategy.
Here is what I discovered.
Many, if not most, CPG companies do participate in some way in Social Media – from Facebook to Groupon to Twitter among others – and have been doing so for at least 2+ years. (Note 1)
Naturally, Facebook has touted its abilities to connect people, products and places. Others such as Groupon and LivingSocial also suggest their ability to drive sales through purchases of discounted goods and services via their email campaigns and websites. Even Angie’s List is arguably in the social buying game. My take on Angie’s, however, is that it has more in common with Consumer’s Reports than it does with social shopping or buying sites.
Social Media Technology Adoption: Two Years is a Lifetime
It is true that we’re clearly in the early stages of Social Media with respect to its ability to entice someone to visit a retail store, shop and buy a CPG product, such as a beverage product. The last two years of chest pounding and promotion proclaiming the ‘power of social’ for shopping and spending has been mostly underwhelming and disappointing. (Note 2)
One of the few Social Media outlets that do show a decent conversion to shopping behavior is Pinterest (http://about.pinterest.com). However, some social marketing experts regard Pinterest as merely a web-based shopping list, something more on the fringes of Social Media.
Meanwhile, during these same two years, we’ve seen a steady increase in the adoption of POS Marketing promotions (shopper marketing). As noted in the previous blogs, often this has been at the expense of other forms of marketing, notably traditional broadcast and print. We’ve even seen some instances where Social Media budgets were cut, but it appears this may have been temporary cuts in response to the Great Recession. (GM at one point in the last few years indicated it was cutting back on its Social Media budget, for example).
Overall, it appears that it’s too soon to celebrate Social Media as the Messiah of Marketing it promised to become only a few years back. But this does not suggest you should ignore it. Perhaps a prudent and affordable approach would be to use it sparingly to drive traffic to your website rather than to invest in Social Media primarily for the purpose of increasing sales.
Currently POS Marketing is a much better choice than social media if your mission is to increase sales.
Of course, we would advise that you can make the most of your POS investments if you track, measure and manage this powerhouse of promotion.
For more information on how OnTrak help beverage distributor increase sales with better POS Marketing management, please click this button:
Note 1: Shopper Marketing, Vol. 26, No. 3, March 2013 pp.: 72 – 73, “SO-LO-MO Central” and pp.: 74 – 76, “Social Buying and CPGs.”
Note 2: ibid pp.: 74 – 76, “Social Buying and CPGs.”
Traditional Media is a Sitting Duck vs. Point-of-Sale (POS) Marketing
The Shift from Print to Digital Print
My wife recently cancelled her subscription to Runner’s World. Her intentions, going forward, appear to be to subscribe to either the on-line paid version (which costs $5 less per year than the traditional printed version) or the on-line free version which she feels provides most of the same content.
Last year we cancelled our daily newspaper delivery in favor of a version we typically read on an iPad or a Kindle Fire HD (this is a paid newspaper subscription, by the way).
My wife’s arguments for dispensing with physical magazines and newspapers include such things as ‘briefcase real estate’. Since she always has her iPad with her, she now always has access to a growing digital newsstand complete with local and national papers and magazines – and besides she doesn’t have the room in her briefcase for the newspapers and magazines she consumes on a daily basis.
Skipping the Advertising
Another reason to cancel subscriptions to actual printed materials in favor of fee or free on-line digital versions (or apps, in some cases), is that the digital materials allow an ad-skip capability somewhat like the 30-second fast forward button on DVRs. No longer do readers find themselves having to “continue reading on page xyz” only to wade through several ads and putting up with those infuriating contact cards inserted in most magazines. Today readers can simply swipe their finger across the screen of their smart device of choice, instantly zipping by even full-page ads until they get to the rest of the story.
Today, with the adoption of digital “print media,” magazine and newspaper readers (the consumers) have the ability to easily skip over any content they don’t want to interrupt their reading. We consumers are becoming empowered; we now have control over much of what is called “traditional media.” More and more we watch what we want to watch, when we want to watch it, meaning we often “hop” right over the 6 or more commercial interruptions typical of contemporary TV fare; moreover, we swipe right past the ads as we consume the (digital) written word on our tablets, smart-phones and e-readers.
Reach Consumers Where They Buy
I must say this consumer empowerment is liberating and encouraging. We consumers are liberated from having the content we want to consume interrupted by advertising messages (that we don’t want to consume) when we’re not actually shopping. Likewise, the rise of the empowered consumer serves to encourage advertisers to focus their informative and persuasive messages at the time and place when we consumers are most able to act upon them and when we are most likely to seek them out - When we’re shopping.
As the proliferation of online and on-demand content erodes traditional media’s audience (and hence its marketing power), it is becoming clear that marketing messages on a go-forward basis will be, increasingly, at the time and place when shoppers are looking to become buyers - at-retail. Traditional advertising – via traditional media – is a sitting duck.
The Implication for Consumer Goods
There is no question that B2C marketing (and we’re primarily talking about the marketing of consumer goods) has changed since the digital era started to gain traction with consumers in the mid 90’s. There is also no question that point-of-sale, at-retail and shopper marketing is the best way to reach and persuade consumers to buy.
The implications for consumer goods manufacturers and suppliers should be that they adopt tools that will allow them to study what retail marketing elements engage and influence shoppers to become buyers.
This can be significantly accomplished by correlating point-of-sale (POS) marketing characteristics (i.e., placement, types, message and costs) to sales impact. Doing this requires tools that will facilitate the tracking, measuring and management of at-retail initiatives.
OnTrak provides such tools, so click the following button to learn more: