Why More and More Beer Wholesalers are Taking a Look at the Power of Point-of-Sale Marketing
Our View from Booth 1126 at the 2011 NBWA Convention
We just got back from our fifth straight annual NBWA Convention and Trade Show. Each year these guys do an outstanding job, and this year was no exception.
For OnTrak Software - This was our best year ever.
We were overwhelmed with the interest in our company and our products. We met dozens of beer wholesalers and their suppliers plus our customers, prospects and potential business partners – All very interested in what we do and how we help distributors improve their business and sales performance through the management of Point-of-Sale (POS) Marketing campaigns (custom and permanent signs and sampling programs).
Most of the people we talked to expressed interest in at least one of the following OnTrak benefits:
- Cutting the cost of POS marketing - An expense item for them which seems to be out of control.
- Growing sales with better POS marketing campaigns – Many agree that POS sells beer, and great POS sells more beer – But some consider POS just a necessary evil.
- Measuring the impact and profitability of their POS initiatives - Not many are able to do this today, but wanted to know more about how OnTrak could help them.
- All of the above.
With hundreds of booths, we were honored that so many wholesalers took the time to meet with us.
We had about 8 hours of booth time over 2 days, leaving us with but a few minutes to make an impression on the beleaguered conference attendees.
We’ve been telling our POS Marketing Management story for many years. Why in 2011 did wholesalers want to know more about our solutions to help them track, measure and manage their at-retail promotions?
Here’s a summary of what beer wholesalers offered:
- Alcohol beverage sales have been down - Most likely due to the overall economic downturn these past couple of years
- Costs are up - Products, warehousing, delivery, sales and promotional costs
- Competition is increasing – Presumably due to the proliferation of brands and consolidation of distributors
With these market conditions it’s not surprising everyone wanted to know how to get the maximum sales return on their ever-increasing investment in point-of-sale promotions. They don’t mind spending money on POS, if they are able to get a commensurate increase in beverage sales.
No wonder OnTrak’s products and benefits resonated with them.
Here’s our view:
While there are numerous ways to spend advertising dollars – A TV commercial, a newspaper ad, or a glitzy billboard – Both distributors and suppliers know that you have a better chance of turning shoppers into buyers at the point where the products are available - In the store, restaurant or bar.
Given the current economic environment, increased competition and higher costs, advertising spend should be focused on where the customer’s money is spent first. So it is more important than ever to order, produce and place better and smarter shopper, in-store, point-of-sale marketing campaigns where shoppers become buyers.
So how do you create better POS marketing materials if you don’t have the tools to track, measure and manage those POS marketing campaigns?
Well with OnTrak software, of course.
A lot of people who came to our booth seemed to get that point. I wonder if it will catch on. I hope so.
Click here to learn how OnTrak helps Track and Measure POS:
Take Control of Your POS Marketing Budget and Start Saving Money on POS Today!
Recently I spoke with one of our customers – a mid-size, alcohol beverage distributor - to find out about their business performance this year. In addition, I was also interested in how they were using our software products to track, measure and manage their POS initiatives.
From a business performance perspective they said their sales trend over the past two years had been down, but recently things had started to turn around. In fact, some parts of their business – including craft beers – had actually grown during both of the past two years by double digits.
As for our software, I was interested to learn if we had helped them save money on their POS materials, or helped them generate better sales results.
Their first response was that they were continuing to spend the same amount of money on POS marketing. Being initially disappointed, I probed deeper. I asked, “Was the lack of savings an indication that our products were not providing the return-on-investment they had hoped for?” I waited for their response.
Here’s what they said.
While POS spending had not decreased from the pre-OnTrak days, it was not necessarily a bad thing. Indeed, our customer told me, “Since deploying OnTrak software, we’re actually producing more POS than previously – without an increase in cost.” Although expenses had remained about the same, they were able to produce more promotional materials. This additional production, without additional cost, was, good for them and good for their customers. In fact, our customer added, “The additional POS materials we’re producing are allowing us to take market share from our competitors – and that’s a good thing.”
I also learned that since deploying OnTrak software, our customer has been able to change where their POS is placed. No longer is he placing too much POS with some customers and not enough with others. This balancing of promotional materials placement by customer has had a positive impact on sales. Our customer explained, “The placement of additional promotional materials at customers who had previously been receiving insufficient POS stimulated incremental sales. And the reduction of POS at customers who had been over-saturated with signage did not decrease sales.”
Our customer said that prior to deploying OnTrak software he was spending an increasing amount on POS without getting measurable productivity or greater market penetration. He had no way of telling if his POS spending was making a difference in sales. Bottom line he had a ‘feeling’ about his promotional emphasis – too much, too little, about right – but he didn’t actually know.
Now he does!
If your goal is to find affordable tools that can simultaneously cut your POS costs, improve the impact of your POS Marketing campaigns, and generate better sales results, then you need to take a look at OnTrak’s portfolio of POS Marketing Management solutions.
Click here to learn how OnTrak helps Save Money on POS:
Alcohol Beverage Distributors – The Recession May Be Over. Now What?
In much of the US we’re still seeing 10% unemployment and nearly that much in under-employment. And that doesn’t include those folks who have simply stopped looking. So, while it is technically correct that the US has been out of recession for nearly a year and a half, the reality is that we’re in a long, slow recovery that still feels like a recession.
Now, what does this have to do with our typical post here on the OnTrak website?
Plenty! Despite what may feel like a permanent downturn, the reality is our economy is turning around. The fact is we are growing again. So…
Is your company ready for the recovery?
There are ways to help you evaluate your readiness for the “Great Recovery.” It’s not too late for you to take the following three steps, to position your company for “your end of the recession.”
1. Measure Your Market
If you have cut your customer research activities and budget, you now need to invest the time and money to know how your retail customers (and their customers) responded to the recession. It is unlikely that the end-consumers of your beverage products will return to their pre-recessionary buying habits. You need to know now, more than ever, how alcohol beverage consumers redefined their priorities during the recession and how they now value the beverages they consume – your products. Price sensitivity, one of the hallmarks of the recession in terms of consumer behavior, may linger for years even after this current downturn becomes economic history.
For example, consumers will likely take more time deciding what to buy at the point of sale. They will be more willing to postpone purchases, trade down, or simply buy less. New brands will require more Marketing at-Retail initiatives – including POS signage and beverage menus – to encourage consumers to take a chance on them. Remember, it is hard to manage what you don’t measure.
2. Manage Your Products
Working with your retail customers, you must test the impact of your Marketing at-Retail programs; and, using the data from these tests, forecast demand for the products you represent. This way you will be able to respond as the end-consumer trades down to brands that stress value or “price performance.”Hard times often favor products perceived as “good-enough” over ones considered great. Among national beer brands for example, Natural Lite has gained share at the expense of Bud Lite.
The weakest items in your portfolio should be candidates for dropping. New products, especially those that address the new consumer reality and put pressure on more established competitors, should still be introduced, but Point of Sale advertising should stress value and exceptional price performance, not brand image.
3. Don’t Cut, But Rather Maintain Marketing Investments
Although it is easier to say than do, the past two years were not the time to cut your Marketing at-Retail investments. Likewise, now is not the time to cut POS advertising and investment in new technology to help you Manage, Control and Measure your Marketing at-Retail initiatives. By now you have probably seen the results of studies that point to the successes of brands that maintain or increase their Marketing at-Retail spending during a recession, especially when their competitors cut back.
Those brands that maintain or grow their point of sale promotions typically improve their market share as economic good times return. Beleaguered consumers need encouragement at the point of purchase – they need information to inform and persuade them that they are getting the best value and the lowest price. This information, of course, has its greatest impact at the time and place of purchase.
Indeed, now is the time to increase your Marketing at-Retail spending as better economic times are poised to return. If you have cut your Marketing at-Retail investments, now is the time to invest in the tools to help you manage, control and measure the impact of your point-of-sale marketing programs. Using these tools will allow you to increase the use of POS that returns the most immediate and improved sales impact.
Point-of-Sale Business Intelligence
A Starting Point for Marketing at-Retail Improvement
If you are a supplier, distributor or retailer, you know that point-of-sale (POS) marketing initiatives can be used to build brands, develop customer knowledge, and drive sales.
Using Business Intelligence tools, alcohol beverage wholesalers are learning how they can improve Marketing at-Retail intelligence and remove wasteful POS spending. In 2008, at the NBWA’s annual conference, it was clear that Business Intelligence was the top technology that wholesalers were beginning to investigate and evaluate. Now in 2010, it has almost become obvious that business intelligence, when applied to Marketing at-Retail efforts, has become one of leading and most effective tools for alcohol beverage wholesalers. Armed with this useful information they are able to reduce wasteful POS spending and to improve the impact of POS materials in retaining and growing market share.
As a wholesale distributor, you know that your retailer’s main goal for market intelligence – as it applies to POS materials – is customer demand. Retailers want the ability to rapidly respond to and influence customer demand for the brands they carry. As a wholesale distributor, it is likely you share these same goals.
After responding to and influencing customer demand, retailers want all the business information that they can get their hand on about their POS promotions. Armed with that intelligence, they can make business decisions to improve customer retention and loyalty, and to increase customer sales.
Based on these goals, there is pressure on the distributors to improve their own at-Retail marketing intelligence to react to and better predict retailer demand. For distributors, pleasing their retail customers builds stronger relationships, and can turn small purchasers into volume customers. In today's highly competitive environment, the retailer often has many options, so maintaining and exceeding your retail customer’s expectations is critical for the distributor’s continued success.
Our POS Best Practices Presentation for alcohol beverage distributors is currently available, by request, from this website. This 15-minute self-running, narrated slide presentation is a great introduction to managed, controlled and measured Marketing at-Retail concepts and practices. Our presentation is the result of over 6 years of working with wholesale alcohol beverage distributors.
It’s a compilation of the best practices for creating Marketing at-Retail value through information technologies, from some of the largest and leading alcohol beverage distributors.
Please click here to request your free copy of our POS Best Practices Presentation:
Lowering Costs with a Managed, Marketing at-Retail Solution
Time (and Error Reduction) Is Money
One of the biggest advantages you will gain by using an automated, Marketing at-Retail management system is the reduction of errors that are so common when developing and printing such items as point-of-sale signage and menus. A primary cause of these types of errors this the lack of communications between the sales and merchandising staffs and the graphics department personnel. Often these errors in communications result in delays and expensive reworks (An industry average of $45 to $60 per rework.)
With a point-of-sales (POS) software management system, the ordering and tracking processes are fully automated. Instead of jotting down sign requests on a bar napkin or paper form, and stuffing all of the orders in the print shop in-box at the end of the day, your sales staff can transmit sign and menu orders electronically from the trade, throughout the day. Only minimal data-entry is required on the part of the sales person because all of the sign types the customers typically request are pre-loaded into the management system.
When sales reps enter a sign or menu request, they simply review a dropdown menu that shows the types, sizes and graphics for the signs or menus. Only when all of the required attributes for the customer and the specific type of marketing material are entered perfectly will the system accept the order. Then, the order is automatically transmitted to the print shop along with information about when the signs or menus are needed.
The Elimination of Errors
The ease and accuracy of this process eliminates virtually all of the time and expense of remaking signs or re-proofing menus. In many cases a managed POS software solution is completely paid for through the elimination of errors alone.
Another benefit of using an automated system to manage, control and measure your signage and menu operations is that the system enables print-shop management to direct each day’s production as effectively and efficiently as possible. Distributors have commented that a managed system permits orders to be approved, prioritized and scheduled automatically. Similar print jobs can be run contiguously saving time and reducing waste.
We Spent $30,000 on Banners! What Did We Get in Return?
Business Analytics have recently become one of the hottest interest areas for beverage distributors. Today, with the growing emphasis on promotions and Marketing at-Retail initiatives as the key to growing market share, it is important to know which marketing materials are creating the greatest returns for your business. For example, if it costs you hundreds of dollars per month to produce signs or menus for a customer who only buys a few cases per month, that is probably not a good use of your valuable resources. With a managed system you can ensure you’re spending your marketing budget serving the customers who do the most business with you.
Value for the Suppliers Too
Increasingly, suppliers are asking distributors to document sign, menu and product sample spending in order to fully participate in their bill-back or marketing allowance programs. Without a system that includes automated ordering, tracking and reporting functions which provide proof to suppliers, that task is extremely difficult. However, with an automated, managed system, a distributor can quickly deliver the data, saving time and paperwork, but more importantly ensuring that nothing slips through the cracks.
These Web-based systems are currently being deployed and adopted by beer, wine and spirits distributors of all sizes to address some of the most commonly expressed concerns of distributors, namely, how to reduce Marketing at-Retail expenses, increase market share, and provide tools to process, compile and file for available recovery dollars.
Marketing at-Retail - Books Worth Reading
Marketing At-Retail – whether you call it Point-of-Sale, Point-of-Purchase, Product Samples or Product Menus – is undergoing dramatic change driven by market segmentation, media fragmentation and even the places and methods by which brand identities are born and built.
Suppliers, distributors and retailers know they must continue to invest in point-of-sale marketing to drive sales. But knowing what to do, how and when to do it, and why, may often be elusive. Specifically, beer, wine and spirits suppliers, distributors and retailers can build successful brands and drive sales only by using up-to-date methods and tools.
There are many publications which offer insights on every aspect of marketing alcohol beverage products including:
- Guidelines for planning and executing effective marketing at-retail campaigns
- Discussions and examples of tools for influencing retail shopper’s behavior
- Ideas to maximize POS/POP return on investment ROI
- Best practice outlines for integrating POS (promotions) with Brand Building (advertising)
The following is short list of publications which we have read and have found helpful:
- Wine Marketing and Sales: Success Strategies for a Saturated Market
Liz Thach Ph.D., Janeen Olsen Ph.D, and Paul Wagner $44.00*
- Successful Wine Marketing
James Lapsley, Kirby Moulton $111.00*
- Sales and Service for the Wine Professional
Brian K. Julyan $44.00*
- Beer Blast: The Inside Story of the Brewing Industry's Bizarre Battles for Your Money
Philip Van Munching $55.00*
- Shopper Intimacy: A Practical Guide to Leveraging Marketing Intelligence to Drive Retail Success
Rick DeHerder $30.00*
* All prices shown reflect Amazon’s current off-SRP discounts as of the date of this post. These titles are available to be ordered from Amazon, Barnes & Noble, Borders, or other online outlets.
– Mark Fullerton
Managing Marketing At-Retail - Your Competitive Advantage
The Old Normal - “It’s Always Been That Way”
Let’s look at Marketing At-Retail from the point-of-view of alcohol beverage distributors (ABDs). ABDs are positioned in-between the supplier and the retailer in a governmentally mandated three-tier system. They are in a unique spot compared with distributors of other, non-regulated, products that are sold at retail.
For example, certain state and local laws can dictate what an alcohol beverage distributor can and cannot do with respect to promoting, selling and transporting their suppliers’ products. Additionally, a growing number of suppliers, in an on-going effort to reduce their costs, are placing even more pressure on the distribution tier to provide, produce and place Point of Sale Marketing materials, including Beverage Menus and Beverage Samples – further shifting costs to their distributors.
Since the day prohibition ended over 75 years ago, there has been some kind of marketing at-retail materials used to promote the sale of alcohol beverages. Generally these materials are lumped together under the name POS (point-of-sale). In the early years – after the repeal – retail signs, store windows and walls were often hand-painted and proudly announced a specific beverage or brand availability, usually proclaiming certain products were being offered with a sale price at this retailer’s store. These 'works of art' were typically the Beer POS signs of the times.
Over the past 75 years, POS has evolved considerably. Now, rarely, if ever, is POS hand-painted, for example. Rather, today’s POS is usually the product of graphical software programs, and wide-format color printers. Often this POS is produced locally in the distributor’s own sign shop by specialized graphics personnel. A walk through most ABD’s sign shops will reveal an impressive facility complete with multiple printers, computers, print shop supplies and personnel. For many distributors, custom POS, temporary POS, and permanent POS is their second or third largest business expense, after payroll and transportation expense. It is an expense that most ABDs admit is out of control and one that provides unknown and, for many, unknowable return on investment. When asked why such an expensive and important part of their business is left essentially unmanaged, many ABDs will frequently reply, “It’s always been that way.”
Yet many of these ABDs are the exact same companies that spend 6 figures, or more, on order entry and accounting systems. And some will spend a like amount on logistics and warehouse management systems, remote mobile order entry systems, and truck routing software. All this in order to improve customer service, gain operational efficiencies and save precious drops of fuel. When asked why they are willing to invest, in some instances, millions of dollars to acquire or upgrade their back-office, logistics, routing and mobile sales-force applications they will often answer “To save money,” “To dominate the competition,” or “Because these applications will help me manage and control my core business processes, my core competencies.”
– Mark Fullerton
So what's the New Normal?