Point-of-Sale Marketing - Blow Up Your TV, Throw Away Your Newspaper, and Go to the Store!
If you have been involved in the alcohol beverage industry for the last five years, either as a supplier or a wholesale distributor, you know there have been many changes in the industry that significantly impact your business.
The Importance of Point-of-Sale (POS) Marketing
One of the significant changes has been the growing importance of point-of-sale marketing (aka, in-store or shopper marketing). POS marketing includes any planning for, or the measuring and managing of the promotional materials and messages which target the ‘consumer’ at the point-of-purchase (POP). Such POS or POP marketing materials might include printed signs, displays, menus, or product samples.
The Changing Role of Mass Media Marketing
Mass media marketing, while hardly dead, has become less valuable in driving local sales. Like society for most of the last decade, mass media has become ever more fragmented, making it increasingly difficult for brands to be effectively marketed to large population segments. This one trend alone has led suppliers to restructure their marketing budgets to identify alternatives to traditional mass media. Other trends, including the explosion of brand choices and retail places, have also served to weaken mass media’s impact.
The Changing Role of Point-of-Sale Marketing
Starting in the early 2000’s, in response to the weakened impact of mass media, suppliers, distributors, as well as retailers, started to shift their budgets away from mass media toward point-of-sale marketing. Now in 2014, as we continue to emerge from the Great Recession, this shift has again picked up momentum. We have seen 'at-retail' marketing activities increasing in-sync with these shifting budgets.
The market has spoken and it certainly seems to be saying ‘at-retail’ is where the critical difference can be made with respect to influencing the consumer to buy.
The only challenge with POS and POP is that these promotional materials are provided and placed by the supplier or distributor with little or no knowledge of the impact of the marketing investment, or without a known correlation between the cost of these marketing campaigns and the resulting sales performance. Said a different way, there was no easy way to determine the profitability or the return-on-investment of point-of-sale marketing initiatives.
To confirm this all you have to do is consider the following:
Do you have the information to answer the following questions?
How much of a sales increase did you experience from your point-of-sale marketing initiatives?
What attributes of POS marketing have the most influence on sales?
How can the effectiveness of your promotions be improved to generate more sales within your current budgets?
How do multiple POS marketing programs (signs, display, menus and samples) work together for a greater impact on sales?
Until recently, tools were not available to collect this type of marketing campaign data and present it to the suppliers or distributors. Now with products provided by OnTrak, it is possible to answer these questions quickly and accurately, to improve your point-of-sale marketing efforts.
An added benefit is that you will now be able to provide detailed information to your suppliers about what point-of-sale marketing campaigns you sponsored, how much they cost, and what their impact was on sales. You will also have the data to file timely and complete marketing co-op recovery reports immediately after a campaign has concluded.
For more information on our products, please click this button:
Are You Able to Track and Measure Your Investment in Point-of-Sale Marketing?
Do you think you’re spending too much on at-retail promotions?
Whether you answered Yes or No - How do you know? - Unless you measure it first!
These are not meant to be trick questions!
Most of OnTrak’s customers and prospects feel they are spending too much on Point-of-Sale (POS) Marketing. Some feel they are spending too little. And occasionally we find one who feels their spending is just about right.
The truth is that often times they don’t know. Or they’re just guessing.
Based on our experience in the Alcohol Beverage Distribution segment, unless you have the tools to effectively track and measure your at-retail marketing initiatives, you can’t know what you’re getting for your spending. In addition, if you can’t determine your return-on-investment, you can’t manage your POS investments.
Bottom line: If you don’t measure, you can’t manage.
The alcohol beverage industry spends at least three-quarters of a billion dollars ($750,000,000) annually on retail promotions. According to POPAI, this number has continued to grow an average of about 7% annually even through the ‘Great Recession’.
I would think if you were an alcohol beverage distributor, you would want to analyze and evaluate your retail promotions just because it represents a lot of money; and POS is known to have the greatest impact in turning a shopper into a buyer.
According to the Advertising Research Foundation (ARF), certain forms of POS are more effective than others. ARF studies have indicated that some POS “produces sales lifts twice the size of others.”
Do you know what POS works best for your brands and products? Do you know the return on investment (ROI) your POS generates? If you don’t know the answers to these questions you may be getting a low or zero return on your retail promotions – or else you’re just very lucky.
The data comparing your POS spending to the top-line revenue changes during a specific POS campaign provides you with both information and knowledge about the effectiveness of your marketing efforts. This knowledge gives you a competitive advantage (if you have the tool) that will lead to profitable business management with an increase in market share.
Almost immediately after deploying one of OnTrak’s POS tracking tools you can make information-based decisions (not gut-based decisions) about where to place your POS for maximum impact; determine what type or size of POS works best; and what delivers a message that results in the most sales lift.
You will know whether your POS spending has been too much, too little, or just right, by using the information provided by OnTrak’s applications. The long-term impact is that OnTrak enables you to create POS campaigns that have a high probability of success. By tracking and measuring your POS process, you’ll know what works. No more printing a bunch of POS, placing it in the market, and hoping it works.
Who is likely to triumph: Those who really know what works OR those who are just guessing!
To learn more about OnTrak's POS Marketing Management Products, click this button:
How Global Consumer Goods Companies Fine-Tune Local Point-of-Sale (POS) Promotions
Remember the days when network television was the most effective way to get a marketing message to consumers - When companies such as Anheuser-Busch and Miller Coors had the size and scale to get the best deals for prime-time airtime on one, two or all three networks.
Today, with a cable audience divided among hundreds of channels and thousands of programming choices, prime-time network television is no longer the best or most efficient buy. Even cable choices can be far less effective today considering that DVR penetration is at nearly 40% – audiences simply fast-forward through advertising.
On the other hand, when your targeted customer is in the aisle at the retail store where your products are purchased, they often actively seek “advertising” with point-of sale (POS) signs and displays. POS introduces them to new products, informs them of sale prices and promotions, and focuses their attention on your product and away from your competitor’s.
We all know that POS marketing works. But there are only a small number of companies that actually measure and manage their POS. The same is true whether it’s called Point-of-Purchase (POP), In-Store Marketing, Shopper Marketing or Trade Promotions (TP).
How do you know how well you are doing?
Surveys indicate that only 18% of Consumer Goods companies comprehensively assess and manage their POS initiatives. If you have the answers the following questions, then you are among the elite.
What amount was spent on Trade Promotions, such as signage, displays and other collateral?
What products were promoted, and over what period of time?
Where were the promotions placed and who was the targeted customer?
What were the results of the promotion and its effect on sales?
According to International Data Corp. (IDC) Manufacturing Insights for the typical consumer package goods manufacturer Trade Promotions (aka POS) is the second largest cost item on the P&L, behind COGS, and it's growing.
In a webinar * conducted by Consumer Goods Technology Magazine and IDC the Top Trade Promotion Management challenges for these companies include:
The lack of a good Trade Promotion Management Tool to measure spend effectiveness and promotion return on investment (ROI)
Dissatisfaction with promotional results – companies know some percentage of promotional events are unprofitable, just not which ones
Inability to leverage prior learning or experience
The lack of data accuracy and availability
Where OnTrak Fits
Here’s the good news, and hopefully you won’t keep it a secret.
Today OnTrak Software has the tools that enable you to track, measure and manage your promotional efforts and spending – all at a cost that will surprise you.
Three of our products, specifically SignTrak (for custom POS), PermaTrak (for permanent POS) and MenuTrak (for custom beverage menus) already have the ability to track what was spent; where and when the promotions were placed; and the incremental sales that were achieved as a result of the promotions.
With OnTrak, you have the ability to measure POS ROI; know what works and what doesn’t; and show you how to leverage your experiences with promotions. OnTrak products help build a comprehensive data base that allows you to begin to optimize your promotional efforts.
To learn more about OnTrak's POS Marketing Management Tools, please click this button:
* Reference - CGT, MindTree & IDC Presentation, “How Global Companies Fine Tune Local Promotions,” September 15, 2011
Measuring the ROI of Point-of-Sale (POS) Marketing Materials
Does Anyone Care?
Countless studies show that at-retail marketing and point-of-purchase promotion materials are critical to stimulating and increasing sales, especially in the alcohol beverage industry.
But if they’re so critical to distributors and suppliers, why don’t the companies who produce and place the marketing materials at retailers and restaurants have a system to measure and manage the impact of their marketing efforts?
More importantly, why don’t they have an easy way to quantify the return-on-investment (ROI) that they get from their at-retail marketing campaigns and materials? Why they are unable to answer the key question: How much of an increase in sales results was achieved by making a specific investment in point-of-sale marketing?
Alcohol beverage distributors and suppliers spend hundreds of millions of dollars each year on point-of-sale signage, menus and samples. At certain times, retailers and restaurants might be able to tell distributors that more money ended up in the till, but where’s the real connection between the marketing campaign and the sales lift? Right now, alcohol distributors, suppliers and retailers are only measuring success based on the cash register - what was sold or purchased. But that’s like steering a boat by looking at the wake.
Do they know what motivated the buyer to buy? More specifically, did a marketing campaign and its associated materials that were placed at the point-of-purchase cause an increase in sales, or not? If it did then continuing the campaign might be beneficial; but if it didn’t, then perhaps the campaign should be stopped or modified, immediately. Without measurements how would you know how to manage this process?
The primary reason such measurement and management has not taken place is because the tools to perform such an activity previously didn’t exist, or required time consuming, manual effort.
There's good news.
Today, beverage distributors and perhaps suppliers, have access to new software tools that take away the guess work and precisely measure the impact of at-retail marketing campaigns and materials. These types of solutions actually correlate the effect that point-of-sale marketing or point-of-purchase promotion has on sales. They tell the beverage distributors, and ultimately their suppliers, if they are getting the maximum ROI from their point-of-sales (POS) marketing dollars for:
Custom and Temporary Signs - Gauge the performance of your signage, sales teams, suppliers, brands, and locations and then correlate those factors to your POS investment
Permanent Signs and Displays - Securely manage and control permanent POS inventory
Beverage Menus - Ensure full maximum performance from your sales team and compensation from suppliers
Beverage Samples - Total control of your sampling programs - what beverage was sampled and where; who sampled it and the customer’s tasting response
For more information on these measurement and management tools go to:
How To Win the Beverage Sales War With POS Marketing Data
Who Are OnTrak’s Customers?
OnTrak’s customers are typically those organizations in beverage companies that are responsible for the ordering, creation and placement of brand specific point-of-sale marketing materials. Generally speaking this means our customers are not retailers. Rather our customers (and prospects) are one or two levels before the retailer in the supply chain. In short, our customers are the distributors and their suppliers who create and/or fund the production of POS promotional initiatives: Advertising placed in the retail environment, for example.
Winning the War
With this foundation, I can now suggest that our customer’s point-of-sale data bases, maintained by OnTrak software solutions, are chock full of data that can be compiled, sorted and presented in reports that provide brand and product sales management with information about ‘How to Win the Beverage Sales War With POS’ specifically by knowing when to place POS marketing materials so that they are most likely to produce the greatest likelihood of success - Success being defined as an increase in sales.
Before we get to the particulars of how OnTrak products can help beverage suppliers and distributors maintain or gain competitive advantage, let’s discuss how the information in OnTrak’s databases can be used to produce a better understanding of when POS is likely to have the most impact.
To begin, it is not just helpful, it is imperative that you think about how and when retail shoppers become buyers. We need to think B2C, not B2B – this means, for example, that we recognize that consumers shop, typically, much more frequently than businesses.
Most consumers shop at least weekly, some several times per week. Studies for years have shown that the amount spent per shopping trip supports the conclusion that more is spent at the beginning of the month than at other times. Next in the order of spending per trip is: Weekends. The higher spending periods (beginning of the month and weekends) are, hopefully, obvious.
Ask Yourself These Important Questions
If these consumer profiles are correct, then here are some questions to ask:
Do you even have the data to produce reports by week, month, quarter, etc. compared to prior periods that will give your marketing and sales teams actionable information to assist them in planning and implementing at-retail marketing campaigns that are statistically proven to provide the greatest sales increase and maximum ROI?
Do you have the tracking, analyzing and reporting tools to allow you to filter your reports by ethnicity, store type, POS type, territory or zip code?
And finally, is your POS promotion spending simply defensive – suggesting that you’re just doing what your competitors do, rather than going on the marketing at-retail offensive, effectively putting the shoe on the other foot?
Do You Have The Data? - And Can You Get To It?
Only you know if you have the data required to answer the preceding questions – unless you’re already an OnTrak subscriber. Our subscribers capture dozens of data elements about their POS campaigns: They know what POS went to which customers (and they know every detail about that POS including brand and product being promoted, ethnicity, informational or promotional message, sale price, etc.), when it was ordered, produced and placed, and how much it cost and the correlation of POS marketing to sales of the promoted product.
This means OnTrak customers can actually measure what POS works best to enable them to achieve their sales objectives. Our subscribers can provide manufacturers and suppliers with visual verification of at-retail POS placement if required for compliance or marketing allowances recovery.
Of course it probably is possible to track, measure and manage your at-retail marketing without our software tools – it’s just that our customers tell us we not only make it look easy – it is as easy as 1-2-3.
For more information about OnTrak, please click the following button:
Why Marketing at the Point-of-Sale is More Important Now Than Ever Before
Store Brands vs. National Brands
During the Great Recession, shoppers learned to shop for value, shop for deals, and shop for the best products at every price-point. Shoppers learned that many products – maybe even most products at least in some categories – are largely interchangeable. In other words, shoppers quickly learned that many store brands are both less expensive than national brands but are often reported by consumers and reviewed by ‘experts' to be of equivalent quality.
When it comes to at least one store’s brand name, ‘Kirkland’, most consumers not only believe the brand represents equivalent – or higher – quality, they also believe Kirkland brands to be of substantially higher value.
The point is that shoppers have become more discriminating and more willing and able to shop and buy smarter than before the recession. This ‘smarter shopping behavior’ seems to be sticking around even though the economy has improved since the darkest days of 2007 – 2009.
POS Marketing Makes Smarter Shoppers
POS marketing materials provide most shoppers with the most important data points – in other words, shoppers ‘get smart’; at retail by taking in the data they require to make informed buying decisions.
For a variety of reasons fewer consumers and shoppers rely on traditional media (broadcast and print) to help them with their product research. Pre-buying research (other than that carried out by POS materials) is either done on-line, at home, prior to shopping, or in the store on a smartphone. Of course, some of the smartphone use at retail is simply to see if the product being shopped for is offered somewhere else for a better price. But many times the smartphone lookup is used to gather product information, consumer and professional reviews and comparisons to similar products available with different brand names.
In an effort to keep the shopper focused on the brand at hand, an increasing amount of POS marketing materials (signs, displays, etc.) will feature prominent QR codes inviting smartphone users to ‘scan for additional’ product information or instant offers (digital POS, that is).
Industry Research on POS Marketing
We’ve been relying on two POPAI studies for several years now: One that states 70% of all decisions are made at the point-of-sale (1995) and a more recent study suggesting the current number is now 76% (2012 POPAI study).
A study by marketing giant Olgilvy & Mather - Shopper Decisions Made In-Store. (SDMIS) says the following:
“Shoppers know they're thirsty, but when it comes to buying soft drinks or beer they make more decisions inside the store than any other category we studied. Almost 60% of Shoppers decide in-store what brand and how much to buy from these categories". (For more details on this article see Note 1.)
And a recent presentation (Note 2) by OlgilvyAction, supported these finding that shoppers make the majority of their decisons in the store as follows:
59% of brand selections are made in store. Shoppers typically enter the store with a set of products and brands in their ‘consideration set’ and then make their final decision at the shelf
85% of shoppers perceive in-store marketing more influential than out-of-store marketing
77% of shoppers enter the retail store without a shopping list
What Does This Mean For Beverage Distributors?
First, for the ‘smart supplier, distributor or retailer’ it is clear that effective POS marketing is the key to providing sales increases for virtually all consumer goods marketing sold in a retail environment.
POS marketing is a critical competitive tool in the fight for shopper’s attention and to persuade shoppers to become buyers.
Second, is that the only way to deliver effective POS is to TRACK POS orders, configuration and placement; MEASURE where, when and how much your POS cost (and to evaluate and correlate POS costs vs. sales); and, also MANAGE your POS campaigns with reporting tools that give you the capability to determine the profitability and ROI of your at-retail marketing campaigns and initiatives.
To learn more about how OnTrak product deliver these values to beverage distributors, please click the following button:
- - - - - - - - - - - - - - -
Note 1: http://www.wpp.com/wpp/marketing/consumerinsights/shopper-decisions-made-instore/
Note 2: http://www.slideshare.net/AMAChicago/shopper-marketing-consumer-packaged-goods-presentation-041912
Happy Holidays to the Beverage Alcohol Industry
OnTrak Software’s Crystal Ball
Anyone who works in the beverage alcohol business - suppliers, distributors and retailers - knows the end of year holidays are the time for the things that matter most: family, friends, neighbors, colleagues and of course beer, wine & spirits!
Generally speaking, October, November and December (‘OND’) are the months that almost literally make the year for those in the beverage alcohol supply chain.
Although the above may suggest that all is rosy in the beverage alcohol universe, it bears noting that beverage alcohol suppliers and distributors continue to operate in perhaps the most challenging environment since Prohibition was enacted.
New shopping trends and behaviors, more demanding shoppers (and therefore more demanding retailers), technology disruptions and, for many, a lack of pricing power means there is ever increasing pressure to establish new market footholds and maintain and grow existing market share.
To succeed, beverage alcohol manufacturers and their distributors must step up their game and get in-synch with the forces of change defining this apparently fluid consumer goods market segment.
Impact of the Economy and Consumers
Naturally, the economy has much to do with what happens next; but many signs do seem to point toward continued, if not robust, growth (at least in the US). Economists would love to see GDP growth rise to 3.5%, but it would appear the best we can expect is perhaps 2.5% – and, overall it seems that 2.0% is almost the only safe bet. These numbers, if borne out, probably mean consumer spending (which is about 70% of total US economic activity) will not spike, but rather drift lazily upwards.
Couple our lazily growing economy with rising costs, marginal pricing power, no end in sight for new beverage products that keep coming to the market like there’s no tomorrow, ever more savvy shoppers, and you have a recipe for the coming heartburn of 2014.
Shoppers, buyers, consumers, customers – whatever you may call them – continue to demand more. Shoppers, although they are still in a hurry, are increasingly willing to research their buying options. Both before and especially during shopping, consumers are looking for the highest value possible for their dollars. Simply by virtue of owning smartphones, most consumers now have the tools to become more informed about their buying choices – shoppers have become empowered like at no other time in history.
Maximizing ROI With POS Marketing Software
All of the preceding – assuming the economy does not falter from its steady-as-she-goes upward movement – should encourage beverage alcohol suppliers and distributors to focus heavily on maximizing the ROI of at-retail marketing initiatives (aka, POP, POS, shopper marketing, and retail promotions, etc.)
Now, more than ever, improving POS initiatives effectiveness is of paramount importance. Likewise, implementing tools that can correlate POS campaigns to sales results – down to the store and item level, when necessary – will provide improved predictability and, perhaps just as important, can provide the data to suggest when a ‘mid-course correction’ for point-of sale marketing promotion is prudent.
In short, using software tools that provide the ability to directly track, measure and verify the sales impact of current POS programs will suggest how best to invest future POS spending. If at-retail marketing is tracked and measured well, beverage alcohol suppliers and distributors will be able to be responsive to the many and constant changes in the market.
While much uncertainty still exists, one thing is clear: the beverage alcohol supply chain relies, more than ever, on at-retail marketing campaigns. Getting the most out of every dollar spent on at-retail promotion is likely to be a key determinant of success in 2014 and beyond.
If you’re a beverage alcohol company – supplier or distributor – determined to succeed in maximizing the ROI of your retail marketing budget, know that there are tools available to help you be more responsive to your market and that deploying these tools will enable you to gain a powerful competitive advantage.
For more information regarding the available point-of-sale marketing management tools available from OnTrak, please click this button:
Merry Christmas and Happy New Year from all of us at OnTrak Software
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:
- - - - - - - - - - - - - - - - - - - - - -
* Rick Flagg can be reached at firstname.lastname@example.org
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:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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/