BLOG - Point-of-Sale (POS) Marketing Management

Determining the Return on Investment for OnTrak's POS Tracking Tools

Posted by Mark Fullerton on Wed, Apr 13, 2016

Determining the Return on Investment (ROI) for OnTrak’s POS Tracking Software

We’ve been asked, from time-to-time, to help our customers to determine the financial impact of using OnTrak’s SignTrak® and MenuTrak™ products – Point-of-Sale (POS) Tracking Software for custom, temporary signs and custom beverage menus.

SignTrak manages the custom, temporary POS signage process. The system automates communication between sales and sign shop; eliminates POS errors and reduces time-to-market; and tracks both POS costs and supplier recovery.

MenuTrak manages the custom menu creation process the system automates the configuration, approval & production of custom beverage menus; tracks costs and improves supplier recovery

Initially our customers begin using one of these products to improve POS/Menu ordering and to track the costs associated with the design and production of custom point-of-sale materials by the distributor’s in-house graphics and printing department.

Generally, after a few weeks of usage, customers come to rely on OnTrak products to get their POS materials to market faster than ever. That is, OnTrak’s products shorten the length of time from POS ordering to placement in retailers’ aisles and in front of restaurants’ patrons.

Often, at about the same time, it becomes apparent that the number of POS/menu ordering and production errors drops to almost zero as do the number of reworks:  “POS materials” (e.g., custom signs, displays, menus, etc.) that have to be remade due to an error can cost days, sometimes more – leading to lost sales.

Also, reworks are expensive when you realize that POS design and production includes not only paper, ink and menu covers, but also that a reworked sign or menu takes the sales rep’s time and the graphic designer’s and print operator’s time away from doing other things that can help your sales force be more productive.

Additionally, even though it is not directly measurable, the distributor’s customer’s time is also impacted when at-retail signage or menus are incorrectly produced and have to be reworked.

OnTrak’s Return-On-Investment (ROI) Calculator

The following figures, hopefully, are self-explanatory. In each step the cells in the spreadsheet, highlighted in light yellow, will contain information specific to your organization. In our example, below, we have entered averages based on our nearly 10 years of experience with beverage alcohol distributors.

We use a three step process:

Step 1 - Calculate the Cost and the Savings of an OnTrak Solution

The price of our software is based on the number of users of the system (e.g., SignTrak or MenuTrak) – what we’ve done is enter information into the cells of a spreadsheet to determine the number of reps, managers, administrators, etc. who are involved in ordering, producing and placing POS materials and some other pertinent data in order to determine the costs (in time and money) of POS tracking: Ordering and production activities, reworks, etc.

Additional gross margin per representative will likely be generated as a result of the time saved entering orders and communications between sales and the sign shop. If a rep is spending more time selling rather than entering and tracking orders, that can result in additional sales as well as increased gross margin for your business.

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Step 2 - Calculate the Print Shop Production Costs, and the Savings from the Elimination of Errors and Reworks

Our ROI calculator takes a look at the cost of your print shop personnel and the time (and money) that is saved using our automated workflow system.

The savings come in two major areas:

  1. Time - There is a dramatic reduction in the time for your print production team since we offer a fully automated system that helps them in the areas of batching jobs, manual data entries, elimination of error and reworks, and the time spent on the phone with sales personnel who want to know the status of their orders.
  1. Cost of Errors and Reworks – OnTrak solutions virtually eliminate all errors and reworks. With an electronic, paperless workflow system all orders coming into the print department are accurate and complete. There is no need for phone conversation since the system automatically generates message to the sales teams when their order is accepted and completed.

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Step 3 – Calculate Your Return on Investment (ROI) in OnTrak Software Solutions

There is one more savings area to discuss and then we’ll get on to calculating the Total ROI from investing in an OnTrak Software Solution.

Should your suppliers require reports to confirm the amount of money (brand support) you spent on custom POS signage or beverage menus then our solutions will save you significant time in this area. All recovery reports are available at the click of a mouse, and therefore will save your staff considerable time and money.

Finally,

Our ROI calculator:

  • Subtracts the cost of an OnTrak subscription ($15 per user, per month, in our example),
  • From the savings determined by a typical medium-sized beverage alcohol distributor,
  • To calculate the payback per dollar (ROI) spent on either SignTrak or MenuTrak.

In this case the ROI is 4.71 to 1.

That means that for every dollar you spend on an OnTrak Software product will return a savings of $4.71.

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This ROI is based on the numbers we used in this spreadsheet. The next step is to contact us and schedule your own ROI calculation using your numbers to see how much OnTrak can save you. We’re sure you will be impressed.

In our nearly 10 year history we have never seen less than a two to one return on investment.

A live demonstation is the best way to see the value of our OnTrak Solutions. If our software meets your needs we can then schedule personalized ROI calculation for your business.

Here's how:

1. Please click the following Button to request a demonstration of our POS Tracking Software.

2. Then select SignTrak or MenuTrak and as part of the demo. We will then schedule your own ROI Calculation, or

ProductDemonstrations

3. Call Todd Grote at 773-255-4713 to schedule the demo and the ROI calculation.

Tags: POS Tracking Software, point of sale marketing software, Marketing At-Retail, POS Marketing Software

A-B/InBev - Distributor Assessments for POS Tracking & Line Cleaning

Posted by Mark Fullerton on Mon, Feb 29, 2016

Anheuser-Busch/InBev - Distributor Assessments for POS Tracking and Line Cleaning

Anheuser Busch   InBev   Distributor Assessments for POS Tracking and Line Cleaning resized 600In keeping with our focus topics, this blog will be limited to a discussion of two somewhat broad sections of the Anheuser-Busch/InBev (ABI) Distributor’s Agreement – the distributor’s responsibilities pertaining to point-of-sale (POS) Marketing and Draught Line Cleaning.

1. Distributor Compliance with the Amended and Restated ABI Master Agreement related to the use of ABI assets (distributor’s in-house printers) for POS Marketing Production

    According to Anheuser-Busch’s general and investor information website http://anheuser-busch.com/:

    One of the main drivers of Anheuser-Busch’s success over the past 150 years has been its ingenuity and innovation in advertising and marketing. As time changed, Anheuser-Bush always has created new ways to connect beer drinkers with its products.”

    During “The Modern Marketing Age” (ca: 1950 – today), AB quickly adapted to the new mass-medium, TV, and also stepped up programs to support its body of wholesale distributors (WD's) in their creation of “POS” (point-of-sale marketing and promotional materials)  – consisting substantially of a variety of “custom-temporary signage” displaying AB approved logos, phrases and other content such as “This Bud’s for you” or, more recently, “Rock Some Bud”.  Today, ABI WD’s have access to literally thousands of digital ABI-specific graphics at their secure “for members only” website https://www.abmarketing.com.

    It’s Not Just a Sign Shop Anymore

    Virtually all beer distributors have one or more sign shops in-house staffed by graphics designers and multiple-format printer operators. In growing numbers of larger WD’s, there are now POS Marketing managers – sometimes reporting to a Chief Marketing Officer – who also work closely with sales managers, sales team leaders and merchandisers.

    A key responsibility of POS Marketing managers is the timely fulfillment of virtually all of the distributor’s point-of-sale and shopper marketing initiatives – from temporary signs and displays to neon signs and tap-pulls and everything and anything the distributor requires to market their beverage alcohol products at-retail. 

    As beer WD’s grow in footprint (i.e., revenue and geography), POS Marketing managers increasingly are assigned budgetary responsibility and may be called upon to provide analysis of POS campaign ROI and effectiveness.

    As suppliers, like AB Inbev, MillerCoors plus a rapidly growing number of craft brewers continue to enhance and evolve their financial marketing support, sometimes simply called bill-backs, the POS Marketing manager becomes the logical nexus for the reporting required to demonstrate “POS Compliance” and eligibility for a supplier’s POS reimbursement programs. Indeed, in some WD’s the POS Marketing manager is tasked with the responsibility of assuring supplier bill-back procedures are followed and even with the responsibility of following through the supplier-to-distributor payment reconciliation process.

    Today, due to the inevitable rise in the importance of shopper marketing, trade promotions or POS advertising, etc., “POS” for the average beverage alcohol distributor has grown to at least a mid-sized 6-figure per year business unit within the organization. For some distributors, their annual spending on point-of-sale initiatives has, in the past few years, become a multi-million dollar department.

    Naturally, WD’s want, whenever possible, to turn their investments in POS from a cost-center to a cash-neutral cost-center, suggesting WD’s are looking to recapture as much cost as possible by taking every advantage of their supplier’s marketing support programs.

    You Want Me to do What?

    This brings us to ABI’s latest “Assessment” relating to a WD’s sign shop infrastructure. 

    You see, ABI and AB before it, realize the competitive importance of POS marketing in retaining and growing market share. To be supportive of this reality, ABI promotes and bolsters their distributors’ sign shop infrastructures by underwriting part of the costs of the printers WD’s use to create POS signage. A printer-refresh-cycle was established wherein ABI offers its WD’s the opportunity to refresh their printer technology to the current state-of-the-art at a substantial savings. Most WD’s avail themselves of the opportunity provided by ABI’s co-op of the cost of the printers to keep their print shops stocked with current, more efficient, technology.

    A long-time unenforced stipulation in ABI’s Amended and Restated Master Agreement states that any of the WD’s printers thus co-opted by ABI are to be used to print marketing materials advertising only the brands from ABI. Distributors could, for example, certainly create POS for non-ABI brands, of course. They just weren’t supposed to use the ABI funded printers to do so.

    In 2015, according to several ABI distributors we’ve talked to, ABI officials – during the initial “trial-run” assessment of distributor operations – indicated something like: “An ABI sponsored printer could not be used to create signage for Yuengling or Fat Tire,” for example; and during a subsequent assessment, we’ve been told ABI again raised the issue of “using ABI subsidized printing equipment” for the production of non-ABI POS materials.

    Apparently, some WD’s felt this second mention perhaps smacked a little too much of big-brotherism and wondered out loud if it just might be worth shopping for printers and supplies from a source that would remain outside of the scrutiny of an ABI “Compliance Assessment” – even if the printers ended up costing a bit more.

    The key take away is this:

    Some WD’s see the combination of ABI’s recently announced “Marketing Incentive” (as discussed in the November 23, 2015 issue of Beer Business Daily) and Distributor Assessments as a way for ABI to push, perhaps “herd”, WD’s to focus virtually entirely on ABI’s brands, despite the fact that Bud and Bud Light are currently in a relatively slow, but steady volume decline.

    It seems that we’ve perhaps reached a “point-of-inflection” where the macro-brewery WD’s – this time it happens to be ABI’s WD’s – may want to look into their options for outfitting and managing one of their most important and expensive operational business units.

    Regardless of the path you and your WD chooses to follow, it is becoming ever more important that you have the appropriate Digital Tools (see Note), like SignTrak and PermaTrak, to help you order, track, manage – and control – your POS Marketing’s Budget, ROI and Effectiveness.

    2. Distributor Compliance with the Amended and Restated ABI Master Agreement Related to Draught Line Cleaning

    You don’t own 45% of the overall US beer market by being disorganized or without having an exceptionally detailed master agreement with every one of your phalanx of distributors – who, after all, are the pipeline that gets ABI’s products to the retail marketplace.

    Since we work with many beer wholesale distributors (including 8 of the top 20), it recently (late 2015) came to our attention, that compliance with some of the terms of the Distributor’s Agreement have – for Anheuser-Busch Inbev (ABI) distributors – come under some heightened scrutiny over the past year; and, according to our sources, 2016 promises to be a year in which ABI wholesale distributors should expect any violations ABI uncovered during the first assessments (started in 2015) to begin to be enforced.

    As you probably know by now, OnTrak’s focus here, generally speaking, is to write about the tracking, measuring and managing of beverage alcohol marketing and promotions at the point-of-sale (POS).

    Additionally,  in response to our customers’ requests in 2015, we broadened our products’ focus to include beverage alcohol tap-line cleaning, tracking and reporting software as we have been persuaded (by our customers and our own taste buds) to believe that clean beer (and wine) tap-lines are also one of the marketing tools WD’s used to stimulate on-premise beverage alcohol sales.

    LineTrak: We Built It - You Came

    We’ve yet to come across the distributor who doesn’t agree clean beer and wine tap-lines absolutely are equated with great tasting products. We’re typically talking about draught-beer lines, but at least two very large wine and spirits distributors have told us they clean draught-wine lines for their on-premise customers; and that keeping a record of the cleanings is important to them, their customers and for accountability with their suppliers. Increasingly, beer distributors also expect their line cleaners to help keep track of the number of taps dispensing beers marketed by the distributor’s competition as well as the number of total lines flowing with the distributor’s own beer brands.

    The record keeping component of line cleaning tracking is straightforward. That is, the distributor wants  to be able to demonstrate to both the retailer (the distributor’s customers) and the supplier (the distributor’s vendors) and possibly the local board of health (the government) that the distributor is complying with supplier’s guidelines as well as health and sanitation requirements of state and local governments – or, at the very least (in states where the distributor does not perform and does not hire a third-part cleaning company) is on top of the cleaning regimen – compliance – at the on premise point-of-sale.

    The “marketing” component of line cleaning is there to provide the distributor with the answer to a few critical survey questions including questions that could indicate the loss of a tap-line to a competitor and the ability to electronically communicate to the distributor that an account sales rep should be contacted and be made aware of the potential or actual loss of a beer tap.

    The key take away is this:

    If you are an ABI distributor you are, according to your agreement with ABI, “responsiblefor the cleanliness of your retail customer’s draught-beer lines.

    But remember, the clean tap-line requirement is hardly exclusive to ABI. In fact craft brands have elevated line-cleaning and reporting to “The 11th Commandment”.

    Additionally, if you use a digital tool (see Note) like LineTrak, to help you keep track of line cleaning, there is every reason to utilize the line LineTrak application to help retain and gain market share.

    For more information about our digital tools for beer distributors, click the following button:

    BeerCompanies

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    Note: Digital Tools - SignTrak® PermaTrak® SampleTrak™ and LineTrak™

    Resources:

    ABI Beertender Guide, Your Guide to the Beer Business page 12; www.abwholesaler.com/docs/beertenderguide.pdf

    Beer Business Daily (BBD), “The Truth Squad Speaketh”; various dates www.beernet.com (subscription required)

    Brewers Association, “Draught Beer Quality”; www.draughtquality.org/wp-content/uploads/2012/02/One-Pager-The-Facts-About-Draught-System-Cleaning.pdf

    Beer Advocate, “Respect Beer™”; www.beeradvocate.com/

    Beer Business Daily (BBD), “The Truth Squad Speaketh”; various dates www.beernet.com (subscription required)

    Anheuser-Busch, “Marketing and Advertising”; http://anheuser-busch.com/index.php/our-heritage/history/marketing-and-advertising/    

    AB-Marketing; https://www.abmarketing.com

    Tags: POS Tracking Software, draft line cleaning, POS Marketing Software, line cleaning software, draught line cleaning software

    Using POS Marketing to Get More Done In Less Time For Less Money)

    Posted by Mark Fullerton on Mon, Feb 15, 2016

    Using Point-of-Sale (POS) Marketing to Get More Done in Less Time and For Less Money

    OnTrak Software Wishes You a Fast Start to a Happy New Year!

    Using POS Marketing to Get More Done In Less Time For Less Money resized 600Regardless of your pleas for more and more time, Time Takes Time!

    And since there is a limited supply of time, time is not on our side regarding marketing, advertising and trade promotions. So we need get a fast start in 2016.

    The Cost of Broadcast Marketing vs. POS Marketing

    Let’s start out with some data points from MediaDailyNews (2014):   The cost-per-thousand (CPM) to reach 1,000 adults (specifically women age 18-49) via “broadcast” TV (ABC, NBC, CBS and Fox) is $44.11. Digging deeper and with some work it is possible to achieve a total overall cost to reach 1,000 “non-specific viewers” for less than $8.00.

    I’ll use the above data-points as the basis for comparison with another type of advertising – point-of-sale or point-of-purchase (POS or POP) advertising.

    The range of costs to reach “1,000 viewers” using a POS-placed temporary or permanent sign or display, like the costs associated with TV advertising varies. What we do know is that POS marketing typically costs from 3 cents to 40 cents. So there’s no comparison when you match the highest CPM for POS (40 cents) to the lowest CPM for TV (about $8.00).

    This means that the cost to reach 1,000 potential customers using POS advertising is 95% less than the cost using TV spots.

    Many studies of TV advertising practices and results have been undertaken over several decades. Using this study data it is possible to create a list of strengths that can be attributed to broadcast, cable and satellite TV advertising.

    The best strength for TV seems to be TV’s virtually unrivaled reachThat is, the potential for an advertiser via a TV spot to be seen by some 120 million US households. When looked at that way, today nothing even comes close to TV if the sheer number of viewers is your goal. From another perspective, however, POS has its own set of compelling strengths – especially for marketing consumer packaged goods (CPGs).

    The Power, Efficiency and Effectiveness of POS Marketing

    Yet a longer term analysis of TV advertising demonstrates some “weaknesses in the force”, in addition to high costs relative to POS advertising. For example: A viewer’s difficulty in recalling a TV advertisement when making a decision at the point-of-sale. Add to that the rapid adoption of DVR’s that has not only shifts program viewing, but has also enables viewers to “skip over” unwanted content – usually commercials.

    Another weakness is the difficulty if not outright impossibility of measuring anything other than the CPM of given TV marketing campaigns. Additionally, channel fractionalization, meaning we’ve gone from three network-TV channels to over five hundred cable and satellite outlets, continues to change the supplier’s ability to afford to market to the desired target for their products.

    Finally, the number of products and product categories appears to know no ceiling and each product shouts out for advertising as if its very life depended upon it – and it does, actually.

    Where Does All the Above Leave Us As We Kick Off 2016?

    We’ve reached a point-of-inflection with respect to the array of brands and products typically classified CPGs – where the best time and place to influence a sale is at the point-of-sale. This statement is further bolstered by the fact that the spending of CPG manufacturers, wholesalers and retailers on POS marketing continues to increase year after year; and, that those marketers who can track, measure and manage promotional investments at the point-of-sale will retain and gain competitive advantage. 

    9,999-Bottles of Beer on the Wall

    Due to the increase in the absolute numbers of beverage alcohol brands over the past decade – just to name one huge CPG category – POS marketing is far more important to beer suppliers (breweries and their distributors) in 2016 than it was just five short years ago. And, although it is impossible to actually measure the impact of TV advertising (beyond CPM), distributors, employing digital tools, can quickly correlate local POS advertising initiatives with retail sales data to evaluate the impact of their POS marketing investment, thus providing valuable and actionable information to suppliers and even specific retailers in addition to their own analytical purposes.

    Recognition of the Importance of POS is a Great First Step

    CPG marketers and beverage alcohol marketers in particular must pay ever greater attention to tracking, measuring and managing their POS programs – perhaps focusing on the impact and ROI (the correlation of sales to POS costs) of these increasingly important initiatives.

    Based on published research and interviews with our customers, we’re finding that more and more beverage alcohol distributors recognize their importance as marketers and are increasing their utilization of and spending on POS. Overall, the year-to-year growth in POS spending averages at least 5%. Some suppliers and distributors have told us of plans to raise their POS budgets much more significantly in response to the proliferation of beverage alcohol brands they now supply. What these suppliers and wholesalers now recognize is the growing importance of POS as a key driver of growth.

    What they are also recognizing is they need Digital Tools – such as those developed and offered by OnTrak – to track, measure and manage their POS marketing efforts.

    To learn more about our POS Tracking solutions for beverage alcohol wholesalers, please click the following button:

    OnTrak Products

    Tags: POS Tracking Software, point-of-sale marketing, point of sale marketing software, point-of-sale marketing management, alcohol beverage distributors, Marketing At-Retail

    ABI Offering Millions to Distributors for POS Marketing Promotions

    Posted by Mark Fullerton on Thu, Jan 21, 2016

    Why is A-B/InBev Offering Millions to its Distributors for POS Marketing Promotions?

    In our previous blog – December 13, 2015 – we looked at Anheuser-Busch InBev’s (ABI’s) new incentive program which ABI estimates will offer participating distributors an average annual benefit of $200,000 each, with as much as $1.5 million annually for some of ABI’s largest distributors.

    For our take on this program, please refer to the previous blog:

    A-B/InBev (ABI) Offers To Pay Distributors For Their POS Marketing

    What Problem Is ABI Trying to “Fix”

    Today, I'd like to to take a look at why ABI chose as one of the pillars of its new marketing plan to support a distributor’s contractual marketing support spending by covering up to 75% of the retail promotion and display costs for those distributors if 98% (by volume) of the beers they sell are from the ABI portfolio.

    According to the Wall Street Journal, ABI’s stated purpose for the marketing cost reimbursement plan is to “reverse declining volumes in the US” by encouraging distributors to reduce the number of non-ABI brands they offer their customers.

    Apparently, the thinking is that one of the reasons for the declining sales volumes of ABI’s beers is that distributors are not focusing sufficiently on the ABI brands, choosing instead to focus too much on non-ABI brands.

    Perhaps, too, ABI imagines that the distributors need to increase their use of and spending on retail promotions (POS) as a way to stimulate more sales.

    Yet, many distributors see this incentive program as meaning, at least in part, that ABI believes the distributors should greatly curtail or stop marketing and selling beers from the exploding list of craft breweries; and, of course, reduce or stop selling non-ABI imports, too.

    ABI may be assuming that should a significant number of their over 500 distributors drop some or all of their craft and import offerings it will reverse the ABI sales decline especially of the macro-brews Bud and Bud Light. Such a reversal could increase ABI’s market share from its current 45%, perhaps even back to its former near 50% market-share status. At the very least, one could easily conclude, ABI  at least  wants to stop their volumes from declining.

    Will ABI’s Approach Work?

    Could this strategy actually work?

    Well, like most questions, the most accurate answer is “it all depends.” Our answer to that question, based on conversations with beer distributors and personal observation, is “maybe.”

    Several – and it is perhaps even more accurate to say “many” (see resources, below)– studies have shown that there is a lack of conclusive proof that at-retail alcohol advertising increases overall levels of aggregate consumption among both adults and young people. However, according to at least five studies (that I could find) on the impact of alcohol advertising at the point-of-sale: Advertising has a measurable effect on market-share for brands and a substitution effect between brands. And, as noted, ABI is seeking to regain lost market share

    Although the amount of advertising for all beverage types has increased dramatically over the past century, government data shows that the consumption of beer, wine, and spirits in the United States has remained relatively constant. In fact, per capita consumption levels in the year 2000 did not differ dramatically from those during the year 1900. Again, advertising has a measurable effect on market-share for brands and a substitution effect between brands.

    On the other hand, according to the CDC, “Point-of-purchase (POP) [i.e., at-retail] marketing, including alcohol advertising and placement, can increase alcohol sales and consumption substantially.” Also, CDC studies have concluded, “POP marketing can increase beer sales [vs. not having POP marketing] by as much as 17% and influences consumer purchase behavior, as 70% of a buyer's purchasing choice occurs after the buyer enters the retail establishment.” The CDC studies also note, “Persons aged 21-27 years are more likely to purchase beer in convenience stores and liquor stores than in supermarkets and drug stores [where POP promotional materials are prevalent].”

    ABI’s Historical Utilization of POS Advertising

    Anheuser-Busch, as I learned at the following link, has a long history of successfully utilizing POS to sell its products.

    ABI – Our Heritage and History in Marketing and Advertising

    As I put all of the scholarly, business and promotional publications I had researched on my desk, what struck me was that POS has now come full circle - Starting in 1852 and growing rapidly until Prohibition, then starting all over again in 1933; Then gaining steam until 1950 when emphasis began building in the fledgling visual media, TV; Then once again beginning somewhat of a shift back to local point-of-sale marketing.

    Things began to gain headway with the explosion in the number of TV channels and the proliferation of DVR’s, permitting TV advertising to be skipped by a viewing public not willing to tolerate programming interruptions.

    Conclusion: POS Marketing is More Important Now than Ever

    Having all of the above as the prequel, it is easily concluded that POS is more important now than it has been in well over a couple of decades. And, by more than one account, it is possible that increasing the quantity of beer POS is likely to increase a brand’s market share, if not the total demand for beer, generally speaking.

    But, it bears noting that US beer shoppers and consumers today have between 13,500 and 20,000 unique beer brands to choose from (NBWA data), and the most impressive “style” of beer growth over the past decade has come from craft brewers.

    Craft sales have grown, recently, at nearly 20% year-over-year while the macro-brewery brands have seen either virtually flat growth or, in some cases slow but steady decline. Given this reality, it is hard to imagine how POS marketing can and will stop, let alone reverse, macro-brewers declining sales volumes.

    If we had reached a point of craft saturation – where very few new craft breweries and brands were coming to market – I could argue the case for the growth of ABI’s sales of Bud and Bud Light if for no other reason than the expansion of the population.

    Yet, all available evidence suggests craft is nowhere near saturation. After all we’ve grown from 96 US brewers in 1977 to an estimated 4,144 brewers in 2015 (Brewer’s Association data, December 2015). 

    If ABI’s distributors could, financially, afford to sell 98% of their volume from ABI’s brand portfolio, evidence suggests their competitors would be the likely beneficiaries, picking up the ABI distributor’s jettisoned craft labels and fulfilling swelling market demand for craft.

    Essentially what we are witnessing is the limitation [based upon] the extent of the market (Adam Smith, “Wealth of Nations,” chapter 3, page 24). Fundamentally, this suggests that US demand for macro-brewers lagers and light lagers appears currently to be at maximum. 

    POS probably can increase the market share of Bud and Bud Light (vs. MillerCoors competing brands, for example). What is much less clear is if POS would actually prevent the steady encroachment of craft beer as a percentage of the total US beer market.

    After coming to the above conclusions, what is clear is that what is needed is not just more POS, but POS-tracking – to help speed POS to market and reduce POS waste, POS-measurement – to find the positive correlations between POS initiatives and sales, and POS-management – to provide suppliers, distributors and retailers with actionable information and to assure the middle-tier receives all available incentives from ABI and other supplier’s marketing support programs.

    To learn more about OnTrak Software’s digital tools to track, measure and manage your investments in POS Marketing, please click the following button:

    BeerCompanies

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    Resources:

    Center for Disease Control (CDC) MMWR Weekly (various) - cdc.gov/mmwr

    Anheuser-Busch Heritage - anheuser-busch.com/index.php/our-heritage/history/marketing-and-advertising/

    Wall Street Journal (WSJ) December 4, 2015 - wsj.com

    Whitepaper: “The effect of Point of Sales Promotions on the alcohol purchasing behavior of young people in metropolitan, regional and rural Australia” Published online: 06 Sep 2011 -ro.uow.edu.au/cgi/viewcontent.cgi?article=2155&context=artspapers

    Beer Business Daily November 23, 2015 (subscription required) - beernet.com/publications_daily.php?id=3645

    Industry Views on Beverage Alcohol Advertising and Marketing World Health Organization (WHO) - icap.org/portals/0/download/all_pdfs/Other_Publications/WHO_paper_annexed.pdf

    “Wealth of Nations,” Adam Smith 1727-1790 (Great Mind Series) Chapter 3, page 24.

    Research Report: “Alcohol point-of-purchase advertising and promotions: prevalence, content and targeting” online from POPAI - popai.com/uploads/downloads/Research-Alcohol-POP-Ads-Promo-2004.pdf

    Tags: POS Tracking Software, point-of-sale marketing, point of sale marketing software, Anheuser-Busch, Beer Business Daily, POS Marketing Software

    The Importance of POS Marketing in Demand Management and Forecasting

    Posted by Mark Fullerton on Mon, Dec 28, 2015

    The Importance of POS Marketing in Demand Management and Forecasting

    The Importance of POS Marketing in Demand Management and Forecasting resized 600Recently I was having a conversation regarding business analytics with a large mid-western beer distributor’s purchasing manager.  His job, as he explained it, is Math: “Demand management – and forecasting.”

    Fundamentally, the job is to make certain the distributor has enough inventory on hand and on the way (with a known delivery date) in order to have as little inventory as is feasible but at the same time retaining a very high service level.

    The goal of course is to reach 100% service level; although, in reality the carrying costs required for a 100% service level would noticeably decrease profits. So the technical service level goal used for calculations is something less than 100%. On the other hand, it should be noted that for products in high demand, a service level drop to about 92% will result in a reduction of overall revenue of 4% (Note 1).

    Key Factors

    Factors such as lead times, item’s seasonality, growth trends, new product introductions, and substitute products all figure into the job of purchasing manager. Other factors affecting demand are increasingly important, including retail pricing incentives and promotions are always in flux, and it follows that demand management and forecasting is, on a good day, a constantly moving target. Yet, with profit margins under pressure from all sides, proper demand management can have positive and profitable outcomes for distributors.

    POS Marketing and Demand Management

    Today, much more so than in previous periods, better demand management really is critical in helping to gain the extra pennies (or so) per-case saved – or perhaps earned – that distributors are looking for. And, increasingly, demand management involves yet another variable: Point-of-sale (POS) marketing and promotional programs designed and implemented with the goal of increasing demand, often within a few days of POS promotion program launch.

    Collecting POS data and correlating it to item sales data certainly facilitates the effectiveness of the distributor’s purchasing manager; but, probably of greater importance is the distributor’s ability to collect and report on POS data thereby helping determine the impact (and ROI) of distributors’ shopper marketing initiatives. In short, both purchasing and sales managers will benefit from tracked and measured POS marketing programs.

    POS Marketing and Forecasting

    As you know, beverage alcohol distributors’ sales and purchasing functions rely heavily upon forecasting to help predict future sales (and assure high service levels). Today, more than ever, forecasting requires that all data-points influencing decision making are recorded and at hand. In the past decade it has become even more important to know demand patterns, economic factors, competitors’ movements and the impact of pricing – perhaps the key component of POS marketing content.

    Until the advent of OnTrak’s digital tools, such as SignTrak, MenuTrak and PermaTrak, very little granular data pertaining to POS promotions was even captured, let alone able to be used in the forecasting formulas distributors rely upon.

    Until the advent of POS applications such as those mentioned above, ordering and tracking tools were virtually non-existent and therefore the impact of POS marketing was relegated to the qualitative and subjective realm – essentially anecdotal observations – not the quantitative realm: employing correlation or causal statistical methods. Now is the time to look into OnTrak’s suite of digital tools for today’s beverage distributors.

    To learn more about OnTrak’s digital tools for tracking your POS Marketing and positively impacting your demand management and forecasting activities, please click this button:

    OnTrak Products

    - - - - - - - - - - - - - -

    Note 1 - Grocery Manufacturers Association Study, 2002; URL:

    http://itsoutofstock.com/wp-content/uploads/2013/04/GMA_2002_-Worldwide_OOS_Study.pdf

    Tags: POS Tracking Software, point of sale marketing software, point-of-sale marketing management, Marketing At-Retail

    AB InBev Offers to Pay Distributors for Their POS Marketing

    Posted by Mark Fullerton on Sun, Dec 13, 2015

    AB InBev Offers to Pay Distributors for Their POS Marketing

    An Offer They Apparently CAN Refuse

    St. Louis Confidential

    As reported in the Wall Street Journal (WSJ) - December 4, 2015:

    “The world’s largest brewer last month introduced a new incentive program that could offer some independent distributors in the U.S. annual reimbursements of as much as $1.5 million if 98% of the beers they sell are AB InBev [ABI] brands. This according to two distributors who requested confidentiality because they were asked not to discuss the plan. Distributors whose sales volumes are 95% AB InBev brands would be eligible to have the brewer cover as much as half of their contractual marketing support for those brands, which includes retail promotion and display [POS] costs.

    AB InBev, which introduced the plan at a meeting of distributors in St. Louis, estimates participating distributors would receive an average annual benefit of $200,000 each.

    The company, which has more than 500 distributors nationwide, said the incentive program is part of a three-year plan to restore growth in AB InBev’s most profitable market. It includes additional marketing and sales commitments of about $150 million next year.”

    The St. Louis Confidential-Incentive Plan or what we’re calling “SLCP” is part of ABI’s new incentive plan to stop and hopefully reverse its declining US sales volumes. Once commanding nearly 50% of US beer market share, ABI’s output has declined by 11 million barrels since 2008 placing ABI, still huge by any standards, at a reduced market share of “only” 45%. Craft, once barely a footnote in annual beer production reports, has grown to an 11% market share as of 2014 (according to Brewers Association data).

    The WSJ article spends a fair amount of column real estate discussing what are termed as “competition concerns", going so far as to suggest that craft brewers fear that ABI’s POS incentive program (SLCP) could “squeeze out America’s craft brewing industry” or constrain US beer distribution (and distributors).

    On the one hand, I do understand how craft brewers could come to the conclusion that they will be under new (and unfair) challenges for shelf-space because ABI’s SLCP will be backed by the financial clout only ABI can bring to beer marketing.

    On the other hand, it is difficult to imagine that many distributors will jettison popular and profitable craft brands in the hopes that beer buyers and consumers will switch back to Bud Light from a craft brewed IPA, for example. As one consumer remarked, “Bud Light and Ranger IPA or Zen are simply not fungible products, beyond all being beers, that is.”

    According to another source, Beer Business Daily (November 23, 2015 issue):

    “First round of reactions from A-B wholesaler readers are coming in. Says one: ‘Already hearing that few [ABI] wholesalers will change unless they're already at or near 98%. Why would anyone in their right mind, give up the long-term success of a brewery in a category that’s up double digits [craft] for a partner that just bought SAB? The best way for AB to get us to 95% is not to ask us to jettison our craft brands or decline potential new ones, but simply to sell more of their beers.

    We'll stay pat.’"

    On the other hand, as of December 4, 2015 (WSJ), at least one distributor, Grey Eagle Distributing, St. Louis, has dropped a craft brewer because of the SLCP incentive program. According to the dropped craft brewer, Deschutes Brewery, Grey Eagle decided to drop Mirror Pond Pale Ale because the distributor “. . .had to make a choice to go with the incentive program or stay with craft.”

    Yet, several ABI distributors (who wish to remain anonymous) I’ve talked to have basically echoed the comments above from Beer Business Daily, one of them saying,

    If Bud Light, for example, would be purchased in equal measure to what I lost by dropping craft, it would be almost a miracle. The issue is our market probably consumes a little less than 10 million case-equivalents of Bud and just over 1.2 million case - equivalents of the crafts I distribute. Simply dropping the crafts from my sell sheet would not likely cause an equivalent increase in my sales of Bud Light. I mean Bud and the crafts just aren’t interchangeable products. In fact, Miller even has TV commercials that makes fun of people who say ‘I’ll have a light beer, any light beer, when what they should have said was I’ll have a Miller Lite beer,’ suggesting that Miller Lite is a completely different product than other light beers.”

    “What would happen is that another WD in my city would pick up the craft I dropped and my competitor would ramp up sales to our market demand of 1.2 million cases, meaning the revenue dollars would now go to my competitor rather than to me. Maybe I would sell a little more Bud Light than I did before – but that's a leap of faith most ABI WD owners aren't willing to take these days.”

    Where Does OnTrak Software Fit

    Now, we know at least one thing – we don’t have a crystal ball. We also know something else. Regardless of your adoption of the St. Louis Confidential Plan to take ABI up on their new POS incentive – or expense recovery – program, or not, there is something to consider.

    You will be placed in the best possible position of all to make the most of your decision if you have a digital tools that helps you Track, Measure and Manage your investments in retail promotion and display costs (your POS), not simply the ability to order POS almost as an afterthought.

    That being said, should you choose to embrace the new incentive plan, it will be incumbent upon you to have the data at the click of a mouse that our digital tools like SignTrak and PermaTrak captures and reports on in order to maximize your POS expense recovery and ROI.

    On the other hand, should you choose to “stay pat” and work with your craft and import suppliers, you’ll want to be able – with equal confidence and ease – to report on your marketing support of their brands, and lobby for their participation in-kind.

    For more information about OnTrak Software and the digital POS Tracking software tools many ABI beer distributors are using, please click this button:

    BeerCompanies

    Tags: POS Tracking Software, sign shop management, Anheuser-Busch, POS marketing, POS Marketing Software

    America’s Year of Beer – 2015 – Winning with POS Marketing

    Posted by Mark Fullerton on Fri, Dec 11, 2015

    America’s Year of Beer – 2015 – Winning with POS Marketing

    America’s Year of Beer – 2015 – Winning with POS Marketing resized 600Recently I reviewed some of the information published by the NBWA about beer, including brewing (suppliers) and distribution. Also, as a subscriber to Beer Business Daily, I regularly review additional content from BeerNet . I also consult several other sources for information pertaining to the US Beer Market, including: Brewers Association, datatante  and Beeradvocate.

    The Number of Brands

    According to these sources, there were somewhere between 13,500 and 20,000 unique beers (sku’s) available for sale to US beer drinkers in 2015. The number of new beers and new breweries coming on line is indeed impressive, too.  It is accurate to say that beer choice is currently under little, if any, threat of being consolidated. In some respects, beer brand and product diversity – shrinking at more than one point in time since the repeal of prohibition – is now exploding.

    The Growth of Breweries

    Here’s a quick overview of why the availability of beer labels is growing so rapidly. Technically, in 1932 there were 0 (zero) breweries in America. In 1933, however, after the repeal of prohibition, the number of breweries grew to 331. And, while going from 0 to 331 may seem impressive, in 1919, the year before prohibition was enacted, there were 669 breweries. In the interests of brevity, here’s a table showing the progression of the number of US breweries:

    Year

    # Breweries

    1933

    331

    1942

    523

    1957

    210

    1977

    96

    1992

    359

    2005

    1,447

    2014

    3,464

    2015 (est.)

    4,144 (Note 1)

    Brewery growth during 2014 was on a nearly 19% annual pace, and over the past several years, every year saw brewery growth climb at a higher percentage rate than the previous year. At the same time, major beer brands from AB and MC, while still dominating sales, were trending down while crafts began building on their meager footholds to grow by about 18% and even imports grew by nearly 7% (as compared to the overall market growth of just .5%).

    You would be correct in assuming that such growth of craft and imports in a virtually flat growth overall beer market came almost entirely at the expense of the sales of beer from the big national brands like AB and MC (macro-breweries). Craft – not too long ago, barely a footnote to annual beer production charts – grew to 11% of the US beer market by 2014.

    Perhaps in response to the growth of craft – or perhaps just because it’s good marketing – AB produced what could be seen as a “defense against craft” ad: Click Here for Video >>

    Of course, retaliation ensued from a plucky craft brewery: Click Here for Video >>

    Winning with POS Marketing

    The point is, since the repeal of prohibition, the beer landscape has undergone substantial changes and we have arrived at a point in time where the American consumer is faced with at least 13,500 beer brands from about 4,000 breweries; and the consumer’s appetite seems to know no limits. We’re currently enjoying a cornucopia of choice when it comes to our favorite libation – and all indications are for the number of choices to keep on growing.

    For many local and possibly for even some regional beers, word-of-mouth “advertising” will probably be insufficient to keep attracting new customers. That is, word-of-mouth promotion will unlikely be enough to compete with the seemingly weekly arrival of new beers vying for both shelf space and shopper’s dollars.

    Clearly in a market showing virtually no signs of saturation, beer sku’s – representing both new and existing brands – will only be able to survive, grow and prosper if retail promotions are tracked, measured and managed using digital tools that stimulate shopper demand and provide readily available point-of-sale (POS) marketing data to correlate to product movement data at both individual and aggregate retailer locations. The deployment of such tools will facilitate the analysis of retail promotional activities to see if POS initiatives are meeting sales objectives and ROI targets.

    In other words: Since beer (and other alcohol beverage products) stands in the virtually unique position of being marketed at-retail using materials and campaigns developed and delivered by beer wholesalers, it can be concluded that the most successful brands (and distributors) will be those who encourage the adoption of currently available digital marketing tools to manage their promotional spending to achieve optimum ROI on their POS spending.

    For more information about OnTrak’s digital tools for beer distributors please click this button:

      BeerCompanies

    - - - - - - - - - - -

    Note1: 2015 Brewers Association data

    Tags: POS Tracking Software, Marketing At-Retail, Beer Business Daily, beernet, POS Marketing Software, brewers association

    NBWA Reflection: POS Tracking Software More Important Than Ever

    Posted by Mark Fullerton on Thu, Nov 12, 2015

    NBWA Reflection: POS Tracking Software More Important Than Ever

    As I write this, we have just returned from the 2015 NBWA Convention in Las Vegas.

    First, our gratitude to Craig Purser and his team for another job well done!  They are the best in the business for helping us get in direct contact with beer wholesalers that need our POS Tracking and Line Cleaning Software solutions. Thanks Craig! 

    More Beer Brands Means POS Marketing Software Is Even More Important resized 600The Amazing Number of New Brands

    One of the key things that caught my eye again this year was the ever increasing availability of beer choices offered to the US retail beer buyer: Now well over 13,000 named brands.

    Thirteen-thousand!  Let that sink in just a moment.

    One of our greater-Cincinnati party stores probably has 1,300 beers to choose from. And, although the number of new craft beers continues to be added to the store’s inventory faster than I can keep up with, the number of beers sold only appears to be growing steadily, but not necessarily at great speed. 

    Perhaps by Christmas, the number available under one roof will have climbed by another 50 or so, then after the holidays there will be some that go away, never to return; and then some new brands that will be added. There is growth, but I don’t see 13,000 beers for sale at one retailer anytime soon. I would imagine that the number of beers at this retailer may approach 1,450 by fourth-quarter 2016. But, come to think of it, this is much too large a number, all in the same place at the same time, for most of us to get our heads around. 

    Thirteen-thousand different beers – it boggles the mind, but 1,300 beers are also daunting.

    Take a Look at a Grocer’s Bar

    This month, a new Super-Kroger’s opened in Cincinnati.  Have you heard about the “Market Place” concept?  This Kroger’s is larger than three football fields laid end-to-end.  Inside, near the center, this Kroger’s has an impressive bar with some 12 taps, and the beer on-draught changes regularly and frequently. It also has one those “eno-tap” contraptions of tubes and faucets allowing wine to be “tapped” from up to 12 different bottles and delivered in two-ounce pours. 

    All this considered, the infrastructure and design elements taken together, this “island” inside this enormous Kroger’s store, is larger than many stand-alone bars that I have been to over the past 30 years. Flights of beer and wine seem to be the first thing patrons go for, followed either by a full glass of wine or mug beer; next followed by the ritual filling of what looks to be an infinitely large supply of “growlers”, initially supplied at no-charge for beer-buying customers.

    Twelve different beers on tap, twelve different wines on tap – even this much variety and taste-ability can almost overwhelm.  And, get this, the in-store bar also serves “light-bites”, elaborate cheese plates and tiny gourmet sandwiches specifically chosen to compliment the beer and wine choices offered. Most of the half-dozen “bar tenders” seemed to know nothing about the tap beers, and even less about the wines. However, there was one guy who was on the ball, and available to describe the various beers, and one would presume, also has some wine skills, too.

    Point-of-Sale (POS) Marketing Could Really Help

    Talk about your POS marketing – the entire set-up was designed to promote the products and also be the point of sale for choosing the beverages you planned to take home with you. 

    Well, I sat there sipping my beer flight  and marveled at what this entire “alcohol island” must have cost to build and how much it costs to maintain with, one, two, three, four – five employees, plus the guy who really knew the products. 

    Then I noticed two guys, approaching the bar, pushing a hand truck carrying a new barrel. These gentlemen weren’t wearing the Kroger golf shirts like the other folks behind the bar.  No, these guys were wearing different colored golf shirts that I identified as they closed in. The new peoples’ golf shirts were embossed with the logo of a prominent Cincinnati beverage alcohol distributor.

    Imagine that: Kroger’s has its own wholesale distributor (WD) sales reps keeping the Kroger taps flowing. This means these folks were not on the Kroger payroll, but apparently were “on site” on a Saturday night to ensure the beer would not stop flowing.  I don’t know if the distributor helped Kroger’s pay for the bar within a grocery store concept, but it certainly seemed that the WD’s reps were given complete freedom to pull the empty barrel and start a new one and even interact with Kroger’s patrons. These WD reps were treated as fellow employees as far as I could tell.

    When I ask certain questions about the extent to which goods and services are treated as POS, I sometimes feel I get evasive answers, almost as if what I am asking is, somehow, a bit of a gray area. One thing that I know is that the tap pull handles are supplied by the beer WD’s as are the table tent/menus listing the bistro’s light bites. And of course, the two reps, even if they are simply on-loan from the beer WD aren’t working without pay.  Is all of this expense not considered POS? Looks like POS to me.

    Who’s Paying for All This POS?

    Once again, my head started spinning and it wasn’t from the 10% ABV craft beer I was imbibing. Rather my head was spinning as I contemplated what certainly seemed to me to be perhaps the most expensive POS I have ever seen. If the bar’s construction costs were somehow lessened by the WD – and I have to assume there was at least some form of “help” offered by at least one of the various WD’s whose products were for sale – then what we have inside this grocery store is an investment in both permanent and temporary POS made by and continuing to come from at least one if not more WD’s.

    And Who’s Tracking and Managing These POS Costs?

    Of course I wondered if any WD was tracking, managing and measuring the effectiveness of the POS outlay on display. My assumption is that marketing monies had been poured into the store long before the first shovel-full of dirt had been turned over. I imagine there is a quantifiable ROI on the distributor’s point-of-sale promotional spending at this store.  I also believe the distributor is acting based on blind faith and really has only a vague idea how much was and is spent to maintain what appears to be a long-term commitment to gaining brand dominance, one Kroger’s store at a time.

    Here’s What’s Going On

    With thirteen thousand beers on the market, the sales “winners” can only be, and will only be, those brands that track, measure and manage the vast outlays of capital required at the point-of-sale just to get noticed

    Let’s face it, another $100 million spent on TV ads for either Bud or Miller beers haven’t really done all that much the past few years to “sell more beer” – either because everyone already knows Bud Light or Miller Chill, or because they don’t care what is advertised on TV, often fast forwarding through TV ads.

    But when the beer shopper is actually at the place and time when a buy can be made, that is when advertising – POS – is “super-effective”.  Does anyone actually believe another $10 million Super-bowl ad for a well-known virtual commodity like light beer will move the sales needle anymore? On the other hand, time and again the data positively correlates POS marketing to an increase in sales.

    It is long past time to wake up and start marketing like the big business that most beverage distributors today are. It’s now time to market at the point-of-connection between the shopper and your product; and, it needs to be accomplished using digital tools that provide the same degree of accountability and manageability as your order entry, purchasing, warehousing and financial reporting systems.

    Time’s a-wasting.

    How OnTrak Software Can Help!

    OnTrak now offers 5 Digital POS Tracking Tools for today’s beverage distributors: SignTrak (for custom, temporary signage), PermaTrak (for permanent POS), MenuTrak (for custom beverage menus), SampleTrak (for beverage sampling), and our newest offering, LineTrak (for draught line cleaning).

    For more information about our POS Tracking and Line Cleaning Software, please click this button:

          OnTrak Products

    Tags: NBWA, POS Tracking Software, point-of-sale marketing, point of sale marketing software, point-of-sale marketing management, Marketing At-Retail, POS Marketing Software, Kroger

    A Recent Customer Conversation About POS Marketing Management

    Posted by Mark Fullerton on Mon, Nov 02, 2015

    A Recent Customer Conversation About POS Marketing Management - The Costs and Supplier Recovery

    If this is your first time on our site, or first time checking out our blog, let me give you a very brief introduction to OnTrak Software.

    About OnTrak Software

    We are a point-of-sale (POS) marketing technology company that helps our customers – primarily beverage alcohol distributors – Track, Measure and Manage their investments in POS marketing materials using our suite of cloud-based Digital Tools. We call it POS Tracking Software.

    For nearly ten years, our customers have been telling us that POS costs and speed to market are out of control – one’s too high and one’s too slow. One of the reasons for these twin negatives are the traditional paper forms for ordering, producing and delivering POS promotional materials just can’t keep up with the POS demands from suppliers and retailers.

    While suppliers often have generous recovery programs designed to offset the distributor’s investment in graphics personnel and equipment, actually getting those marketing recovery programs to provide benefits to the distributor can require extensive reporting regarding the types and effectiveness of the POS initiatives.

    OnTrak Customer Example

    OnTrak’s suite of Digital Tools addresses all of these issues – but you probably figured we’d say that.  Let’s continue by discussing one of our real live customers, a “middle-plus” market distributor of beer, wine and spirits wholesaler covering several states and representing dozens of suppliers.

    What Did Your POS Cost?

    I recently asked our customer how much they spent on the POS orders they processed in September of this year. The answer was, “I don’t know off the top of my head, but I can get it for you in a couple of minutes.” Literally, a few minutes after I hung up the phone, I received an email from my customer, one of the larger medium-sized beer, wine and spirits distributors in the US, with the number $41,995.40. In the case of our customer, the dollar figure they noted was their cost for the production of a very specific type of POS marketing – menus: Mostly wine menus.

    Typically we see “beer dominant” distributors spending on POS increase during the late spring and summer months and “wine dominant” distributors spending on POS spike during the last 3 or 4 months of the year – more or less tracking with the busy seasons for beer vs. wine and spirits sales. This customer is clearly wine dominant and uses our MenuTrak product to automate beverage menu creation and supplier bill-back recovery.

    How Much Did You Recover From Your Suppliers?

    Well, I couldn’t just let that nearly $42,000 cost figure stand without knowing how much of the expense they recorded would be eligible to be recovered from their various suppliers marketing allowance programs.

    So, I asked our customer to tell me the amount recovered.

    This time, the answer was given while I waited on the line: $41,972.87.

    Nearly 100% of the cost?

    I was on the phone, in total, about 5 minutes. I did ask how long this report would have taken without the business analysis report writer than comes with MenuTrak.  The response was: “Days. We wouldn’t have been able to run the report for a week or two after we closed the previous month; also there are virtually never any questions about the reports or the amounts detailed, everything is laid out by supplier, customer, product promoted and associated costs via the POS. Every detail a supplier requires is on the report.”

    So, we have an over $100M beer, wine and spirits wholesale distributor who is able to account for what is advertised at the point-of-sale, when, how much the POS cost to produce, and how much of that cost is offset by the suppliers. The production of the report took less than 5 minutes.

    The Bottom-Line Benefits Of OnTrak

    This distributor uses the OnTrak products to place POS orders, track the flow of work through production and delivery, measure, record and report costs both to “internal customers” and externally to suppliers, ultimately allowing the distributor to manage the expenses of perhaps their second largest expense item, after payroll or fuel – POS promotions.

    On top of these features, our customer is enjoying the benefits of improved POS accuracy – that is, there are fewer errors and reworks – getting their POS to market more quickly, and spending hours generating and filing recovery reports with suppliers, rather than days or weeks.

    One additional and very much appreciated (but not planned for) benefit is the improved cash flow, with respect to recovery dollar settlements, due to the OnTrak recovery reports being able to be generated quickly, completely and accurately with all of the data required to generate quick settlements of recovery dollars due from suppliers.

    OnTrak now offers 3 other Digital Tools for today’s beverage distributors in addition to MenuTrak: SignTrak (for custom temporary signs), PermaTrak (for permanent POS), and SampleTrak (for beverage sampling.

    For more product information, or better still, to request a live demonstration of any of our products, please click this button:

          ProductDemonstrations

    Tags: POS Tracking Software, point-of-sale marketing, point-of-sale marketing management, Marketing At-Retail, POS Marketing Software

    The Top-line Impact of Tracking, Measuring and Managing POS Marketing

    Posted by Mark Fullerton on Tue, Oct 20, 2015

    The Top-line Impact of Tracking, Measuring and Managing POS Marketing and Promotional Materials

    A Look-Back Over the Last Eight Years

    In the beverage alcohol distribution industry, the spiraling growth of spending on point-of-sale marketing (POS) has been an issue of some concern for most of the last decade.

    Prior to 2008, however, beverage alcohol – beer, wine and spirits – sales could be pretty much counted on to be better this year than last and it was almost a sure thing that next year would be better still.

    In response to the circumstances imposed on distributors during the ‘Great Recession’, some pursued consolidation (either by looking to acquire and grow, or be acquired in order to avoid dire consequences); some pursued adding many new brands and products to their portfolios; and almost all began in-earnest self-examinations to determine where money could be saved and where money could be invested to drive additional sales.

    The Top-line Impact of Tracking, Measuring and Managing POS MarketingManaging the Cost of POS

    It is true that most distributors have been inefficient in at least one highly-visible but apparently difficult to manage area of their business – POS marketing. And, due to the fact that POS is believed by virtually all distributors to be very effective at keeping and capturing additional market share, many distributors have done little to manage the costs pertaining to the ordering, production and placement of POS for fear of losing sales to competitors who beat them to the punch in getting effective POS placed at-retail in a timely fashion.

    Much of the above noted self-examination was to determine both the cost and ROI of virtually every expense in a distributor’s operations. Delivery trucks and maintenance costs, to warehouse lighting, to diesel or bio-diesel fuel procurement and several other “green” initiatives, to the often called “black hole” of POS were all considered fair game for the efficiency experts to dig into this time around.

    Reducing the Cost Per Case Delivered

    Sound familiar?

    It should – the last eight years have seen small, medium, large and super-large distributors eager to find solutions that will reduce their “cost per case delivered.”

    Think of it this way: Imagine a 10M cases (sold per-year) distributor who implements a system that will reduce his cost per case delivered by just one-half-cent. Such a system would increase the distributor’s bottom line by $50,000. 

    For the purpose of our discussion, if the average selling price per case is $15.00 and the after tax profit per case is $.50, this distributor would have to increase revenue by at least $1,500,000; and, the quantity purchased, warehoused and delivered would need to increase by 100,000 cases. Of course, it is always possible the distributor may have to increase payroll, warehouse management and transportation expenses proportionately to provide the logistical support required.

    More Brands – More Need for POS

    As beverage alcohol distributors continue to expand their brand and product offerings, it is no wonder they’re now running more promotions, and spending more on POS campaigns, and doing it more frequently than ever before. POS, from custom to permanent signs, menus and B2B sampling continues to increase beyond the tracking capacity of even the most comprehensive spreadsheets.

    Even if the spreadsheets are kept up-to-date, there is always the time it takes to consolidate the spreadsheet data from the various sales teams and correlate POS data to revenue or case sales. Just a few short years ago, it was not uncommon for a beverage alcohol distributor to have, at most, only a couple hundred SKUs within a few dozen brands.

    Today’s distributor – especially now that distributors have added non-alcohol beverages and an ever-growing portfolio of spirits, wines and craft and import beers – will find it virtually impossible to keep track of POS ordering, production and placement. Spreadsheets were put in place in response to the inefficiencies of completely paper-based POS tracking systems, but today, tracking using spreadsheets is inefficient and many have simply reached the limits of a spreadsheet’s scalability.

    The Growing Demand for Digital Tools

    Today, digital tools are required to track, measure and manage POS spending. A growing number of distributors have come to the realization that POS ordering systems are or in some cases already have reached their limits of sustainability – all they can do, typically, is place a POS order. The most agile distributors, often accustomed to operate (since 2008) with a reduced or no IT department, are turning to SaaS (cloud or Internet-based) POS management systems that allow them to transition from completely manual or spreadsheet based tools to fully digital tools – giving them the time to focus on creating, managing and fulfilling demand rather than chasing paper.

    OnTrak’s POS Tracking Software

    Of course, the digital tools I’m referring to here are from OnTrak; products like SignTrak®, PermaTrak®, MenuTrak™ and SampleTrak™ allow you to extract key POS spending data into reports and spreadsheets that enable beverage distributors to see a complete picture of where what and when POS was deployed, what products were promoted, and how much was spent over the past week, month, quarter or trimester.

    A correlation of sales of products to POS promotions is also possible so that distributors can actually see the top-line impact of their POS initiatives. Supplier reports can also be created with a few clicks, thus compressing the time from POS spending to the recovery of supplier POS dollars (allowances). Suppliers can have much more immediate insight into the impact of the POS sponsorships and co-op allowances. Data compilation, at one time taking so long, reports were delivered long after the promotional period had passed, is now compressed to matter of a few short hours often providing actionable insights for the upcoming promotional initiatives.

    Reports correlating POS placements to sales, once thought to be either too time consuming, prohibitively expensive or virtually impossible, can now be run daily if necessary allowing near immediate analysis of the effectiveness of a current POS campaign. Using digital tools facilitates POS campaign management and insight into POS promotions, costs and ROI analysis.

    OnTrak Customer Feedback

    A large mid-western distributor recently told OnTrak:

    “The effectiveness and efficiency gains provided by OnTrak’s digital tools for POS have allowed us to do more effective POS promotions. The sales teams can now see what works and what doesn’t; we’re all much more aware of the top-line impact of our POS spending. We’ve become more efficient. OnTrak’s products have cut our costs by one-half cent per case delivered. ”

    OnTrak’s Suite of Digital Tools Enables Our Customers To:

    • Have visibility into POS promotional activities
    • Streamline POS ordering and production, and improve communications between the in-house POS organization and the trade reducing errors and speeding POS to market
    • Eliminate guesswork as to which POS works
    • Organize all POS tracking, production, measurement and management data into a central point of control
    • Provide anyone who needs access to POS campaign information with access to real-time POS to sales correlation

    All of the above enables you to quickly see and evaluate the top (and bottom) line impact of your POS campaigns.

    Seeing is believing!

    To learn more about all our products, including LineTrak™ (which provides tracking tools to manage draught line cleaning activities), please click the following button:

    OnTrak Products