How To Sell More Wine? – With Better Point-of-Sale (POS) Marketing
Our blog’s focus, generally speaking, is on measuring and managing at-retail promotions or at the point-of-sale marketing initiatives. This can include temporary and permanent signage, food and drink menus and business-to-business beverage sampling – All promotional activities that convert beverage shoppers into buyers.
Having said this, I want to clarify that we here at OnTrak Software don’t typically get involved in the content of your POS materials. What we do care about is in delivering solutions to track and manage these point-of-sale (POS) marketing efforts for beer, wine and spirits wholesalers, helping them closely monitor the impact of their POS investments.
This particular post, however, will diverge somewhat from that formula based on my recent dining experiences in Orlando while I was attending the April 2015 WSWA conference. The fact that I am a consumer of beverage alcohol products has been helpful in putting the following together.
The Dining Experience
You enter a restaurant and are greeted and seated by the host or hostess – part of the routine includes the presentation of the food menu to each diner and the presentation of a special stand-alone wine menu to the diner who is identified as the wine buyer for the group’s meal. The food menu typically will be two or sometimes three pages; the wine menu, on the other hand, is often many pages with wine listings on both sides of every page.
On the second night of the 2015 WSWA conference, our group was directed to one of Orlando’s top steak houses – and the above scenario played out basically as noted. I was given both the food menu and the wine menu (most likely because I was buying) and here is what I noted:
The food menu was four pages, not two – but the first two pages contained a listing of accolades praising the restaurant’s quality and proudly pointed out its Zagat rating; page two explained why the restaurant was different from other high-end restaurants. Pages three and four contained the actual menu of items we could choose from. Nine entrees, plus three surf and turf variations were offered. There also were about a dozen appetizers, plus three salads, oysters and a mixed seafood grill. Fifteen side items plus the mention of the special of the day completed the food menu.
Sound typical, yes? I thought so.
Here’s some of the information pertaining to one of the entrees listed:
Kansas-City Strip (24 oz. bone-in): 34.95
- Known for its richness; coupled with our forty-five day aging process and open-flame cooking produces the juiciest of steaks. With a creamy horseradish sauce, add 3.50.
Again, what you would expect from the food menu at a high end steak house.
Next I opened the wine menu – let me modify that: Next I opened the thirty-three page wine menu! Let me start off by telling you that as a rule of thumb I am rarely, if ever, intimidated by wine lists, even when I know very little about the wines on them. This wine list might just be the exception to the “intimidation rule,” however.
Here’s how this book was organized: Thirty-three pages, listing offerings first by grape (the first seventeen pages) then by country of origin (the next twelve pages) then by half-bottles, dessert wines and by-the-glass features. You may think it a bit obsessive of me, but the list contained an average of thirty wine choices (including sparkling wines and Champagnes) per page. The wines were listed in no particular order as far as I could tell unless it was from highest price to lowest (within grape or country of origin).
The listings were single-spaced and the roughly one-thousand wines became a blur as I kept turning page after page after page. The first item listed on page one was a Champagne; and, at $600, was by no means the most expensive bottle on the list; Screaming Eagle (a 2003 California Cab), at $3,500, grabbed that honor – and that one was at the top of page nine. Another twenty-three pages, mostly consisting of multi-hundred dollar per-bottle wines followed – it was almost overwhelming.
Now, imagine if the food menu had been even ten pages, let alone thirty-three. I suspect most of us could “ingest” a ten-page food menu, consisting primarily of meat and fish items without much problem, especially if the restaurant listed the items as they had listed the “Kansas City Strip” – complete with a short description of the item, perhaps something like this:
Cedar Plank Roasted Alaskan Salmon: 29.95
- Alaskan King Salmon topped with a light parmesan horseradish and dill aioli; cedar plank roasted over an open flame – delicious.
What’s Wrong With This Picture?
After a wonderful and delicious evening, we returned to the Grande Lake JW Marriot Hotel for a night-cap at the lobby bar. Laying on one of the tables in the lounge area was the April 2015 issue of Beverage Dynamics – I began somewhat mindlessly paging through the magazine and all of a sudden came across this interesting – and considering my evening’s dining experience, compelling – item:
“There is still a major diner intimidation with wine lists and studies show they [customers] continually order the third item from the top . . . (not too expensive and shows minimal thought).”
Informally, I began canvassing wine distributors and asked them if they produced “restaurant and bar” wine menus (POS marketing by another name) for their customers.
Those that did I asked follow up questions:
#1. Do you think patrons are intimidated by the wine menus handed to them by most restaurants?
#2. Do you think you could sell more wine and more variety of wines to your customers and, in turn, they to their customers if wine menus offered a few descriptive terms and “awards-won” information about the individual wines on the list – somewhat like the brief descriptions provided for entrees?
Some distributors said they’ve been trying to figure out how to provide this information on their customers’ wine lists for years. Every distributor I asked agreed that wine menus are intimidating and that providing information about the wines on virtually any wine list would go a long way toward increasing the number of items sold and also would likely increase the quantity sold, either by the bottle or by-the-glass.
Beverage Dynamics cites a 20% increase in by-the-glass sales and in bottle sales for restaurants that provide “wine education” to customers.
Whether you call it wine education or wine POS marketing is up to you. What is clear, regardless of what you call it, providing information about the wines on your wine menus and lists will very likely be correlated with both a widening and deepening of sales of your portfolio of wines marketed via menus.
“This is such an obvious way to dramatically increase by-the-glass and bottle sales, it’s a wonder we haven’t done something like this a long time ago.” – a top-ten wine and spirits distributor executive at the 2015 WSWA conference.
For more information on how to make your menus and lists – wine POS – work to increase sales of your “varietals and vintages,” click this button:
Point-of-Sale (POS) Marketing - Focus on What’s Important and What Works to Achieve Your Business Goals
POS Marketing in the beverage industry means so much more than discounting and loyalty programs. It means managing, controlling and measuring the marketing at-retail process for ordering, producing and placing custom and permanent signs, beverage menus and beverage samples.
The decision to buy a beverage is made within seconds of entering a grocery aisle, or shortly after sitting down at a restaurant table. Only then is the effect of outstanding marketing at-retail clearly understood and appreciated.
If you are a supplier or distributor of beverages, for our purposes and our target prospects and customers, I urge you to write down at least one or two of the goals you have for your company. Looking over these goals of most beverage companies it is not surprising to see “growth” at or near the top of the list.
I’m going to assume growth means “more revenue”, and any elaboration on that theme would include the condition that top-line growth “will not come at the expense of the bottom line,” or would simply be stated as “improved revenue or profit.”
What POS Works?
In this blog we won’t come close to exhausting the subject of the importance of putting point-of-sale (POS) marketing materials, campaigns and promotions first.
Rather we’ll spend our time on suggestions that are focused on What POS Works. But don’t forget that POS initiatives are the key marketing measures you should be taking if your goals include “improved revenue and profit.”
The Consumer vs. The Shopper/Buyer
Much is written about the consumer. But it should be noted that the consumer is really only relevant to you if the shopper/buyer of your beverage is also the consumer. It’s not that the consumer isn’t important or relevant; it’s just that unless the consumer executes a shopper’s specific behavior, like choosing and purchasing your product from the retailer’s shelf, it doesn’t really affect your sales.
Without the purchase of your product, consumption just isn’t possible, obviously. This means that you must focus on the shoppers when they are at a place and time where and when they can and want to buy.
If you’re a beverage distributor, your reps probably have it fairly easy getting orders from retailers for the products you sell. In fact, if ordering products was all there was to “success” in selling beverages to Kroger’s or Piggly Wiggly, you could argue you don’t really need an order taker. On-line order taking could certainly be employed simply to place an order for let’s say 144 cases of beer.
Your rep’s real value lies elsewhere – certainly as the retailer is concerned and perhaps even more so for you, the distributor. Assume for a moment your rep “sold” 144 cases of one of your products to your customer, the retailer. Next, think what happens if the retailer doesn’t sell your product to his customers - The individual shoppers who walk the aisles looking to buy all kinds of products, including yours.
If your products don’t sell, the retailer may simply ask you if he can return the products purchased from you and receive a credit.
Now, here, we’ve reached a point where we could provide much more information regarding the mind or even the habits of the shopper. For the purpose of this blog we won’t go into that.
Three Effective POS Marketing Strategies
If you’ll accept the fact that you do need a particular message at the point of sale in order to increase sales, we will present three effective POS marketing strategies you can employ. We’ll also suggest a method for demonstrating what POS marketing materials really are most effective and provide the highest ROI.
1. Establish Brand Affiliation
If you work for a beverage alcohol distributor in marketing communications, custom POS design and development, or in the sales department, it is important that you think about your POS displays as the “always-on” promoters of the benefits and value of the product you are promoting. If the product is from a well-known and successful brand, it is also important to associate the product being promoted by your POS initiatives/materials with the Brand.
2. Focus on the Product - Focus on the Reason to Buy
Every POS sign or display should be produced to achieve the goal of selling more of the specific product being advertised. Typically POS is not designed with the goal of strengthening Brand Identity or a Brand’s Message, especially if the product being promoted is from a well-known and popular brand.
If your POS’s primary purpose is to announce a new or lower price in order to stimulate sales of an existing product; or grab market share from a competitor; or to introduce a new product from a well-known brand; it is important that your POS focuses on the product and price as simply as possible, and not so much the Brand.
If price is often used to sell your product, make sure the POS materials are as clear, clean-looking and simple as possible in identifying what is on sale, for what price and for how long. Product benefit messages are not important here, and they would actually distract from the selling point in this case - Low Price.
3. Bigger is Better - Less is More
Remember, when ordering POS for your retail customer, the product’s category and the number of products that you will be in competition with for the shopper’s attention. If the product’s category has many items, it has been demonstrated by our customers that one or a very small number of large-scale impressions (signs) increase demand more than many smaller impressions with a similar message. Shoppers see dozens, often hundreds of POS messages per trip to their favorite retailer – and many shoppers tune out all but the biggest impressions.
The OnTrak Solution
Without tracking, measuring, and visual verification to prove placement, the above three strategies will, generally speaking, work in some fashion.
But you won’t really know what worked best or even when. Therefore, to optimize the effectiveness and ROI of your POS marketing campaigns, you will need a system to help you track, measure and manage your POS initiatives from ordering, through production, placement and replacement.
To learn more about the OnTrak Solution, please click this button:
The Key to a Point-of-Sale (POS) Marketing Tracking System: Business Intelligence!
If you’re a wholesale distributor of beverages and an OnTrak application software user, I’m going to assume that by now you are either an expert or well on your way to becoming an expert in POS tracking.
This includes the accurate and efficient capturing your POS promotion orders from your sales reps in the trade, and approving, assigning and producing your orders once they have been accepted.
I’m also going to assume you’ve become quite adept at creating ad hoc reports requested by distribution sales management and your supplier’s sales managers.
Now, I’d like to take your expertise to the next level.
POS Business Intelligence – What Is It!
I’d like to offer you suggestions on increasing the value of your POS marketing campaigns by using the data stored in the OnTrak applications to create POS Business Intelligence
POS Business Intelligence can take the form of a report or a screen view that causes someone in your organization to take action to achieve a certain, hopefully beneficial, sales outcome. If you’re like most system’s users, much of the reporting and other information that comes from just about all application software is of the “good to know” variety. This isn’t meant to suggest that data that is used to provide confirmation of an event or fact, or produce invoices and other outputs, like picking tickets, purchase orders and shipping manifests, is without value.
Rather, it is meant to suggest that systems like MenuTrak, PermaTrak and SignTrak, can be used to generate information that can help you increase your productivity (sales or ROI) and decrease the potential negative (out-of-stock items) of your POS initiatives.
Beverage distributors, especially those who both create their own temporary POS and buy permanent POS promotional materials, face a unique challenge – and likewise have a unique opportunity. A challenge and opportunity that their suppliers may not typically see with respect to POS promotional campaigns.
POS Promotions Work
As you know, POS promotions work. If your beverage distribution organization creates and places signage – or other forms of POS including menus, tap-pulls, lit or moving permanent signs, etc. – history suggests sales of the items being promoted will most likely increase. And, if your POS informs shoppers of a sale price, increased sales are a virtual certainty.
Most beverage distributors manage thousands of SKU’s these days; and they also must constantly manage multiple POS promotions. Even though distributor route accounting systems (RAS) usually have some form of inventory management application, retailer stock-outs can occur and are more likely when items are promoted at-retail, using POS signage.
Due to the effectiveness of most POS materials, when items are promoted at-retail there is a chance to make extra profits or a chance to lose potential sales. The question is: What can you do to facilitate the former and eliminate the latter?
Tracking and Managing the Impact of POS Promotions
The answer to that question requires that you have a system in place that allows you to track, measure and manage your POS activities. POS promotions typically create special selling situations and the potential for out-of-stock situations. These stock-outs, or lost sales, can be mitigated by correlating historical POS promotional data available in OnTrak applications, with the sales data collected and stored in most route accounting systems’ data bases.
Distributors are uniquely positioned to know where, at individual customers, the POS materials have been placed, and by reviewing historical data will also know the likely impact of a certain type or style of POS and the impact of the message conveyed. Using the data from the POS management system correlated with sales data from the RAS system to forecast “demand during a promotional period,” stock-outs can be substantially reduced or eliminated, thus improving the quality of future promotion period forecasts.
One OnTrak customer determined that there was a measurable improvement in sales when they shifted their POS promotional approach from “several small” to “fewer large” signs. Now, when they plan for a POS campaign, they know “bigger is better and less is more” in terms of the impact on sales.
They use key OnTrak data elements correlated with data from their RAS to determine the required product order quantity, for each customer where there will be a POS promotion, based on historical information. In other words, they use OnTrak POS data correlated with sales data collected during the promotional period from their RAS system to create Business Intelligence. In their case, the actionable information has substantially reduced the number of stock-out’s their retail customers experience.
Naturally, the reduction of stock-outs increases both the retailer’s and the distributor’s sales and profits; and sales forecasting accuracy is improved for subsequent POS promotions. Of course the increased sales will be noticed by the distributor’s suppliers. Beyond the obvious benefits to all members in the supply chain, additional benefits accrue to distributors. Since suppliers are often co-opting promotions, or paying some or all of the distributor’s costs, the reporting capabilities provided by the OnTrak POS management system can assure them that they are receiving full value for their promotional spending.
By now, it should be clear that the “secret sauce” that will improve the productivity of your POS initiatives is the data that is used to create actionable information – reports using the distributor’s RAS sales data correlated with POS promotional data stored in every OnTrak application. Because distributors using virtually any RAS system and at least one OnTrak application can better forecast sales increases attributable to POS campaigns, out-of-stocks can be virtually eliminated and the most effective POS campaigns can be employed repeatedly and adjustments can be made as needed.
Improving Relationships with Retailers and Suppliers
Using OnTrak’s applications can increase the retailer’s confidence in the distributor’s sales forecast making it more likely that the distributor can increase the retailer’s order quantities to avoid stock-outs. Suppliers, too, will have increased confidence in the effectiveness of their distributor’s POS initiatives making it considerably easier to pay the distributor’s POS cost recovery claims.
Using a combination of distributors’ RAS sales data, correlated with their POS promotions data to create POS Business Intelligence – in the form of suggested retailer item order quantities – can help reduce stock-outs during promotional periods thus increasing both revenues and profits. Also, such actionable information can take much of the guesswork out of POS campaign planning.
For more information about OnTrak’s Products, please click this button:
Point-of-Sale (POS) Marketing First – Every Other Marketing Type Second
Several of the blogs we’ve posted here have suggested that traditional marketing channels should be led by the marketing at-retail channel – also known as the shopper or point-of-sale (POS) marketing channel.
A growing body of evidence suggests that the most effective – and we believe the most efficient – marketing should begin with POS marketing. That means POS or shopper marketing spending should come first, followed by traditional media marketing spending.
Some ad agencies and marketing insiders long ago declared that POS Marketing should only be considered to be in-support of traditional media buys. Today that simply is no longer the case.
Media fragmentation alone – hundreds of TV channels and perhaps millions of web sites – has driven up the costs and increased the difficulty of targeting messages to a specific market. Today, non-traditional media, referring to mobile, social and perhaps most importantly POS marketing initiatives are the media types that have the greatest influence on shoppers becoming buyers.
Beverage Alcohol Industry
Beverage alcohol shoppers become buyers at-retail, not while watching TV or surfing the net or reading magazines and newspapers and certainly not when driving by billboards and other road signs. But, for some reason, marketers spend disproportionately higher amounts on traditional media advertising than on POS marketing. Considerably less could be spent on marketing if more of it was placed where the actual buying occurs. Further, the return on investment for POS marketing would likely be significantly higher.
I would go so far as to say that since the non-traditional media types – especially POS marketing programs – are today the most powerful drivers of sales available for beverage alcohol, POS should be the foundation upon which all other supportive (i.e., traditional) marketing should be built. The focus of a marketing program that has as its primary goal “increasing the top line” should begin at the place and time where shoppers make buying decisions. It should not – as is current practice – end there.
Now, I’d like to make what may seem perhaps a radical suggestion for beverage alcohol suppliers and distributors:
Think: Lead with POS Marketing – Everything Else Follows.
Unfortunately, POS is often referred to – by beverage alcohol marketers – as something they feel they must do because their competitors do it, rather than something they must do to gain a competitive advantage or to increase their top line. The reality is that POS marketing is actually the “X-factor” that converts a shopper into a buyer.
Over the last few years, “Lead with POS” or “POS First” actually has become the battle-cry for a growing number of at-retail marketing thought leaders, such as POPAI, the Path-to-Purchase Institute and Consumer Goods Technology (CGT), among numerous others. But, to be realistic, a POS first approach seems to have remained more in the realm of marketing theory than in actual marketing practice – despite the steady annual increases in spending on POS marketing materials and promotions.
Current research still demonstrates that beverage marketers continue to invest in POS marketing often as an afterthought. A necessary evil it is called by some, or as an add-on to more traditional media spending. For some reason, marketing executives and other practitioners apparently need more convincing to adequately fund and support the POS initiatives that actually help guide the shopper’s steps to the decision to purchase a specific brand or product.
Other than POS marketing, only word-of-mouth is even close in its ability to almost literally cause a shopper to make a buying decision. POS marketing, when done correctly, is always within sight at-retail – the place beverage shoppers go to research and decide to buy your product or someone else’s.
In support of this, a combined 2012 POPAI Study determined 76% of purchase decisions are made at-retail. Even those who discount this percentage agree that marketing at-retail is not something you want as an afterthought, rather POS marketing is something you need in order to win at retail (Note 1).
Grocery Manufacturer’s Association Study
The truth is that “POS first, traditional media last” should be the standard beverage alcohol supplier’s or distributor’s marketing approach. According to Grocery Manufacturer’s Association (GMA) Studies conducted by major accounting and consulting firms over the past few years, even most shoppers believe POS is one of the most important factors guiding their “conversion” from shopper to buyer. Indeed, some of our brand-name beverage alcohol distribution customers believe without POS marketing, their primary brand’s market-share would decline.
Our current viewpoint is that merely leading with POS may not be sufficient for on-going competitive advantage and retail sales success. We now believe that to be successful, beverage suppliers and distributors must think beyond POS first campaigns and start to think almost exclusively about POS marketing as a complete foundation for the next generation’s shopper journey.
Here’s what this means: Today, Shopper or POS marketing, regardless of the budget available to those who conceive and create the end product, is either left unmeasured or is measured as part of the overall marketing budget’s dollars for eyeballs metric touted by advertising agencies.
POS marketing is rarely held up to any scrutiny or accountability, and its ROI is rarely measured. In most beverage alcohol distributors there is rarely much evidence that POS marketing is a core business practice, despite the belief that if POS marketing were to cease, sales would suffer. There needs to be both recognition of and action taken to raise the level of importance of shopper marketing within the organization.
Often, the sign shop manager working for a beverage alcohol distributor is provided virtually no marketing education and often has the job because of a skill or interest level in a graphical production software package. As a result, POS marketing strategies for the most part don’t exist. What does exist is a very expensive production facility staffed by individuals who are either not at all focused or only focused at the periphery on the point-of-connection between the brand or product and the shopper.
Our suggestion: Empower (educate, train, involve in marketing management and sales) your POS marketing materials developers broadly in every aspect of the point-of-connection between your products and the “fourth-tier” – the shopper.
Your beverage alcohol POS marketing materials developers need to collaborate with marketing and sales management and with their company’s suppliers thus helping the sales organization with capturing marketing share and increasing the top-line. Clearly, just investing in POS promotional materials as a defense against your competition is not enough. Today POS or Shopper Marketing is a key driver converting shoppers into buyers.
Adopting POS marketing technology that tracks, measures and manages POS materials can be very beneficial, ensuring the move to POS first and enabling the adoption of Shopper Marketing as the foundation upon which you build all of your marketing initiatives (Note 2). Doing so, too, will create and maintain an advantage over your competitors who have not yet become aware of the benefits that accompany a POS first strategy.
We live in the shopper’s world, a POS world – we urge you to be guided accordingly.
To learn more about OnTrak’s products to help you measure the impact of your marketing investment, please click this button:
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Note 1: “The Shopper Marketing Revolution,” Toby Desforges, Mike Anthony, RTC Publishing, Copyright ©2013
Note 2: OnTrak offers point-of-sale (POS) marketing technology products that can be accessed if users have a connected PC, Apple or Android Internet browser, a user-id, password and a valid subscription. Our products help beverage alcohol distributors track, measure, manage and verify the ordering, fabrication, and placement of POS marketing materials – such as signs and displays. Additionally we collect large amounts of data that will permit our customers to correlate POS marketing initiatives (and costs) to product sales to help determine what POS is the most effective and yields the highest ROI. More information about our products is available right here on this very website.
If You Sell Beer, Wine and Spirits You Can’t Afford Not to Implement Point-of-Sale (POS) Marketing Technology
In The News
OnTrak Software is a Cincinnati, Ohio based company; so we’ll be using Ohio data to guide and support my remarks in this week’s blog.
According to www.cleveland.com - February, 2015:
“Sales of liquor set a record in the Buckeye State in 2014 as Ohioans continued a pattern of drinking higher-quality alcohol, according to the Ohio Department of Commerce. Buyers spent a record $949 million on spirituous liquor -- intoxicating liquor containing more than 21 percent alcohol by volume -- in retail purchases by consumers and wholesale purchases by businesses, such as restaurants and clubs. Total Ohio Liquor sales were $51M above sales for 2013, which also was a record year.”
The same website also reported in June, 2014:
“Ohio's grape and wine industry continues to grow and now has an economic impact on the state of nearly $800 million a year, a new report says. The report, prepared for the Ohio Grape Industries Committee, found there were 175 wineries in Ohio in 2012, an increase of 41 percent from 2008, when the previous study was released.”
To see the full report, Click Here >>
Also, according to the February 11, 2015 edition of CityBeat: Cincinnati’s News and Entertainment Weekly Newspaper, Cincinnati’s Winter BeerFest 2015, held at the Duke Energy Convention Center, will showcase almost 250 different beer related businesses – most of them breweries – featuring “1,000,000 ounces of craft beer!” The paper proudly identifies some 365+ craft beers, mostly from Ohio (and regionally) and also announces greater Cincinnati’s 8 newest nanobreweries.
“In Ohio, 163 breweries support almost 83,000 industry-related jobs, for a combined economic impact of $10 billion; and the number of breweries is growing. The state is among the top 10 in the country for both highest economic impact and most breweries.” – Dayton Business Journal, January 22, 2015.
Getting the Message to the Buyers
Clearly, if you’re a lover of beer, wine and spirits, Ohio is a great place to fall in love. But, besides these eye-opening statistics, I find it almost mind boggling to think how the suppliers and distributors ever expect to get their products known outside of the several “fests” (Cincinnati does have an annual wine festival as you probably imagined).
With a significant and growing number of small breweries and wineries, you just know there isn’t enough in the marketing kitty for any TV spots. So we know that these businesses will be turning to point-of-sale marketing in order to turn shoppers into buyers.
An Evaluation Process for POS Marketing Technology
It only seems logical that Point-of-Sale (POS) marketing planning and execution will be made easier and more efficient with POS marketing technology.
We’re biased, so before I suggest that we have the answers for you, let me first propose that you identify what your needs are related to a POS marketing initiatives.
Compile a list of your top 3 to 5 POS marketing challenges which will then allow you to create a list of “needs” you expect POS marketing technology to address.
With this list of needs in hand, ranked in order by highest benefit or value, your are now ready to begin your POS marketing technology shopping.
Efficiency and Effectiveness of POS Marketing
If you’re looking to improve your POS marketing’s efficiency, just remember it is important to first understand that you need to be effective in your utilization of POS marketing materials. If you are ineffective with your POS, any POS marketing technology will only allow you to more rapidly implement your ineffective POS campaigns.
Of course, it is also possible that you’ll use POS marketing technology to measure the effectiveness of your POS initiatives. Once you’ve become more effective, you’ll be able to focus more on improving the efficiency of your POS efforts.
In short, POS marketing technology that enables the tracking, measuring, managing and reporting on all or most aspects of your POS campaigns will help you get your shopper marketing materials to your retail customers without error and much quicker than you could prior to the adoption of such technology. And, if the technology helps with the measuring of the effectiveness of your POS, you’ll be in a much better competitive advantage position versus your competition.
As a beverage alcohol supplier or distributor, you should know that most of your peers are probably just as ineffective and inefficient as you are with respect to POS marketing. It has only just recently been acknowledged – see our previous blog – that at-retail or shopper marketing is just as important as other marketing initiatives. What these facts should signal to you is that now is the time of opportunity to gain competitive advantage – affordable competitive advantage.
Now is the Time for POS Marketing Technology
Beverage suppliers and distributors – specifically the leaders – who recognize the tremendous opportunity that now exists to adopt POS marketing technology, will ultimately be those who will gain the greatest success. If you haven’t yet considered adopting POS marketing technology, now is the time. The technology is the best it’s ever been, it’s affordable and, frankly, you can’t afford not to adopt it.
If you’d like to take a look at the state-of-the-art in POS marketing technology that will help you track, measure and manage your POS initiatives, we’d be happy to schedule a demonstration of one or all of our products. This could be your first “best idea” of the New Year.
It only takes an hour.
To learn more about our POS Marketing Technology you can schedule a demonstration by clicking this button.
In-Store Point of Sale (POS) Marketing Displays Help Score Actual Sales - Wall Street Journal
“A Super-Bowl Ad Is Just Half the Battle: In-Store Displays — the Bigger the Better — Help Marketers Score Actual Sales”
Posted January 30, 2015 by – Nathalie Tadena, WSJ, January 30, 2015 - Link to article below.
This Wall Street Journal article marks first time I’ve seen a reference to the “equality of importance” of point-of-sale (POS) marketing. The key word here is: Equality as in “as important as” something else. Quoting from the article:
“It is equally important, ad industry executives say, to make a splash at retail stores with elaborate displays that stand out to reinforce a brand’s message and — fingers crossed —actually lead to a purchase.”
OnTrak Software Perspective
Our opinions have come a long way from 2005 when we implemented our first SignTrak customer. As you may know our SignTrak product is an on-line application that allows beverage alcohol companies to track, measure and manage one of their largest expense category - In-store marketing materials.
Typically this is referred to simply as printed POS. (We also have a product to track Permanent POS - PermaTrak)
Back in 2005, we knew POS marketing was very important. We also knew it was a significant expense item for beverage alcohol companies. But based on the actual spending at the time, we knew that traditional marketing (broadcast and print) still commanded the lion’s share of marketing spending by the big beverage companies.
We also were as certain then – as we are now – that shoppers actually buy consumer packaged goods (dominated by beverages) almost exclusively in stores, not while watching TV ads, and not even while watching Super-Bowl ads.
Yet, we also knew that Big Beer was spending considerably lesser amounts on POS than on TV spots, other broadcast media and print.
Ten years have passed and what certainly appeared to us, at the time, to be obvious has indeed come to pass:
Ad Industry Executives are proclaiming it is equally important to market at-retail because that is where marketing can actually lead to a purchase.
We have always believed that POS and traditional media advertising are indeed equal.
But our experience says that more emphasis needs to be place on the side where most CPG purchase decisions are ultimately made – At the point of sale! – The actual place and at the point-in-time where shoppers actually can become buyers.
Who knows, maybe next it will be written that beverage marketers should adopt software tools to track, measure, manage, verify, correlate POS to sales, and recover the costs of POS initiatives with supply chain partners.
We just did.
Wall Street Journal Article
Please click on here on this Wall Street Journal - A Super-Bowl Ad Is Just Half the Battle link to read the entire article.
Take a look at our suite of Internet applications that were designed by our customers to track, measure, manage, verify, correlate and recover POS marketing expenses
For more information on our POS Tracking Software, please click this button:
Will 2015 Be the Year of POS Marketing Technology Adoption?
2015 Prediction Blog
If you’re a beverage alcohol supplier or distributor, there’s a good chance you subscribe to Beer Business Daily or Wine and Spirits Daily. These publications deal with a broad spectrum of subjects and often provide “inside baseball” type insights about overall market trends affecting the beverage alcohol market - And for suppliers and distributors information on mergers and acquisitions.
Since you almost certainly have access to any number of these types of publications, I’ll focus this “2015” blog on subject matter that is within our sweet spot here at OnTrak Software - At-retail Marketing Analysis and Technology. Point-of-sale (POS) marketing and promotional materials include such things as temporary and permanent signs and displays, and other POS-centric items such as food and beverage menus and product sampling.
I’ll also discuss the benefits of tracking, measuring and managing your POS’s performance and determining POS campaign’s ROI.
Putting Consumer Goods In Perspective
We’ve established in previous blogs the ever-growing reliance, spending on, and sales success that certain consumer packaged goods (CPGs) enjoy due to POS marketing initiatives. Let’s put “CPGs” into some perspective: As of 2013 the US-only beverage market had grown to over $1.4 trillion (see Note 1). It should come as no surprise, that out of all of the US’s $2+ trillion CPG market, the beverage industry relies most heavily on POS marketing to persuade retail shoppers to become buyers. It should not be surprising that billions of dollars annually are spent on the creation and placement of POS promotional materials in the beverage industry (overall, marketers spend about $60 billion a year in the U.S. alone on at-retail marketing initiatives).
What's Ahead in 2015?
With the above as a backdrop, here is our take on what 2015 has in store for CPGs – primarily the beverage alcohol industry – and Point-of-Sale Marketing Technology:
Software tools that can track, measure, manage and correlate the key data points of supplier’s POS initiatives to product sales will continue to grow in importance for POS marketing. Here’s why:
Shoppers will expect and seek advertising and promotional messages less and less from traditional media outlets and more and more at the point-of-purchase – that is, while they are shopping.
Shoppers will increase their reliance upon POS promotional materials to provide them with product information, pricing and persuasive content – especially for beverages, where the trend continues to be “sell less of more” (see Note 2).
For example, according to the NBWA, US consumers now have over 13,500 beers to choose from with more products added every year.
2. Accelerated Adoption
Because of the availability and affordability of such POS marketing tools and technology, we believe the beverage alcohol supply chain will step up their adoption of platforms that provide workflow management, including ordering, production and placement tracking. Additional capabilities will be increasingly required as suppliers demand greater accountability from distributors. Such things as:
Business intelligence tools to correlate sales to retail marketing campaigns and materials; or,
Reporting and analysis tools to take a look at you marketing campaigns, buy customer, supplier, brand, POS types, and many other data element, to determine if you are making good POS business decisions; plus,
Visual verification capabilities to demonstrate POS placement compliance.
3. It’s All About the Data
We believe that for [especially beverage] suppliers and distributors, capturing POS marketing data, measuring it and producing actionable outputs from it will become a bigger deal in 2015 than ever before. Beverage alcohol distributors in particular will adopt POS marketing initiatives data-capture and analytics to gain or retain competitive advantage.
An exciting opportunity exists for beverage alcohol distributors in that they will be able to provide their individual customers with information regarding the products marketed at retail via certain POS types. By correlating the sales trend data from their order entry software to their shopper marketing initiatives, distributors can inform their customers of hot selling products they may otherwise be unaware of. Distributors who correlate sales data to shopper marketing data can increase both their top line as well as their customers’.
This has the possibility to shift the distributor’s role from simply inventory replenishment or order taking to sales and account marketing management.
In addition, distributors can rapidly adjust their promotional materials which positively impact sales, and avoid the need for continuing to create costly campaigns that produce lower sales results. Why continue to produce campaigns that produce little or no results?
4. The Need for Speed
In sum, 2014 saw more beverage distributors adopt at-retail marketing tools and technology to track, measure and manage POS and achieve increased sales and a positive ROI.
In 2015, we think even more distributors will embrace these tools to gain or retain competitive advantage and manage the ever increasing expenses associated with their at-retail marketing, including their graphics design and printing requirements.
In 2015, we also expect a further shift away from traditional media marketing. We do expect marketing via social, local and mobile to play increasingly important roles for both beverage alcohol suppliers and distributors. It will be important to determine the effectiveness and efficiency of the convergence of social, local and mobile (SoLoMo) in creating additional demand. But for many CPG’s POS promotions will remain the go-to tool to actually increase sales.
For distributors that will adopt and manage POS Marketing Technology, 2015 will be a year of growth opportunities. For market leaders to remain in the lead, it is especially important to adopt not only POS marketing automation technologies but also tools that will enable performance measurement and focused responses to POS marketing analytics.
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Note 1: According to Forrester Group (@ www.forrester.com): Consumer packaged goods (CPGs) generate revenues over $2 trillion annually in the US alone; globally the revenue numbers are even more impressive. Coca-Cola by itself, for example, is said to have a $70 billion global brand.
Note 2: According to Chris Anderson, author of “The Long Tail”, Hyperion Publishing, 2006: “The theory of the Long Tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of ‘hits’ (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.” “The Long Tail book is about the big-picture consequence of this: how our economy and culture is shifting from mass markets to millions of niches.”
Deploying POS Marketing Programs Without Measuring Their Results, is Like Driving Without a Speedometer
I love to cook!
Over the recent holidays, I attempted to cook several dishes with which I had no previous cooking experience. Believe it or not, I had never cooked a bone-in rib-eye roast. “What could go wrong,” I thought to myself. Well, let me tell you this – I cooked my beautiful roast by time rather than temperature, and I seriously overcooked it. I didn’t even come close to my goal of creating a medium-done roast. Perhaps not a total disaster – after all, the veggies were pretty good – but very close to a total disaster.
What Happens When You Avoid Measuring
My problem? I didn’t bother to measure the temperature of the meat until it had been in the oven for nearly 90-minutes. And, despite cooking the roast for less time than my cook book recommended, I guess I should not have been surprised and disappointed at the outcome.
Of course, a search of the Internet offered virtually no sympathy. In fact, I was pretty much told I was a fool:
"The idea that you would rely on intuition to judge something you are terrible at judging makes very little sense. . . . Why don't you blindfold yourself too? “Cooking without a good digital thermometer and a good temperature guide is like driving without a speedometer.” – http://amazingribs.com
At the point of intersection, between my overdone feast and the Internet site’s lecturing me, my thoughts turned to the similarities between the prospective customers we at OnTrak are striving to win over and my shortcomings as a chef.
What occurred to me, staring at nearly four pounds of overcooked meat, was that virtually all beverages sold at-retail do receive at least some point-of-sale (POS) marketing materials. These materials are typically offered, created and placed at the retail location based on the “intuition” of the supplier’s or distributor’s representatives.
POS marketing initiatives, like my attempts to cook a roast, are frequently carried out like “cooking without a thermometer” or “driving without a speedometer.”
POS and the Beverage Industry
Here’s what appears to be happening with respect to POS marketing – specifically for beverages:
Suppliers and distributors are generally the most likely group to order and place POS marketing materials. At a minimum they budget certain amounts for at-retail marketing material spend. Distributors, with their own in-house graphics and printing capabilities, create local POS materials to coordinate with a brand’s national campaign images and content. However, little POS planning (beyond a budget per customer, rep or brand) actually takes place. Almost no research is carried out to determine what POS type and content has proven successful. And, there is no work done to see what is being done at-retail by competitors
What seems to be happening all too frequently in the retailer’s aisles is that POS materials (signs) are created, delivered and placed by distributor and supplier reps. Then they are generally ignored until new or replacement POS is “due” for whatever reason.
Today, based on our market observations, virtually none of the valuable POS and sales data collected by POS tracking systems is used to evaluate the effectiveness of the POS. There is little or no correlating of the cost of POS and resulting sales impact during the period of time the POS was on display.
POS Marketing Technology Systems
These types of systems are growing rapidly in popularity as evidenced by the number of new customers we add every year. But these systems seem to be used primarily to improve the accuracy of POS materials ordering and to shorten production time which leads to improved speed to market. These benefits are quite valuable, to be sure – and they do more than pay for the cost of the systems.
But the true power of today’s POS management systems comes from the data they collect and the reporting tools they provide.
In short, the value of OnTrak's POS Marketing Technology Systems is in the information they can provide.
POS Technology Systems can help answer questions like this:
If POS Marketing really is a key driver of sales – and requires tracking, measuring and managing to get the most from it – what can we/you do to deliver improved return on investment (ROI). That is, what can we to do with our POS marketing initiatives to win at retail?
Knowing what POS marketing initiatives work best, when they work well, and how they compare with different approaches can be the key to winning or failing at retail.
Just as my relying upon “intuition” and my lack of timely temperature measurement ruined my beef roast, beverage marketers will only gain a small benefit by automating the front-end POS ordering and processes. The real benefit will come through measurement and the subsequent management of the POS Marketing Process. It is critical that beverage marketers consider the strategic value of using POS data correlated with sales data to help improve the effectiveness of at-retail marketing and achieve greater sales increases.
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Adopting Point-of-Sale (POS) Marketing Technology – Taking the First Step
Recent Prospect to Customer Experience
In 2013 we conducted a product demonstration of our software to one of the largest beverage distributors in the United States. This distributor operates in several states and is predominately a beverage alcohol distributor with 30% of their business in non-alcohol beverages.
By third quarter 2014, we had finally sorted out what they wanted; how we would deliver it, and began the steps of moving them from prospect to customer. During that one year effort we convinced our prospect that we could bring solutions that would address several of their POS marketing issues. But we learned a lot in the process.
This distributor is a leader in adopting and embracing technology that will help them grow their marketing and sales capabilities and capacities. Additionally we learned that they use technology to gain a cost advantage. What they save by adopting technology can be invested in other marketing and sales initiatives. When they contemplate a new system, one of the key components examined during the selection process is the potential ROI.
Working with our customers is often like being taken to school on becoming more effective and more efficient. Not only to allow change, but actually to push an organization to change in ways that will “move the needle clockwise” and move the organization forward.
Our new customer has demonstrated the growing importance of POS marketing in the beverage industry. Likewise we’ve learned that “POS growth” has happened so quickly that it has become virtually unmanaged. Their concern is that if something isn’t done to get it under control, it may become practically unmanageable. We’ve heard this “trend” expressed with greater frequency and urgency these past few years especially by distributors with over $100M in sales and now with increasing volume from even smaller distributors.
The Importance of Tracking POS
Simply put tracking, measuring, managing and determining the ROI of at-retail marketing initiatives – custom/temporary printed signage, and inventoried permanent POS items – has become a priority for beverage manufacturers and distributors. Of course, retailers want the most effective POS programs put in place, but are somewhat less focused on the ROI of POS programs since the marketing materials typically come to them at no or virtually no cost.
It is true that more and more beverage companies are investing or planning to invest significantly in at-retail marketing and promotions. Research firms like POPAI, Path to Purchase, and Consumer Goods Technology, who study the deployment of shopper marketing initiatives, believe at-retail marketing point-of-purchase initiatives are steadily increasing and are likely to increase sharply in the next year or two and beyond. At the same time, studies have shown less than 50% of companies track POS placement or measure POS marketing’s ROI.
With nearly three-quarters of beverage suppliers stating their belief that the primary objective of POS marketing is to increase sales first and strengthen brand recognition second, it’s no wonder traditional media outlets essentially ignore such objectives and continue to insist on the importance of the “number of eyeballs” that were exposed to the brand’s message rather than any direct correlation to sales. Of course, an increase in sales is exactly the “sweet spot” POS promotions occupy.
In support of the notion that POS’s sweet spot is the increase in sales, let’s examine something we learned from reports coming out of the recent Beer Insights Seminar (BIS) held at the Waldorf Astoria in New York.
According to those in attendance at the BIS, a prominent Beer Industry consultant, Joe Thompson, remarking on the waning effectiveness of traditional media marketing said:
“The next step: Influencing the consumer at the store level. I think that's the key to the distribution system moving forward." Continuing, Thompson said: "[We need] More and more local [marketing] . . . TV has less influence, and the wholesaler is in a position to do a bang-up job of marketing to consumers in their market [at retail].”
Source: November 12, 2014 “The Tech Effect,” Beer Business Daily - https://beernet.com
Conclusions and Recommendations
Until we have an ‘app’ that actually pours beer, or other beverage, from a smartphone in real time, influencing the consumer at the store level is a great use of funds. TV advertising of items that an "unplanned purchase" component, is a waste of billions of dollars of potential influence. With increasingly fewer and fewer audience members actually watching TV advertisements, it merits mentioning that none of them have the ability to instantly buy a 12-pack of beer or cola while sitting in front of their TV's watching a “TIVO’d” program.
If you really want someone to see and be influenced (to buy) by an ad about your product, TV advertising is becoming more of a risk than ever before. Almost half the population simply doesn't watch TV commercials; and, the rest hop on their smartphones to catch up with the burning issues that have come up in the last 5 minute aired commercial package.
If your goal is to increase sales then POS marketing is the answer – particularly if you’re a beverage distributor. In fact, POS marketing may be the key component of your marketing approach.
To get the most out of your POS marketing, it is now important for you to invest in tools to aid in tracking, verifying, measuring and managing your POS initiatives. Doing so will foster competitive advantage. Although it is likely the larger enterprises will lead the charge, smaller companies will only be able to survive, grow and prosper by making similar, proportionate investments. And it is not too early for any size enterprise to begin thinking about making such investments today.
However, these investments, by themselves, will not provide significant ROI without top management’s investment in the processes and discipline required to integrate POS marketing into the overall enterprise.
POS marketing technology software provides the tools to build a measurable POS marketing function within your organization.
Beverage suppliers and distributors should put POS Marketing Technology on the fast-track; and, they should also develop their people to be the most competent ruthless POS marketers possible.
POPAI - http://www.popai.com/
P2P - http://www.p2pi.org/
CGT - http://consumergoods.edgl.com/
Beer Business Daily - https://beernet.com/
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POS Marketing Technology – How to Drive Down Your Point-of-Sale (POS) Costs and Beat Your Competitors
I was standing in the TSA queue at O’Hare airport within the last couple of weeks and way up high on the terminal wall I could see a prominent 20’ x 12’ sign with the message:
WORKERS LOSE UP TO 70 HOURS A YEAR
WAITING TO BOOT AND LOAD APPLICATIONS.
Seeing this message, reminded me:
For nearly 9 years, those of us at OnTrak Software have been amazed at how many minutes per day sales and marketing people spend in configuring, ordering and following up on their POS signage and other marketing materials.
The Real Cost of POS Placing and Tracking POS
Based on information our customers provide us, sales and marketing people “lose” a minimum of 44 hours per year, per person placing and tracking POS material orders from their customers to their internal printing facilities. This is because most beverage alcohol distributors use a manual system to order and track POS, and not a suite of POS marketing technology like OnTrak.
Additional time is lost in rework and replacement, to say nothing of the cost to the retailer in lost incremental sales while incorrect POS materials are removed, reworked, redelivered and replaced. When POS materials have to be reworked often several prime selling days are lost. Products are on the retailer’s shelf without the benefit of being marketed at-retail via the promotional materials that typically provide the last “persuasive push” to turn shoppers to buyers.
Quantifying the Components of POS Costs
Salary – With a conservative average cost of $36/hour, the lost time spent inefficiently ordering POS alone amounts to nearly $1,600 per rep, per year. For a supplier or distributor with 200 reps, the “lost time” amounts to nearly $320,000.
Errors and Reworks – For that same supplier or distributor with 200 reps, if each rep makes one ordering error per month, the rework costs add up to an additional $450,000. Based on a rework time of 1.5 hours per rework (according to our customers), the number of hours lost just to get the right POS to the customer swells to about 62 hours per rep, per year. That’s up 18 hours per year, per rep from the 44 hours mentioned earlier.
Additional Time – Production time can also be lost in locating and loading the raw graphics files that match the supplier’s graphic templates. On average, it requires about 15-20 seconds to locate the raw graphic files based on templates referenced in POS production orders. If 30,000 signs using graphics are created annually, and the time spent in locating the raw graphics for these signs is cut from 20 seconds to 10 seconds each, the savings is 300,000 seconds or over 83 hours per year. Some of OnTrak’s customers produce nearly 10 times as many signs as our example – about 300,000 signs per year. To say the time (and therefore cost) savings are impressive is probably an understatement.
Using POS Marketing Technology to Achieve Significant Savings
These areas of improvements in time, materials and costs amount to substantial, attention getting savings. All this is possible with the deployment of an automated POS promotional materials tracking system. When your reps are freed up of this time spent on ordering, tracking and reworking POS, they can spend more time selling, and generating incremental sales.
For many beverage distributors, hourly sales in the thousands to tens of thousands of dollars are the norm and easily determined with even basic sales analysis tools.
Using our example 200 sales rep beverage supply company, and our expectations of up to 62 hours per rep, per year able to be “reclaimed”, it is simple multiplication to see the potential top-line impact of an additional 62 hours per year spent in selling by each and every one of the reps.
If a typical rep sells an average of $2,000 per hour in product, and is able to work selling products 62 hours more per year, the potential annual incremental revenue per rep would be $124,000. In our example of 200 reps that would be a potential reclaimed top line revenue of more than $24.8 million.
Apply your numbers to this example and you can quickly calculate the significant saving from investing in a POS Tracking software solution. Even if you would expect less than 100% of the hours saved to be spen in making additional sales, the potential incremental revenue you could gain is impressive.
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