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! 

The 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).