Point-of-Sale 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.

Industry Research

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.

POPAI Survey

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.

OnTrak’s Perspective

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.

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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.