Point-of-Sale Marketing Technology: Still Viable for CPGs?

According to eMarketer, the Internet hasn’t demonstrated itself to be a strong place to drive sales and build brands for many, if not most, consumer package goods (CPG) companies.

For one thing, it’s harder for CPG suppliers to see the ROI of e-campaigns, and as a result, significant numbers of CPG marketers continue to rely on proven methods, such as POS initiatives - Initiatives that actually drive direct sales. CPGs spend over “67% of their all-inclusive marketing dollars on retailer trade promotion,” including POS signs and displays.

eMarketer continues by noting that those marketers who focus on at-retail marketing, mostly skip e-marketing (aka digital), and spend less than 1% of their budget on digital.

According to a McKinsey & Company study (see Note 1):

“One global consumer products company, for example, had for years relied heavily on traditional marketing, such as television and print ads. Concerned about the growth of new media [digital], the company decided to research just what was influencing the choices of consumers–and found that only 30 percent of them cited traditional advertising. In fact, in-store interactions [POS marketing] with consumers were more important in communicating the company’s message and driving potential buyers to consider its products.”

Before continuing, I want to assure you this is not an anti-digital post; indeed, it’s not anti-anything.

The message is, however, both pro-POS marketing and pro-POS activities, including the tracking, measuring and managing of these initiatives. These activities, if adopted as part of your overall at-retail marketing plan, can provide valuable information about what POS initiatives, promotions, programs and spending-levels drive sales — in short, if you track, measure and manage your retail marketing, you’ll know what works and what doesn’t.

If you’re like most CPG marketers, you are frustrated by the lack of (software) tools. Tools to provide you with the all-important data-points, including integrated reporting and analysis tools to enable you to deploy the POS materials that best drive your desired sales improvement.

Yet, despite the frustration, we’ve learned from Consumer Goods Technology (CGT) that most CPG suppliers plan to not only continue their funding of POS initiatives, but also have plans to increase POS marketing spend.

CPG suppliers continue to increase their investments in POS marketing because it works — but according to CGT, what is needed to get the maximum out of POS investments are the analytical tools to help predict what at-retail marketing initiatives are most likely to result in the maximum sales improvement.

Collecting and effectively analyzing POS tracking and measurement data does require supplier, distributor and retailer discipline, as well as the regular review of the resulting information. But, there is a payoff: The resulting insights enable the deployment of the most persuasive POS campaigns which naturally drive incremental revenues, margins and profits.

Some POS marketing management software offers CPG suppliers, distributors and retailers a set of tools that simplify the tracking and measuring of the effectiveness of POS initiatives, and provide the data needed to predict what POS campaigns and materials are most likely to increase sales. With such capabilities available to users of POS marketing management software, it should be clear that adopting these tools will provide CPG marketers with a competitive advantage enabling them to gain or retain market share.

The POS marketing environment, in lock-step with the overall marketing environment, is constantly changing and often seems to be as difficult to master as jumping onto a fast-moving train. Indeed, it is almost impossible to accurately describe the speed of change and the increasing need to track and measure the impact (including the ROI) of POS marketing initiatives.

Despite the difficulties of determining the value of your POS marketing (without purpose-built software tools), we find that CPG suppliers, distributors and retailers who do track and measure the outcomes and ROI of their POS efforts, are those who are most likely to triumph over the competition — thus assuring both sales sustainability and gaining growth.

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Note 1: Measuring marketing’s worth, McKinsey Quarterly (on-line), May 2012, by David Court, Jonathan Gordon, and Jesko Perrey, www.mckinsey.com/insights/marketing_sales/measuring_marketings_worth