The Point-of-Sale Marketing Mandate

As the U.S. economy continues to improve, beverage alcohol sales — specifically wine and spirits sales — have also improved.

Today, the way these products are distributed and retailed is undergoing remarkable change.

Beverage Distribution Changes

One very significant change is for some states to switch from a state ‘control’ distribution and retail model to a privatized distribution and retailing model. Credit (or blame) Costco if you like; or, simply attribute this emerging trend for states to consider privatization as another way states look to increase their flagging revenues.

Although there are now fewer than 18 control — sometimes called monopoly — states, the apparent move to privatization seems to show no signs of lessening. At the same time, several non-control state alcohol licensing laws are moving in the direction that will increase the number of licenses available for retailers to acquire. 

In short, we’re at a time and place of big changes for beverage alcohol suppliers, distributors and retailers. Overall, the supply chain representing the broad beer, wine and spirits industry is once again in growth mode. 

Distributor Consolidation Effect

Of course there’s relevance here to the increasing importance of beverage alcohol’s middle-tier marketing efforts. Here’s why:

In 2008 — arguably during the worst part of the Great Recession — beverage alcohol distributors were rapidly moving to consolidation mode - retailers also.  And this consolidation trend continues today. In fact, every day more consumers are shopping in bigger stores, national chain stores, and regional convenience stores. Even strictly local stores have grown in size, or been put out of business.

That same year, industry observers noted that every week 140 million Americans shop at Wal-Mart, and generally speaking that number continues to grow, today. Compare that weekly number to the one-time-per-year viewership of the Super Bowl (80 million); or the weekly audience of the most popular network shows (20 or 25 million).

POS vs. Traditional Marketing

It’s clear to see why recently POPAI declared at-retail or point-of-sale (POS) marketing to be on-par with other ‘traditional’ measured marketing approaches. The weekly ‘audience size’ of Wal-Mart is typically 3 to 5 times larger than the audiences for American Idol and Dancing with the Stars, combined!  

TV networks continue to suffer declining audience share, making a compelling case for the shift of marketing spending from traditional media to the point-of-purchase (POP).

Given the amount of published research pertaining to the effectiveness of point-of-purchase marketing, it’s no wonder that POP marketing has now grown to over $21B in the U.S. — and it even grew at about 7% per year during the recent economic downturn.

POS Tracking and Management Tools

Considering the rapid shift from traditional mass media marketing to POS/POP marketing — especially for beverages — it is not surprising that suppliers, distributors and retailers alike have begun to recognize the lack of tools (especially automated software solutions) to support the ordering, placement, verification and reporting required to track, measure and manage the tactics, compliance and ROI of these at-retail marketing initiatives. 

If you are a new reader of this blog, you need to know that these types of tools are available — and OnTrak provides them. These POS tracking, measurement and management tools were designed by our customers to help suppliers, distributors and retailers initiate and evaluate the impact and ROI of their POP marketing programs, and also recover 100% of available marketing co-op allowances.

To learn more about our POS Marketing solutions, click this button: