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:

1. 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.”