One Blog |December 19, 2018 | Custom POS Software
Beverage-alcohol Distributors’ Challenge for 2019: Develop a “POS Plan” to Reduce POS Waste and Improve ROI
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In this blog post, I’d like to talk about both the effectiveness and efficiency of your POS promotional initiatives. Of course, efficient fulfillment of your in-store point-of-sale (POS) programs is critical to your marketing campaign’s success – and the use of a POS tracking, measurement, and management tool to assist with your ordering and placement has become necessary, perhaps critical, in order to control costs and speed your POS to the trade. However, assuring that the right POS materials are delivered to your retail customer’s location in a timely manner (i.e., before your competition) can also be a real challenge for many beer, wine, and spirits wholesale distributors today. It’s one thing to get POS delivered as quickly and as inexpensively as possible (efficiency), but it is also important to get the right materials in the trade (effectivity.)
Although OnTrak’s solutions have been focused primarily on efficiency – as dictated by our customers – we’ve also worked with distributors of all sizes in 34 states, and we’ve seen what works (and sometimes what doesn’t.) I won’t stray too far from our key competency – helping distributors manage the costs of their POS programs – but I will pass along some of the challenges and solutions our customers have exposed us to for over twelve years.
Planning and Plans
Before placing your POS orders for your customers, it’s important to have a “POS Plan” which for beverage-alcohol (BA) distributors is, essentially, the marketing strategy. Custom POS materials created by BA distributors generally offer a higher ROI than generic signage and will make your brands stand out as shoppers enter the aisle. And, eye-catching POS often translates to a shopper becoming a buyer.
If you’re a typical BA distributor, you may create new in-store POS once or twice (or even four times) each month since each of your retail customers needs promotional collateral to reinforce your brands, point out a sale price or describe the benefits of consuming the product – of course, each message is designed to help drive sales.
When working with your customer during your weekly sales visit you have an opportunity to differentiate yourself from the competition. It is, of course, possible to simply suggest some new signs to your customer to advertise a sale price or to introduce a new product – and it is certainly possible to make ad hoc suggestions or offers regarding the “free signage” your distributor’s sign shop or marketing department can create. However, if you plan your POS strategy before you meet with your customer, you will almost certainly have created a competitive advantage for yourself. Purposeful, goal-oriented POS initiatives prepared in advance will put you well ahead of your competition as the competition will most certainly be almost entirely focused on taking the week’s order for product rather than working with the customer to actually add value by proposing an at-retail marketing plan designed to increase sales.
It’s All About ROI (and reducing waste)
The strongest argument for creating a POS plan for your customers is that each retail store is different; some of them might only really need one sign, one message, while other stores may need a more elaborate POS marketing program this week since they carry more of your brands and products. We regularly hear that some distributor’s sales reps look at POS almost as an afterthought and as result either the wrong materials are created or they aren’t placed properly within the store or both.
Studies have shown that up to 50% of temporary POS materials (e.g., signs and displays) are thrown out – i.e., wasted. And, as POS costs have risen to be most BA distributors second largest expense, behind payroll, cutting waste means growing the bottom line. You see, year after year, POS costs increase substantially through reworks and waste, to say nothing of the amount of time distributors have to spend in pulling together spreadsheets and creating reports in order to claim their suppliers’ available co-op monies.
Certainly, there’s a better way, you would think.
Think about this: If you take the time to plan and to review what POS materials have been the most effective (and efficient) you could come very close to determining the actual needs (what POS would be effective and how much) of each of your customers. Then you could order exactly the POS that is most likely to increase sales. Soon thereafter, that alone would reduce or eliminate “dumpster POS” – i.e., you would virtually eliminate waste.
This undertaking (although beneficial) without a POS tracking, measuring, and managing system is time and almost certainly cost prohibitive; you’d have to research what POS has been placed previously and you’d have to compare content and placement to sales to determine the most effective POS – manually. Although doing these things could be very helpful, the additional complexity would simply suck up too much time. You wouldn’t really have any ROI – all you’d have is “I” as in an excessive investment in time.
Get Help From Technology
Adopting an online POS fulfillment platform will enable you to easily capture data and get information regarding each of your customers. You’ll be able to see what POS materials you’ve used before and which ones have been the most successful. You’ll be able to plan – in advance – your POS strategy and you’ll be able to show your customers what has been the most successful historically in order to get their buy-in of your POS plan. Indeed, once you show your customers what POS promotions have been the most successful, they will be more likely to rely on your input for help with their in-aisle strategy.
Of course, I’d be remiss if I didn’t mention that OnTrak Software offers several solutions to improve the ROI of your POS investments both by decreasing waste and by increasing sales. Our core competency is POS tracking, measuring, and management, one of yours is (or should be) creating POS marketing plans that will benefit both your customers and the distributor you work for.
OnTrak has helped beer, wine and spirits distributors of all sizes (including three of the top-ten wine and spirits wholesalers and 6 of the top-twenty-five beer distributors). Over 100 distributors use OnTrak’s applications to address their marketing challenges and most of them have improved their POS ROI by becoming more efficient with their POS fulfillment needs.