One Blog |August 29, 2018 | Point-of-Sale Marketing Management

Beverage Alcohol Point-of-Sale POS Marketing: Now a Measured Medium

Mark Fullerton

For at least the last ten-years, we’ve said our products allow beverage-alcohol distributors to “track, measure, and manage” point-of-sale (POS) marketing campaigns.

We actually came to the notion that our software could “measure” the impact of POS when a few of our earliest customers signed up for subscriptions to our premier product, SignTrak.

After some experience with our software, they told us their use of our product had enabled them to know what and when POS promotions were most effective in increasing market share (increased sales). Additionally, we learned — from our customers — they had used our products to determine what size and quantity of POS signs were most effective and efficient in increasing sales of promoted products.

One of our customers told us that:

“With SignTrak we have been able to prove that when it comes to POS that ‘Bigger is better and less is more."

Our customer said they had learned that instead of many small and medium-sized signs at-retail, they learned that fewer and larger signs had a more powerful influence on sales. They could measure the impact of POS thanks to marrying POS data elements to the corresponding data elements captured and stored in their order entry systems.

I’ll get back to this line of thinking in a minute.

What’s Better: Information Richness or Reach? The Answer is Both

We’ve mentioned, in previous blogs, the two key measurement characteristics advertisers look for when they select the media they choose to advertise their products: “Reach and Richness.”

Broadcast and Print Media Advertising

When it gets down to measurement, TV (broadcast and cable alike) and print (newspapers, magazines, etc.) provides pretty reliable reach data for advertisers looking for “the biggest bang for their buck.”

Additionally, these media (TV and print) also have a modest amount of demographic information that they willingly share with potential advertising clients.

It is demographic data that largely accounts for the absence of beer advertising on the Hallmark Channel. Very little is actually measured with respect to what is typically called broadcast and print advertising other than the probable and possible size of the audience — reach.

Rich data, on the other hand, is made up of content that is customized, comprehensive, current, and local (focused).

If you think of reach and richness in the following way, you’ll have a very good understanding of the concepts:

A new car TV ad shown during the super-bowl guarantees very high reach while speaking one-on-one with your local car dealership salesperson about that new car assures very high richness. Of course, rich advertising typically is the cost prohibitive approach.

Generally, it is thought that there is a trade-off between richness and reach. That is, for a certain dollar amount it is possible to reach millions or provide a few with a rich, comprehensive message.

Internet Advertising

It is true that the Internet has blown-up the trade-off to a certain extent, but typically unless your products are being sold almost exclusively on-line, the problem with advertising on the Internet is that a product advertisement seen on the Internet may not translate into sales because often potential customers are not at the place and time when they are shopping or are unable to make the conversion from shopper to buyer while browsing the web.

Only POS Marketing Can Provide Reach and Richness Most Effectively

For beverage-alcohol — and a few other products — only point-of-sales (POS) Marketing offers advertisers local and regional reach, richness, and is able to be interacted with at both the time and place a shopper is looking to become a buyer.

One of the reasons for this is that beverage-alcohol products are generally unavailable to be purchased over the Internet and when they are available are typically more expensive due to delivery charges and “controlled substance” inhibitors that are generally still in wide-spread existence.

Measuring the Impact of POS

Now, back to measuring the impact of POS — for beer, wine, and spirits wholesale distributors.

First, we have found that POS promotions are often a distributor’s number two expense after payroll. So it's a worthy area to focus on.

The three-tier system assures that local at-retail advertising for wholesaler products is the purview of the distributor, even if the suppliers reimburse the distributor for all or part of the at-retail promotional expenses.

And, only POS — when married to actual sales data — can be used to create a correlation of POS promotions to increases (or decreases) in sales.

Introducing: “Diving” Into Your POS Data

Beverage-alcohol POS Marketing Now a Measured Medium Which leads me to share information with you about an exciting study that we’ve just started this month with one of our customers — who is using business intelligence as a competitive tool and has requested anonymity.

Our customer is working with our developers and Dimensional Insight (www.dimins.com) to “marry” our customer’s SignTrak POS data to the distributor’s corresponding sales to actually find out what happens with respect to sales when certain POS campaigns are executed.

The reporting tool we will be using is “Diver” - A data analytics reporting platform from Dimensional Insight.

The only caveat is that to actually make this correlation have its greatest value and prove the competitive advantage this business intelligence will demonstrate is that some patience will be required. The primary reason for the requirement of patience is the issue of seasonality.

As you know, beer sales are not flat throughout the year. The run-up to several “holidays” (that we lovingly call beer emergencies) can distort the findings. For, if we were to look at beer sales immediately following, for example, the Fourth-of-July, they may very well drop regardless of the amount, placement, and size of POS (to say nothing of the amount spent on it).

Conversely, even poor POS utilization during the run-up to the Fourth of July could be associated with a sales increase.

Conclusion

Consider this blog then as the introduction to a multi-part report designed to actually measure the impact not only on POS costs but also a study of the effectiveness of POS in providing beverage-alcohol distributors with the tools to improve their deployment of POS promotions.

OnTrak continues to invest in its POS Marketing Management solutions as well as relationships with other technology companies in the beverage alcohol distribution industry.

Our solutions continue to evolve from simple POS ordering and production products to full-function systems that provide business intelligence, data analysis, executive dashboarding, and "POS cost to sales correlations".