One Blog |November 21, 2016 | POS Marketing Software
The New Power of Point-of-Sale (POS) Marketing
At-Retail Marketing Company Changes Its Name - POPAI is now Shop!
Based on our informal survey of beverage alcohol distributors, it is unlikely that many beer, wine and spirits wholesale distributors belong to an organization called “SHOP! – Enhancing Retail Environments and Experiences”
Formerly known as POPAI (Point-of-Purchase Advertising International), SHOP! introduces themselves, on their website this way:
“Shop! is the new name for A.R.E. | POPAI The New Association.” (http://www.shopassociation.org/) I’m assuming A.R.E stands for Association for Retail Environments.
Beverage Alcohol Distributors
Unfortunately, I have been unable to verify if Anheuser-Busch and MillerCoors, or any other beverage alcohol supplier, belongs to SHOP!. However, many such suppliers were prominent members of POPAI, so let's assume that they would continue to be active members in the new organization, too.
The point is, suppliers – including multi-billion dollar breweries, – belong to such “Marketing at-Retail” organizations to collaborate with consumer packaged goods companies of all types, in order to improve the impact of their distributors point-of-sale (POS) marketing campaigns.
It is OnTrak’s contention that it has become especially important for POS to be a “measured medium” by the distributors themselves. It is no longer sufficient for supplier studies alone to be relied upon to be a tool to help distributors increase sales.
Tracking Your Marketing at the Point of Sale
Our long-term customers set out to acquire software that would help them track their POS. They understood the need to have an on-line POS ordering system that provided many of the same features as the order entry functions of their route accounting systems (RAS).
In the early years, 2005 – 2009, a POS tracking system provided two important benefits:
- The virtual elimination of reworks; and,
- Getting the distributors POS (typically printed signs) to the trade a day or two ahead of the competition.
Eliminating reworks reduces costs by $25 – $50 per error.
In the ‘old days’, sign orders were written on bar napkins, and were difficult to read.
Today, ordering signs in real-time allows sign production in the distributor’s sign shop to occur on the same day the signs are ordered. This gets the signs to the retail location much quicker than those distributors who don’t use a POS tracking system.
For those distributors who do use on-line POS ordering software, the fact the POS orders are now digital also allows distributors to produce reports showing how much is being spent per month, quarter or trimester. Beyond the initial ordering functions, POS tracking tools provide “business intelligence” functions which give distributors ad hoc query and detailed reporting capabilities.
Changing Relationship Between Suppliers and Distributors
Since 2009, the major suppliers have been progressively “eroding” the financial support that had been “relied upon” by distributors. It is estimated that distributors spend an average of $500,000 per year to produce and place custom, temporary POS.
Prior to the Great Recession, distributors were often provided with allowances that in many cases amounted to 50% or more of their spending on POS. These bill-backs or marketing allowances, when paid, would translate into a direct bottom-line increase.
But as you know this relationship between supplier and distributors is changing. If your supplier's intention is to further “Push POS costs to distributors,” you are, most likely, wondering “What are we getting for our increased spending?" Like so many of OnTrak’s customers, you’ve already noticed that as a result of these changes you are spending more on POS execution year after year.
Analyzing Point-of-Sale (POS) Marketing
Studies from organizations like POPAI (now SHOP!) set out to determine the real impact of POS to increase the sales of beer, wine and spirits.
The conclusion of these studies is that POS – alone – could be the primary driver of increased sales.
In most of the studies, the sales of several consumer packaged goods, were compared with sales from the same period, last year. In several studies, sales increases ranging from 10% – 15% were recorded. These studies required that “last year’s” items did not have the benefit of signage (POS), but did, “this year.”
At this point, regardless of your reaction to the findings of POS effectiveness studies, you are probably feeling it would be difficult for you to undertake such a study. After all, those of us who either market POS tracking software or who are beverage alcohol distributors, probably already have bought into the notion that POS is an effective tool for selling and increasing the sales of beer, wine and spirits at-retail.
This leaves us with some of the reasons that adopting POS “Tracking, Measuring and Management” software now is so important.
Managing POS Expectations – Going up!
The most thorough studies undertaken during the past few years of the impact of POS at-retail are from SHOP!.
The studies include: “Point of Purchase Advertising Institutes’ P-O-P Measures Up: Learning from the Supermarket Class of Trade;” and “In Store Advertising Becomes a Measured Medium: The Convenience Channel Study.”
These studies concluded that POS only delivers measurable sales increases 50% of the time, yet, when sales are increased, the averages are: 12% in the supermarket channel and 20% in “C” stores.
Unless your sign-shop not only tracks, but measures the impact of your POS initiatives, it is certainly likely that only 50% of your at-retail promotions are having an impact on sales.
Without a POS Digital Tracking Tool that:
- Tracks or automates both POS ordering and production work-flow
- Measures or provides comprehensive data to allow for the correlation of POS with sales and
- Manages or offers integrated reporting tools to let you know “what happened?",
…. you are ill-equipped to find the 50% of your POS that works – and keep using it. On the other hand, you will most certainly note the difficulty in finding the 50% of your POS that doesn’t work – and then change it.
OnTrak’s tools typically pay for themselves at least two-times over in their ability to virtually eliminate sign and menu reworks. But even more, they really help you identify what works best to boost sales.