One Blog |March 3, 2017 | Point-of-Sale Marketing
Why Point-of-Sale (POS) Marketing is Increasingly Important to Beverage Alcohol
Mark Fullerton and Denis Clark
Taming Impulsive Shoppers
Most of us believe that shoppers are becoming more impulsive as every day passes.
The more “graceful” way of putting this may be to say that shoppers are making more and more “unplanned purchases.”
This growing impulse buying behavior means that there are more and more buying decisions being made at the point of sale. When shoppers are at the place and time that they can see a product, buy it, and even consume it, they’re happy.
Most shoppers who actually make unplanned purchases are, according to several studies, nudged to do so by persuasive point-of-sale (POS) marketing materials. When these eye-catching materials are properly placed, often with attractive pricing, there is no doubt that even these impulsive shoppers can be convinced to purchase your brands.
The reasons for this impulsive behavior are many. I’m not here to describe or debate the reasons, but only to recognize such behavior exists, and help you take advantage of the opportunity presented by these shopper behaviors.
The Importance of POS Marketing To Beverage Alcohol
In the case of alcoholic beverages, placement can take a back seat to the message conveyed by POS. For example, a message that can simply announce that a certain brand of beer or wine, normally priced at $19.95 is on sale at $15.95.
Of course, if the POS also notes that the beer or wine has received a special award, this will often move the needle closer to “buy.”
Today, the typical supermarket can carry thousands of unique beer and wine SKU’s. In such an environment, your distributor’s Lager or Chianti brand needs to stand out on a crowded shelf by being represented with great looking POS — and a strong “buy” message.
Local vs. National Marketing
A key reason for the use of powerful POS, and its growing importance for alcoholic beverages, is the need to “localize” your message. National TV spots are, well, “national”. They don’t and can’t really carry a strong “buy” message for the entire diverse, national market.
But POS can do just that!
Shopping at-retail is intimate and local. The message that persuades in Boston possibly dissuades in Biloxi. In other words, as local geographic “markets” become more and more important to beverage alcohol suppliers and distributors, who create and place virtually all POS, they must adjust the national marketing message to suit the local and regional markets they serve.
But There Is More To This Story
Even the preceding local vs. national discussion doesn’t fully explain the continued increase in the importance of POS for beverage alcohol.
First, beverage alcohol is seasonal:
- Beer, although certainly consumed year-round, has seasons — summer and football.
- Wine and Spirits, also consumed year-round, certainly have a season: “OND&J” (October through January).
As the warm season wanes, POS can keep beer sales moving with fall and winter promotions and some discounts. For example, Stella Artois over the past several years has managed to craft a Christmas message that compliments and builds upon their rest of the year aspirational message. And, Wine and Spirit POS summer promotions can keep corks a-poppin’ and cocktails a-makin’ despite the lack of a chill in the air.
Next, it has become increasingly difficult for traditional media to do little more than sustain product and brand families’ “mind-share.”
And finally, it seems clear that POS is necessary to drive convert these impulsive buyers into actual shoppers.
Although every marketing channel certainly has value, it is shown by industry research that lifestyle and “speed of living” changes have elevated unplanned shopping trips and purchases to all-time highs.
That, coupled with beverage alcohol brand explosion, has made POS the most effective and efficient method to introduce new brands and products to the market and increase the sales of existing products.
While you may not totally agree with what we are concluding in the last paragraphs, our perspective comes from 10 years of working with hundreds of beverage alcohol distributors across the country. In addition, we spend every working day developing software solutions which address issues in this key operational area.
Is POS Marketing Really Important?
Would you be willing to agree that POS Marketing is actually the primary, if only, way to convert an impulsive shopper into a buyer?
If Your Answer Is Yes,
then the next step is to leverage your investments in POS. But in order to maximize the impact of your POS campaigns and increase sales, you need to know a few things:
- Do you know exactly what your POS Marketing campaigns cost?
- What sales increase did you get from your investment in POS Marketing?
- Have you identified and claimed all the supplier bill-backs or recovery dollars to offset you costs?
- And finally are you making good POS Marketing decisions?
I could go on and on, but I won’t.
If Your Answer Is No,
then suffice it to say that our customers would tell you they can not only answer these questions accurately, but more importantly answer them instantly.
In our 10 years of providing solutions to help distributors answer these questions, I can’t recall a single distributor who would argue against the effectiveness of POS in selling more of the products they distribute to the geographic retail market they serve.
It would also be virtually impossible to find a beverage alcohol distributor — other than OnTrak users — who doesn’t also feel their POS in-house production facilities are somewhat like a financial “black hole.” — An endless place to put more and more money, with no end in sight. But more importantly no real knowledge of what they are getting in return for this large investment.
Many distributors tell us that they have no way to determine how much POS they produce or purchase, how much POS they deploy by customer or by brand, and what actually happens as a result of a particular POS “event”.
And finally distributors tell us is they have no way to track or measure their POS activities, results and spending — and therefore no way to control and manage it.
If Yes or No, What Are We Saying?
Regardless of your answer, the path is the same. If you are a beverage alcohol supplier or wholesaler and want to create effective, efficient and manageable POS markeing campaigns, you must track and measure the ordering, production, procurement and placement of the materials and promotions you deploy.
We know that your primary mission is to generate revenue and profits. You accomplish that by doing what you do every day, and what you have been doing for years — Sales, marketing, distribution, logistics, etc. And you’re good at this.
What we are saying is that if you really want to gain a competitive advantage in today’s impulsive shopper environment, you’re going to have to take a look at how you track and manage your investment in Point-of-Sale (POS) Marketing, and measure the return on that investment.
Hundreds of beverage alcohol distributors across the country know how to do that.
They use OnTrak Software. What’s keeping you from taking a look?