One Blog |July 11, 2014 | POS Tracking Software

How Measuring At the Point-of-Sale Helps Convert Shoppers to Buyers

Mark Fullerton

Winning with Point-of-Sale (POS) Marketing

Price is Important

For the consumer goods that most shoppers would consider interchangeable, price is important information, and perhaps the most important information for shoppers to make the decision to buy.

For products like Diet Coke and Diet Pepsi, or competing name-brand light beers, for example, many shoppers will almost always buy the one that is priced lower.

If the “lowest-priced diet cola of the week” changes from week to week (Coke to Pepsi and then from Pepsi to Coke), it should come as no surprise that the ‘on-sale’ diet cola will almost always enjoy a sales increase.

The Purpose of POS Marketing

The purpose of the POS marketing materials for these largely interchangeable, on-sale, diet colas and light beers is to inform the shopper of the promotional price.

Little, if anything, can be gained by attempting to persuade shoppers to buy based on the merits of the brand-name itself, or of the specific diet cola or light beer. The market knows Coke; and the market knows Pepsi. So if Diet Coke is a $1.50 cheaper per 12-pack than Diet Pepsi, that fact alone may provide all of the information and persuasion many shoppers need to make the decision to buy

There are a decreasing number of brand loyalists that will typically buy “their brand” even if it costs more. For them, $1.50 off of a 12-pack is an insufficient pricing incentive to change their minds.

Measuring the Impact of POS

It would be dishonest and inaccurate, at this point, to suggest that suppliers, distributors or retailers should give up on POS marketing and post-campaign measurement for high-volume, price-driven items, like these diet colas and light beers.

Measuring the impact of POS, where the message is price first and product qualities second, is unlikely to be as effective as the measurement of the impact of POS that is working to persuade shoppers to become buyers by informing them of the features and benefits of the product first, and price second.

But don’t underestimate the power of POS to increase sales even if its prime reason is to present a low price message.

How About Beverage Alcohol?

So let’s talk about the behavior of suppliers and especially distributors of beverage alcohol (BA) - One of the largest categories within the over $2 trillion US consumer goods universe.

It does appear that this category, over the course of nearly a decade, has embraced point-of-sale (POS) marketing. They sure spend a lot of money on it!

However, there has been very limited utilization of POS tracking and measuring technologies, even in the face of supplier encouragement. We know that most suppliers offer financial incentives to distributors who invest in POS. That’s because suppliers know that POS works. But in order to get suppliers to pay the distributors, more than a handshake is required.

What suppliers want and increasingly require is information about the impact of the investment: What was spent, where, when, for what brands, and what were the resulting sales?

Can you see why POS tracking and measurement is critical toward providing that valuable information to suppliers?

The Beverage Alcohol Marketing Challenges

Somewhere, last year, I read an article where the statement was made that seems so close to the truth about BA marketing and sales promotions as to cause me to wince:

No industry works harder at being lazy”.

The applicability of this statement to BA distributors seems to be accurate.

These distributors are the prime source for all POS marketing materials that is placed at-retail, in the aisles, on the shelves, in the coolers, and on the walls. Distributors collectively advertise over 150,000 beers, wines and spirits offered for sale to consumers and shoppers across the country.

However, many of the distributor sales reps, who have no training in effective POS marketing practices, are expected to provide POS marketing materials and develop retail marketing programs for their customers.

This expectation is a good thing.

However, there is generally little thought given to what POS message is desired, beyond low price or a general theme. How do these distributors and their reps decide the following:

  • What is the overall strategic POS Marketing Plan?
  • How will the plan be executed?
  • How will the POS marketing initiatives be measured?
  • What ROI is expected vs. what is actually achieved?

OnTrak’s Perspective

It is our view that there is little POS marketing campaign planning being done by distributors; Very little POS marketing goal setting, and even less order and cost tracking; And almost no measurement of the impact of BA POS, beyond the vague notion that “it works”.

So if our perception is accurate, then any of the regional suppliers and their distributors, who adopt OnTrak’s marketing technology to accomplish even some of these activities, will gain a huge competitive advantage.

If POS marketing is planned, executed and measured – and done so with the discipline possible with marketing technology software – there is no reason but to believe that even a small distributor can actually gain market share over a large one.

Isn’t it time to learn how OnTrak’s POS Tracking Software can help you accomplish all of this?

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