One Blog |August 13, 2013 | POS Tracking Software
Lessons About POS Marketing from the Beverage Alcohol Market
We opened our doors as a new company – OnTrak Software – in January, 2007.
We joined the National Beer Wholesalers Association (NBWA) and attended our first NBWA convention in the fall of that year. Since then, we have attended every annual NBWA convention. Then in 2010, we joined the Wine and Spirits Association (WSWA) and began attending WSWA conventions each year since then.
We've grown our customer base substantially since 2007 when we had 11 beer distributors using our point-of-sale (POS) marketing management software: SignTrak. We had originally started the company focusing exclusively on Anheuser Busch distributors, but after our early experience at NBWA and WSWA conventions, we quickly realized that all beverage alcohol distributors face the same issues with respect to their POS marketing programs.
What We’ve Learned
We've learned that POS marketing is the most effective method for turning a prospective beverage shopper into a buyer. POS includes custom and temporary printed signs, food and drink menus, permanent signs and displays and product sampling activities. For most beverage alcohol distributors POS marketing spend is either their second or third largest expense item, behind payroll and sometimes fuel; and there are available supplier bill-backs or marketing co-op dollars to offset these expenses.
But a change has taken place.
Suppliers, who were once willing to reimburse distributors for most of their POS costs, have had a ‘change of practices’. Apparently this change, which unfolded over the last few years, may have come about as a result of both the Great Recession, and distributor and supplier consolidations. Although suppliers have remained willing to financially support their distributors’ POS marketing activities, suppliers now require distributors to provide POS activity and cost reports in order to qualify for recovery of the suppliers’ marketing allowance dollars.
Over the past six years, we have witnessed the blurring and mingling of the products beverage alcohol distributors represent. For example, beer distributors have been steadily picking up non-beer products, including wines, spirits, mixers, carbonated soft drinks, energy and function drinks, and flavored and non-flavored waters. Meanwhile, wine and spirits distributors have picked up more and more non-alcohol beverages and malt beverage products from the ever growing list of craft, specialty and import ales and beers that have been making their way to market.
During this time we’ve learned that while many countries and regions consumption of beverage alcohol has flattened, U.S. consumption of beverage alcohol products is on the rise. Notably, U.S. wine consumption rose 2.2% last year to over 345 million cases and retail revenues jumped nearly 4% to over $32 billion. Wine industry watchers are predicting U.S. wine sales may increase to 450 million cases (+23.3%) within a decade. You will enjoy additional comfort when you couple these beverage alcohol sales facts and forecasts with a generally optimistic outlook for consumer goods as a whole.
We have also observed a dramatic change in the way we, as shoppers, are marketed to.
The market has moved from a traditional advertising model – based upon TV, radio and print advertising – to a point-of-sale or shopper marketing model based upon persuasive materials placed at the point-of-connection between product and shopper: in the aisle, on the shelf and often in our faces. As merchandisers, we’ve learned that the in-store experience matters perhaps more than any other; and that POS marketing (e.g., signage, displays, samples and other point-of-sale collateral) is the best way to drive attention to brands and convert shoppers into buyers.
About OnTrak Software
We’ve learned virtually everything discussed above from our customers who have taught us to deliver solutions that Track, Measure and Manage POS marketing campaigns so they can:
- Track and Lower Costs - Eliminate error and reworks
- Speed Time-to-Market - Gain a competitive advantage
- Increase Supplier Bill-backs – Improve accountability with suppliers
- Maximize their POS ROI - with integrated analysis and reporting tools
For more information about OnTrak and our POS Marketing Solutions, click the following button: