One Blog |July 19, 2010 | POS Tracking Software

Managing Marketing At-Retail: Your Competitive Advantage - Part 1

Mark Fullerton

Part 1

The Old Normal “It’s Always Been That Way”

Let’s look at Marketing At-Retail from the point-of-view of alcohol beverage distributors (ABDs).  ABDs are positioned in-between the supplier and the retailer in a governmentally mandated three-tier system.  They are in a unique spot compared with distributors of other, non-regulated, products that are sold at retail.  

For example, certain state and local laws can dictate what an alcohol beverage distributor can and cannot do with respect to promoting, selling and transporting their suppliers’ products. Additionally, a growing number of suppliers, in an on-going effort to reduce their costs, are placing even more pressure on the distribution tier to provide, produce and place Point of Sale Marketing materials, including Beverage Menus and Beverage Samples – further shifting costs to their distributors.

Historical Perspective

Since the day prohibition ended over 75 years ago, there has been some kind of marketing at-retail materials used to promote the sale of alcohol beverages.  Generally these materials are lumped together under the name POS (point-of-sale).  In the early years – after the repeal – retail signs, store windows and walls were often hand-painted and proudly announced a specific beverage or brand availability, usually proclaiming certain products were being offered with a sale price at this retailer’s store. These 'works of art' were typically the Beer POS signs of the times.

Over the past 75 years, POS has evolved considerably.  Now, rarely, if ever, is POS hand-painted, for example.  Rather, today’s POS is usually the product of graphical software programs, and wide-format color printers.  Often this POS is produced locally in the distributor’s own sign shop by specialized graphics personnel.  A walk through most ABD’s sign shops will reveal an impressive facility complete with multiple printers, computers, print shop supplies and personnel.  For many distributors, custom POS, temporary POS, and permanent POS is their second or third largest business expense, after payroll and transportation expense.  It is an expense that most ABDs admit is out of control and one that provides unknown and, for many, unknowable return on investment.  When asked why such an expensive and important part of their business is left essentially unmanaged, many ABDs will frequently reply, “It’s always been that way.”

Yet many of these ABDs are the exact same companies that spend 6 figures, or more, on order entry and accounting systems.  And some will spend a like amount on logistics and warehouse management systems, remote mobile order entry systems, and truck routing software. All this in order to improve customer service, gain operational efficiencies and save precious drops of fuel.  When asked why they are willing to invest, in some instances, millions of dollars to acquire or upgrade their back-office, logistics, routing and mobile sales-force applications they will often answer “To save money,” “To dominate the competition,” or Because these applications will help me manage and control my core business processes, my core competencies.”

Mark Fullerton

 

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