Despite the Internet’s best efforts, P-O-P is thriving as a marketing tactic.
Five years ago, the future of point-of-purchase marketing was in doubt. After all, the looming prospect of Internet shopping threatened to render bricks-and-mortar stores obsolete, and it didn’t sound like the new online world was going to require many endcaps or window transparencies.
Alas, thus far the emergence of online shopping has only reaffirmed the enduring appeal of traditional retail. And P-O-P has become more popular than ever, as marketers look for in-store advertising techniques that can generate much more than impulse buys.
With the evolution of increasingly sophisticated interactive kiosks, the live salesperson is in more danger of becoming obsolete these days than the product display. Competition for shrinking retail space (caused more by a general change in consumer habits than any Internet-specific encroachment), coupled with the ever-growing power of retailers who can say yay or nay to marketers’ display requests, has brands scrambling to redefine a medium that many long took for granted.
More than ever, P-O-P efforts are being designed to complement promotional campaigns rather than simply to command attention in crowded aisles. “Most mass media is becoming fragmented, but point-of-purchase remains a pure buy,” says Doug Leeds, ceo at display designer Thomson-Leeds, New York City. “P-O-P captures people when they’re close to a decision. Instead of being an extension of packaging, today we are part of the marketing process from the start.”
Industry estimates put the P-O-P industry at $17 billion in 2000, which represents a 15-percent increase over 1999. The booming economy has floated most business boats, and P-O-P vendors are riding the wave of success as well. “I used to say P-O-P was recession-proof, but this year our clients spent more than ever,” says Leeds. “We did as much business in the first six months of 2000 as we did in all of 1999.”
Competitors agree. “We’re not just in a high cycle for the industry,” says Don Brennan, group director of display at Einson Freeman, Paramus, NJ. “Anything that can drive a transaction goes. A shopper has 10 seconds to decide. Impulse buys are the point of P-O-P.”
But the uses of P-O-P are moving beyond simple sales reinforcement to more sophisticated brand-image influencing. And while snack food and beverage marketers such as Frito-Lay and Coca-Cola still dominate the industry, the success of P-O-P is attracting marketers well beyond the traditional CPG arena.
Last fall, resort operator Club Med, New York City, developed (with Thomson-Leeds) a floor display for travel agents that featured a beach chair with a surfboard on one side and a pair of skis on the other “to show that Club Med has both sun and snow destinations,” says Club Med marketing manager Alex Mager. “We needed something that could be easily assembled and didn’t take up much floor space, since retailers have limited room. We also wanted something that could have a life span of six to 12 months.”
Based on early returns, Mager says Club Med is pleased with the effort. “It’s always important to have a point-of-sale presence to differentiate yourself from the 50 other brochures on the shelf” says Mager. “Over the past year, we’ve been putting more money and time into all marketing areas, including P-O-P.”
Financial services are another hot-bed for the industry. “Five years ago, financial services weren’t even on our radar,” says Dick Blatt, president of Washington, DC-based industry association Point-of-Purchase Advertising International (POPAI). “But they’ve realized that P-O-P is where the customers are.”
For New York City-based American Express, Thomson-Leeds developed a safe, retractable pen mount on cash registers for any retailer that would take it, and heavyweights such as Costco did. “American Express knows its customers are more comfortable [buying] when they see the blue box at the checkout line,” says Leeds.
Retail Tango Of course, retailers still hold the power. As national chains continue to squeeze out smaller independents, brands have fewer options and less shelf-space through which to promote their wares. Superstores such as Wal-Mart and Kmart dominate the retail – as well as the geographical – landscape.
“Everyone feels the pressure to own the retail environment,” says Simon Haddad, senior creative director at EastWest Creative, New York City, which does P-O-P work for heavy hitters such as Nabisco, Beck’s Beer, and NASCAR. “People are looking for more ways to approach a display, and after awhile it’s like, `What more can we add?'”
Consequently, retailers are becoming more demanding about what they will accept. Chains are not only looking to distinguish themselves from the competition, but to enliven their own stores individually. So what flies in Wal-Mart almost assuredly won’t work for Kmart – and what flies in one Wal-Mart may not even fly in the next Wal-Mart.
Retailers are also finding new uses for P-O-P materials. “A lot of chains are using point-of-sale materials as ambience rather than for just driving sales,” says Matt Borgard, senior national accounts manager for Chicago-based Barton Beers, importer of such brands as Corona and St. Pauli Girl and a recent inductee into POPAI’s P-O-P Hall of Fame.
That’s prompting calls for standardization from both retailers – who want easy-to-assemble displays that literally pop right out of the box – and marketers – who don’t want to waste money on displays that retailers won’t bother assembling. “There’s more discussion as far as what is the standard for what will or will not go up,” says Craig Sinclair, chairman of the Retail Advertising and Marketing Association (RAMA) and vp-advertising at Walgreens, Deerfield, IL.
With an increasingly select group of retailers holding the cards, it’s becoming more difficult for marketers to uphold sell-in and compliance. “We’ve heard through the grapevine that close to 30 percent of displays don’t get put up,” says EastWest’s Haddad. And while a giant CPG like EastWest client Nabisco usually carries in-store clout, “many of the smaller Kraft brands that we work with don’t have the weight to push the retailers around,” he says.
For many marketers, the current consolidation of retailers is a mixed bag. “It can be both easier and harder, depending on who you deal with,” says Borgard. “It’s easier because there are fewer people you have to deal with to get something done. But it can be harder if you have a bad relationship with the retailer, because then you have no alternative to who you can talk to.”
Ease of Use Either way, marketers have retailers in mind when developing their displays. For last November’s tie-in with Universal Pictures’ Dr. Seuss’ How The Grinch Stole Christmas, East Hanover, NJ-based Nabisco developed a two-month on-pack campaign through EastWest Creative asking consumers to figure out how product packages had been “Grinched” with errors or omissions in the usual appearance. Shoppers who submitted entries were automatically entered to win $100,000 and other prizes in a random drawing.
“We’re taking more care with what our displays look like and fitting them to the retailer’s needs,” says Ann Giambastiani, manager of merchandising materials at Nabisco. “We’re more conscious about what we put up, and we’re taking advantage of more opportunities for account-specific programs.”
AG Industries, Cleveland, OH, created an endcap display for Imperial Home Decor Group’s Ralph Lauren Wallpaper that received a Gold Design of the Times award from P-O-P Times. More important than the award, however, was the fact that wallpaper dealers who carried the display last year say they sold 55,000 more units this year than they did in 1999. “We put our money behind P-O-P because it’s well worth it,” says Kathy Wright, manager of advertising, p.r., and fixturing at Imperial Home Decor, Cleveland. “We get solid brand recognition, and displays make sampling easier for our dealers.”
If These Walls Could Talk How much has technology changed the industry? That depends on which technologies you’re talking about. While endcaps and shelf danglers haven’t changed much in the last decade, there has been an explosion in high-tech items. “We’re seeing a lot of interaction with kiosks and video,” says Einson’s Brennan. “But other than that, much of what you see is just refabricating tools we were using 10 years ago.”
Interactivity, however, is the future. Phillips Petroleum, Bartlesville, OK, recently announced a deal with Dallas-based kiosk operator Billboard Video to provide full-motion news and advertising feeds to gas pumps at its 266 locations in the South and Western U.S. AG Industries earned another Gold Design nod for a kiosk it developed with software maker ObjectSoft, Hackensack, NJ, that runs movie trailers and provides Internet links in 300 home-entertainment stores including Blockbuster and Hollywood Video outlets. For FujiFilm, Elmsford, NY, AG Industries produced a Digital Picture Center for camera shops that lets consumers download photo files, scan slides or negatives, and output images.
New Internet clients are also pushing the drive toward interactive displays. “Marketers and retailers understand they need a good e-front as well as [good] store fronts,” says Lisa Miller, vp-director of sales at Express Group, Walled Lake, MI.
But while tangible displays still rule, the back-end functions of the business are heading almost exclusively online. “Our clients want everything to be online. Everything has to be e-mailed,” says Miller.
Technological advances have also raised expectations on delivery. “The pace is definitely increasing,” says AG Industries’ Chris Mortenson. “Energizer Batteries had an endcap that should have taken eight to 10 weeks to produce. They asked us to do it in three.”
The Last Straw While every brand marketer has the sales numbers generated by his last upfront display, the industry as a whole historically has been notoriously short of hard data. POPAI is seeking to change that through a joint study with the Advertising Research Foundation that will attempt to establish how many displays are put up and how many impressions they generate. Initial results will be unveiled in March. The study is sponsored by such CPG heavyweights as Procter & Gamble, Frito-Lay, and Pepsi-Cola.
“In recent years, the question has come up, `Do the retailers need dot-coms or do the dot-coms need retailers?'” says POPAI’s Blatt. “Either way, it’s great for this industry. P-O-P is still the last three feet of the marketing campaign.”
And marketers always want to put their best feet forward.
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