New Zealand Marketing magazine

Higher purchase

by Patricia Moore

Originally published in NZ Marketing March-April 2010, page 31

Point of sale is often seen as the poor, slightly unglamorous cousin in the traditional marketing mix. But now, after a period of recession-inspired frugality and an array of new, more effective technologies, point of sale is more akin to a sleeping giant, writes Patricia Moore

During the recession, brand managers and the increasingly frugal bean counters calling the shots wanted greater returns on their marketing investment, which led to something of a resurgence in the popularity of point of sale (POS) activity. And now, as technology allows its potential as a consumer engagement tool to be realised, this marketing workhorse is starting to shake off its Cinderella image.

“Brands and retailers are putting more emphasis on connecting with the shopper at point of purchase,” says Natasha Ching, product manager at SPOS. “They’re aware they need to stand out or miss out.”

But ‘standing out’ has come a long way from dockets touting discounts and stacks of product at the end of the aisles. “There’s more sophistication in the market, more focus on how, through the entry mechanic, we can have a conversation with the consumer,” says Darryl McClay, managing director at Raydar. “There’s no point in just bribing them with a promo if there’s no lingering memory of the actual brand. We want to make sure a particular product gets a second and third bite of the cherry within a buying cycle.”

Drive the sales vehicle

The numbers vary, but it’s widely accepted that up to 70 percent of brand decisions are made at the point of sale. So are opportunities going to waste?

“Overall, I don’t think New Zealand is maximising the potential POS presents to truly influence the purchase decision,” says Danielle Barclay, general manager—retail experience at DDB Shop. But the static posters and counter mats give it a less than glamorous image, she says.

‘Traditional’ POS material is still hugely important, although the recession did see clients spending more carefully, says Sandy Young, manager at Warner Displays. “But brands that have had funds to invest in point of purchase have gained market share.” And the next few years will be interesting, she says. “Point of purchase is well and truly recognised as a vehicle to drive in-store sales and gain market share and brand awareness.”

But this notion of traditional POS material is changing, says Scott Shore, director and operations manager at Adgraphix. “We’re seeing a shift to more variety of materials and more creativity. This could be due to brand managers being more educated on what they can achieve with new technology.” But it can also be budget driven. “Customers are using print materials that cost more but save time and production costs through to freight and labour.”

Then there’s the trickle-down effect on brands and retailers as consumer concerns around sustainability and recycling grow, says Ching. “Working to minimise their environmental impact is a key way they can engage with their customers.” And POS options are reflecting this, she says.

Shore says budget constraints have seen ridiculously cheap pricing being quoted. “It’s definitely not going to help the industry long-term. Brand managers need to be aware that if their brand is important, low-quality production will have a direct reflection on it.”

POS 2.0

Interactive POS activity—or lack thereof—is creating the most discussion. And Barclay puts New Zealand behind the rest of the world in this area. “Many retailers have been burned over the years. Rolling out digital screens at a high cost with unrealistic ROI expectations has stunted development.”

Marketers need to realise digital signage is not just another place to play a TV ad, she says. “With the power of scheduling software, content playing can be tailored to the store, even customer level, making it a powerful direct-to-customer medium.”

Interactive has moved on from the stand alone, in-store digital signage screens, says Ching, and now includes the likes of “self-service kiosks that guide the consumer through the purchase process, Smart Shelves with pressure sensitive sensors triggered to play product information as an item is picked up, fully integrated labelling and retail signage solutions that can be updated remotely from a single source”. The downside is that these technologies present a significant investment, but interest is definitely there, she says, particularly from larger retailers.

Barclay says using digital signage to its true potential would mean tailoring content by location, time of day, day of the week, gender and age. “This may seem a bit Big Brother, but the content playing can be targeted to specific needs. Partnering digital screens with scent, sound and even triggered mobile messaging also helps ensure the message is noticed, remembered and acted on.”

With static, digital and experiential media in 23 major shopping centres across New Zealand, Eye Shop’s Alison Diaper says there’s been no slowing in mall media advertising. “The perception that the technology costs more is not the case with our digital products.” She says more marketers are successfully using digital technology for short-term campaigns and tactical opportunities.

Measuring POS has always been a challenge, but a start has been made using facial recognition technology to track customer interaction with a display or message, says Barclay. This can determine the conversion rate of those who see the display or message, as well as their gender, age group and length of time spent looking. “Suddenly this gives hard and fast data to base decisions on and ensure success.”

Good taste

Reports in Australia last year pointed to a ‘tastings boom’ as advertisers shifted their focus from mainstream media to product demonstrations and tastings. “Offer the consumer a sample of the product in-store and communicate the features and benefits, and your product will fly off the shelves,” says Caroline Evans, chief executive at DemoPlus.

“Most shoppers work from a list, noting items, not brands. Interaction with consumers at the point of purchase will engage new customers, encourage brand switching and defend your brand from the competition,” says Evans. “DemoPlus has seen an increasing number of brands divert funds away from mainstream media to demonstrations, sampling and experiential activities.”

Jeremy Hunt, account director at Brand Spanking, points to an integrated campaign for Appletiser (sampling, floor, shelf vision, sales promo with rep and retailer engagement) that saw double-digit sales growth compared with the same two months a year earlier. “It’s an excellent example of a comprehensive campaign combining different elements to give it the greatest chance of success.”

But POS isn’t just about getting product into people’s mouths, says Anne Hirst, managing director at Phenomenon Promotions Agency. “It’s about them being aware of the brand and forming a closer relationship with it.” More businesses are keen to work in the area because they can see what they’re getting for their money. “They get the data and they can see the ROI. It’s not about hoping to see a peak in a report in two months.”

POS promotions don’t have to be big to be good for brand activation, says Raydar’s McClay. “They just need to be something that will appeal to the target market, align with the brand, say the right thing about it and appeal to the consumer in the right way.” With samplings, he says it’s important there is an understanding of what the brand experience should be. “The food becomes part of that.” Too often, he says, there’s a disconnect and the marketing message gets lost. “We want them to do a test drive and walk away saying, ‘That BMW is exceptional’. We don’t want them saying the V8 was grunty. We’ve got to talk about the brand.”