On Solid Ground

The need for results sends P-O-P soending up 18.1 percent.

Point-of-purchase advertising is making a big comeback. Not in terms of spending, because the segment has always posted strong growth. But in terms of respect, it’s no longer “that thing” marketers do because they must. Heck, it’s even a measured medium now.

As the Internet hype faded and the economy began to stumble in 2000 (forcing brands to ease back on mass media buys), the back-to-basics P-O-P tactic gained more prominence, with spending up 18.1 percent to $17.0 billion, according to promo estimates based on industry sources. In fact, brands were demonstrating renewed faith in P-O-P even before the economy began its decline.

Part of the growth stems from the fact that account-specific demands have brands developing different P-O-P displays for individual retailers. Another reason is the continued migration of P-O-P displays to industries outside the traditional CPG/grocer universe. Last fall, for instance, New York City resort operator Club Med tapped P-O-P shop Thomson-Leeds to develop floor displays for travel agent offices featuring a beach chair with a surf board on one side and a pair of skis on the other.

High-end advertisers such as financial services are also embracing P-O-P; the segment has been among the fastest growing categories in P-O-P for the last five years.

The tactic is also being used more often as a complement to mass-media campaigns rather than simply as a stand-alone (no pun intended). And sometimes it’s even the other way around: In April, The Gambrinus Co., importers of Modelo’s Corona beers, kicked off its annual Cinco de Mayo festivities with Numero Uno Party Beer, a P-O-P campaign supported by TV spots created by The Richards Group, Dallas. Retailers received materials that let them build pyramids with Corona (naturally) at the top.

“The Cinco de Mayo event has grown to such an extent that it applies to every trade channel,” says Don Mann, Modelo products director. “We design different components to appeal to every one of our retail outlets, from grocers to mass merchandisers to convenience stores.”

The Internet and other technological advances have improved the business, with many back-end functions which previously required endless mailings now being handled in cyberspace. New high-tech displays are starting to replace the standard cardboard cutouts. In June, New York City-based Macy’s Bridgewater, NJ, store begins testing 15 electronic SmartPaper signs in its Kidz Zone children’s department through Christmas 2001. SmartPaper is offered by retail signage developer Gyricon Media, Palo Alto, CA, which spun off from Xerox last fall. Gyricon has also teamed with Thomson Leeds, New York City, which works with such P-O-P clients as Microsoft, Philip Morris, and American Express.

Coca-Cola Co., Atlanta, tapped audio-animatronics developer AVG In-Store, Chatsworth, CA, to develop life-sized robotic characters for use at retail as well as at trade shows and special events. Dubbed RICK (Retail Interactive Coca-Cola Kiosk), the figures will make weekend appearances at Wal-Mart, Target, supermarkets, and other retail outlets in exchange for priority follow-on display space.

Technology has speeded up the P-O-P process — and the demands of marketers. Energizer Batteries recently called on Cleveland-based AG Industries to produce an endcap within a month, about half the time it normally takes to deliver such a program.

Seller’s Market
All is not completely rosy in the P-O-P world, however. The continued trend toward national retail chains such as Wal-Mart and Kmart and the demise of small independents may provide greater visibility for brands lucky enough to work their way into those accounts, but it also means less overall shelf space. And those national retailers are becoming more demanding about what

P-O-P they will accept. Chains not only want to distinguish themselves from the competition but toenliven their own stores individually. Thus, P-O-P materials in Wal-Mart assuredly won’t work for Kmart, and may not even work in the next town’s Wal-Mart.

Setting Standards
Sell-in and compliance were difficult enough to ensure even when the deck was less stacked against manufacturers. And while giants like Frito-Lay or Nabisco carry a lot of weight with retailers, many smaller brands don’t have the clout necessary to get what they need.

That’s prompting calls for standardization guidelines from both retailers (who want easy-to-assemble displays that literally pop right out of the box) and manufacturers (who don’t want to waste money on displays that stores won’t bother assembling). “There’s more discussion as to what is the standard for what will or what will not go up,” says Craig Sinclair, chairman of the Retail Advertising and Marketing Association (RAMA) and vp-advertising at Walgreens, Deerfield, IL.

The push for standards could get a huge boost from Point-of-Purchase Advertising International (POPAI), which for several years has worked with the Advertising Research Foundation and several of the largest CPGs to develop measurable research for the industry. At the annual POP Marketplace, held in March in Chicago, POPAI unveiled the initial findings of a survey sponsored by Procter & Gamble, Anheuser-Busch, Frito-Lay, and others that analyzed 60,000 P-O-P displays in 250 supermarkets covering 22 major U.S. markets. “Our ultimate goal is to provide proof of placement to this industry,” says POPAI president Dick Blatt.

The study found signage present on more than 90 percent of secondary displays, but manufacturer preprinted signs graced a mere 13 percent to 35 percent of them. The rest were retailers’ own signs.

Properly displayed P-O-P boosted sales anywhere from two percent to 65 percent, depending on brand size and P-O-P mix. Signs such as header or riser cards increased weekly store sales six percent for one brand and two percent for another; base or case wraps boosted total sales 12 percent, standees 27 percent, and inflatable or mobile P-O-P 40 percent. Signs that convey a brand’s sports, movie, or charity tie-in boosted sales a whopping 65 percent.

POPAI says it will release further studies on the effect of P-O-P in mass merchandisers and convenience stores, and expects the industry to have a set of standards to follow in the next five years. Until then however, brands are scrambling. “No company is doing a terrific job of taking over the aisle,” says Simon Haddad, creative director at EastWest Creative, New York City. “I think it comes down to budget. Point-of-sale is a necessary evil.” If that’s the case, then this industry is is damned.

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