A Display is a Terrible Thing to waste!
Examining POP Compliance Rates & Best Practices
The point of purchase represents the time and place at which all the elements of the sale—the shopper, the money, and the product—come together.
Steven A. Weiss Chief Executive Officer Shop! and his Compliance Committee in this white paper offer the following actionable insights, case studies, and best practices based on their findings. We hope you will leverage the learnings in the following to create and execute P.O.P. programs that address retailers’ challenges so that your display makes it onto the floor and your product ends up in the shopper’s basket. Here are some insights from his publicaton. For the entire white page, "A Display is a Terrible Thing to waste!" visit here…
Companies spend billions every year on displays and other forms of P.O.P. marketing—and for good reason. Point-of-purchase displays and programs offer far-reaching visibility inside stores, help boost sales and influence purchases. That is, IF the displays are in place, correctly implemented, and stocked.
Maximizing your P.O.P. display program results requires a combination of great design, a clear understanding of display economics, and exceptional execution of all aspects of the display program. Effective program execution necessitates excellent project management and attention to detail since there are hundreds of details that need to be coordinated and properly managed to ensure successful execution.
The studies also highlighted the critical role of store placement of P.O.P. displays and the fact that the location can actually be more important than the creative execution. We now know that stopping power and in-store visibility is primarily a function of location/placement and contrast with the surrounding environment. We can’t assume that the most compelling displays will be the most visible and successful ones. Store-level display audits were a significant component of the Shopper Engagement Studies. A number of details were recorded by field ethnographers, including location of displays, types of displays, characteristics of displays, and if products were on sale on the display. Information was logged manually and photos of the displays were included with the appropriate audit entry. More than 8,000 displays were audited and recorded in the mass-merchant study alone.
“What many retailers have been doing to their brands is decreasing the volume of the displays they buy because of the excess inventory problem. They've been decreasing sales volume allocated to the display.
With Shelfbucks MEASURESM and working with field ethnographers, retailers will:
- improve execution of top-performing displays;
- increase sales because stores are going to execute at a higher rate, or at an optimized rate
- send timely alerts to store and field leaders for exactly what's happening with the display
- improved execution in near-real-time, which has never before been possible
- enhance the able to buy programs with the right volumes and assortments that get maximum sales in-stores, which will allow them to reduce excess inventory and markdowns
- increase the purchase of displays that have data, because now they know with a higher degree of accuracy that these displays actually work…” Erik McMillan, Founder and CEO of Shelfbucks
With today’s increased amount of life stressors, marketers and retailers are faced with the challenge of targeting consumers who have less time to spend in the store. They are also now spending less time preparing for their shopping trips.
P.O.P. displays play a critical role in shoppers’ purchase decisions, particularly in the mass merchant channel. Knowing which types of displays have a higher execution and compliance rate in these channels can have a profound impact on sales.
COMPLIANCE BY DISPLAY VEHICLE Effective P.O.P. display programs not only increase basket size and creatively solve the shoppers’ needs. They also help create urgency among shoppers. With all channels experiencing a sales impact with the presence of P.O.P., it’s important to take a look at the various types of P.O.P. that are going up in-stores to see where the biggest opportunities lie.
The highest rates of display execution compliance were witnessed among the following: • Bunkers • End caps • PDQs • Pallets
This suggests that larger and more visually prominent displays such as end caps may drive higher levels of compliance. While floor stands were only executed about a quarter of the time, dump bins and shippers had the lowest levels of compliance, making it onto the store floor less than 10% of the time.
During the promoted time frame, stores with a planned display saw a 193% increase in sales over a non-promoted time frame.
Though not ideal, it is also worth noting that end caps, PDQs, and pallet displays were the only types of P.O.P. that encountered the phenomenon of being executed in a manner that was not planned. In other words, elements were used and deployed in unexpected ways in the retail environment. The impact of P.O.P. displays on sales is hard for retailers to ignore. During the promoted time frame, stores with a planned display saw a 193% increase in sales over a non-promoted time frame. And even unplanned displays had a significant impact, with a sales lift of 121%.
On average, across all displays, planned displays drove the highest sales lift. With under 50% of planned displays executed, there is an opportunity to capture sales simply by improving compliance.
During the promoted time frame, stores with a planned display saw a 193% increase.
PERCEPTION VS. REALITY: MEASURING ROI
The overwhelming majority of brand marketers view retail displays as a cost rather than as an investment. This type of thinking frequently leads to underinvestment in displays, since companies seek to minimize expenses. However, viewing P.O.P. displays as an investment will result in better business decision making. So why even spend money on a display?
Here are a few reasons:
- Gain placement in retail stores that may not be possible without a display.
- Improve the merchandising effectiveness of the product or create a home for the product within a store when space might not exist.
- Create awareness and an identity for the brand.
- Sell more product.
Together, these reasons provide the financial justification for an investment in any display program.
P.O.P. displays are a solid business investment, not an expense. However, measuring the ROI of those displays is of critical importance.
How do brand marketers know if their P.O.P. display has been displayed properly in the store, or if it has even been displayed at all?
Turns out that compliance— meaning whether or not P.O.P. promotions are displayed in-store as planned—varies widely based on the retail channel, the display type and who is responsible for the display installation. A.R.E. | POPAI’s 2015 Compliance Initiative Study polled participating CPGs to see the current state of their expectations around display compliance. What we found was a severe disconnect between expectations and reality.
CPGs had a perceived compliance rate around displays upwards of 70%.
The reality: display compliance was 40%—no change from the 2014 study.
What can account for this vast difference in compliance perception versus reality?
Three factors contribute to the success or failure of a launch:
1. Retail channel
2. Display type
3. The installer
With hundreds of details involved in coordinating and managing a P.O.P. program, effective execution requires excellent project management and attention to detail.
FROM PPV TO ROI, DISPLAYS OFFER A REAL SALES IMPACT
The most important message for brand marketers is this: An effective P.O.P. program never runs like clockwork; it needs constant attention and re-evaluation.
However, P.O.P.—even if it’s not executed as planned—rarely fails to deliver a significant boost in sales. Today’s savvy brand marketers recognize the old adage that the difference between success and failure often depends on the last 5% of effort rather than on the 95% that preceded it.
In shopper marketing, that last 5% manifests itself at the point of purchase— just before shoppers choose what to buy.
"The retailers and the CPGs tell us all the time, 'We constantly ask ourselves, are these things even working? Which ones are working and which ones aren't working?' We've been working with retailers for over a year, and we had people more than once tell us, 'Oh, we were just sitting in a meeting the other day with our CPGs, and we're just trying to remember whether this program even worked last year and how well it did.' They're swimming in data to some degree, but there's no effective way to know what's happening with these merchandising programs and no way to pull that together to make smart decisions.
The one thing we feel confident in, is this is a true industry problem. We verified it with many retailers and CPGs, and there is today no other reasonable way to get this information. They can choose to not have the data, like they don't today, but if they want the data, there's only one effective way to get it right now, and that's from Shelfbucks MEASURESM"...Kevin Stambaugh EVP, Chief Product & Data Officer
How to Optimize POP Merchandising Displays