Floor show

It remains one of the great mysteries of marketing that brands don’t invest more of their advertising budget in researching point-of-sale (PoS) marketing.

Considering that around 80 per cent of purchasing decisions are made on impulse, the way a brand is represented in store can give it a crucial edge in influencing the consumer. Yet it appears that only the major brands are willing to invest in research.

Typically, PoS is at the bottom of the pile when it comes to advertising budgets. One of the reasons for this is that it is perceived to be less glamorous than other above-the-line activity. And the fact that PoS is not at the forefront of agencies’ thinking means there is rarely enough time or money to do the job properly.

David Williams, chairman and chief executive at NDI Momentum, part of the Interpublic Group, says: “It’s the time and cost factor that holds PoS back. Clients should research the PoS market from the very start. They should be putting different displays into similar circumstances to see which ones perform best.”

PoS material is often badly positioned within the store, or is designed in such a way that only a small percentage of stores can use it. The attitude of the store manager is also critical, as many stores have their own rules about what can and cannot be displayed.

Lack of planning

Research carried out last year by in-store consultancy Storecheck revealed that some stores used less than 40 per cent of the PoS material sent to them, highlighting a complete lack of planning by brands. Yet Storecheck’s research also revealed how effective PoS can be despite the fact that placements are limited.

Storecheck managing director Colin Harper explains: “The effects of off-shelf PoS material can be quite startling. We monitored one promotion in Safeway, where a flat-pack display unit was being used to promote a relatively new product. This product had been in distribution for enough time prior to the shipper [a piece of PoS material] being introduced for the standard sales rate to settle down.

“The shipper, which had no offer attached to it, was placed in under 50 per cent of Safeway stores. When we looked at the sales increase that occurred as a result of the PoS placement, and extended it, taking into account the size of the outlets, the effect of the &£60 shippers in every store would have been a ten-fold increase in sales without noticeable impact on other products in the same area. In practice, the placement reached only 11 per cent of its potential.”

Telling managers

Store managers reported that things which would help them to place more PoS material were, in order of preference, merchandising teams, better briefing from head offices and better assembly instructions. This clearly points to the fact that brands are neglecting PoS research and it remains an under-exploited area.

Harper adds: “It appears from the research that the majority of store managers thought the shippers were a waste of their time. Given the effect on sales that off-shelf displays can have, perhaps manufacturers should spend some of their advertising budget on building value into PoS as well as into brands.”

Communications agency View, working on behalf of Blockbuster, builds various PoS elements with store layouts in mind. Work is carried out on a trial basis initially and Bernard Guly, View’s managing director, believes this gives a good indication of any uplift in sales.

He says: “The trials demonstrate better than any paper-based research how PoS material affects the buying habits of consumers. From the results of trials, we know if the PoS is effective, and whether it should be introduced nationally.”

Guly also recognises, however, that PoS promotions can be very expensive. Blockbuster has an estate of about 700 stores, so to implement new displays, including research and trialling, is a costly exercise. Cost does appear to be a sticking point for many brands.

But client service director at field marketing company FMCG Russell Green says: “With new hand-held computer technology there is no excuse not to evaluate PoS campaigns. You should feed back to clients on a daily basis how successfully the promotion is progressing. While the technology to do this invariably costs money, the benefits of instant evaluation more than cover that cost.

“For instance, if halfway though a PoS campaign sales figures are lower than expected, the PoS strategy can be tweaked while in full flow, maximising the client’s return on investment. This is preferable to merely looking at the results at the end of a campaign.”

Sales are just the start

But just how detailed and accurate can, or should PoS research be? Understanding a display’s full impact is not necessarily just about measuring sales. Some PoS companies, such as RMS (Retail Marketing In-Store Services), carry out sophisticated research techniques, including setting up video cameras in stores to film the way customers react to displays.

Guy Vaughan, director at RMS, explains: “We do a lot of work in the financial services sector, and we measure consumers’ attitudes and awareness when they are in a retail environment.

“We have a software system that allows us to analyse the tape, so we can start to be more scientific about traffic flow changes and customer impact. We measure staff reactions to PoS as well. A company might have the best designs, but if the staff don’t like it the material doesn’t get placed.”

Vaughan points out that PoS material can also reinforce brand values, although this is difficult to demonstrate through research.

Investigating motivation

One company attempting to do this is new media venture Translucis, which is backed by Diageo. The company has been using plasma advertising screens in UK bars, specifically targeting the difficult-to-reach 18 to 24 age group. Advertisers have included Bacardi Breezer, Guinness, Gordon’s Gin and Sol lager, as well as lifestyle brands such as Sony, Reebok and Glamour.

Translucis is researching what motivates young people to buy certain products. It uses this information to advise clients about the type of advertising that might work best. Monthly polling of 18to 24-year-olds reveals the coolest brands and the latest drinking trends.

Sue Aitken, marketing director at Translucis, explains: “We’ve found out, from our consumer research, what ads consumers like and dislike. We know what sort of ad will get the brand talked about.

“Not only can a company alter the sales dynamic in an outlet, it can also reinforce its brand values. Historically, PoS in this context has been about beer mats and posters. This is a step up from what people did in the past.

“We can feed back research to our advertisers to let them know what consumers are thinking. And it’s useful for clients that are putting together tailored ads for the screen, or are considering it.”

PoS does matter

Average spend on PoS is increasing, but slowly. There is no doubt it should be one of the options being considered by spending decision-makers, not one passed down to the junior ranks within the marketing team. But until the image of PoS itself is boosted, it is unlikely that clients will think about spending more money on PoS research.

In the past, PoS has suffered because of the difficulty in quantifying the impact in-store displays make. Now, research is available that is far more quantitative. There is little excuse not to invest in this research, say the industry.