Could it be that the renowned power of the multiple retailers in this country is beginning to soften? Earlier this year, Boots found itself left out in the cold when Unilever refused to bow to pressure and stock its newly launched Dove haircare range exclusively in Boots stores (MW February 28).
Both manufacturers and point-of-purchase (PoP) consultants say that retailers are proving more flexible when it comes to negotiating PoP material in store. This hasn’t always been the case. Soon after the introduction of own-brand labels, retailers became remarkably coy about using PoP material from manufacturers in categories where the retailers wanted to establish a strong own-brand presence.
Cadbury Trebor Bassett (CTB) in-store marketing manager Paul Humphreys says: “There is a great reluctance on the part of retailers to reduce space for their own-label products because it is such a profitable category for them, even though they don’t give it any above-the-line support. But retailers realise that consumers expect to see more than own-label products on shelves and so they have to make more space for other brands.”
But if the policy of retailers is to become more flexible towards PoP, then there are many issues that both PoP consultants and their clients need to face as they battle to stand out in stores where shelves are heaving with products.
According to AC Nielsen, most grocery stores are selling double the amount they were ten years ago – often through the same shelf space.
Limited store space is an issue that will never go away – it can only get worse, according to Steph Whitmore, business development manager at NDI-Momentum, which works closely with Boots in the highly competitive cosmetics sector.
“Space is always an issue with Boots. Cosmetics brands will be given a certain allocation of space, but it is not theirs forever. Allocated space is reviewed on a regular basis and product turnover is a very important consideration. But another consideration is what that brand provides in terms of marketing support. The supply of testers in this sector is very important,” she says.
Like most retailers, Boots is keen to make the shopping experience as easy as possible and, according to Whitmore, told cosmetics brands last year to reduce their range of products on display. She adds: “They had examined how people ‘shopped a unit’ and decided that cosmetics brands should increase the amount of information they had on a product rather than have a lot of products in every shade on display.”
Whitmore says: “Some brands were happy to do this”. If Boots was not able to force Unilever into an exclusive deal, it still had the power to dictate what brands it would stock – particularly cosmetics – and how it wanted it done.”
Green Room Retail director Richard Ash agrees that space will always be an issue. He says: “Retailers are so focused on profit per square foot. Whenever we are asked to enhance a fixture, it can’t be at the expense of stocktaking. Retailers are always looking at ways of increasing stock loading [the amount of stock held on shelves]”.
If the overall policy of retailers is to be more flexible towards PoP, the idea does not always make it to store level. There seems to be an ambivalent attitude towards PoP displays, which veers from insisting on a clear floor policy, to fitting in as much PoP material as possible on the store floor.
Ash says the policy works in cycles. He adds: “The store may start off welcoming PoP displays, but after a while the store starts to look cluttered and fragmented. The store manager decides his outlet looks like a bazaar and insists on a clear floor policy again. After a while the store might well discover that some categories are suffering because there is no in-store support.” And so the cycle repeats itself.
There is a remarkable amount of autonomy as well, particularly among grocery retailers, and individual store managers are being seen as increasingly powerful by PoP consultants. There is no guarantee that display material sent to a store will actually be assembled.
According to research conducted by Point-of-Purchase Advertising International (Popai), only half of some types of PoP material that is sent to a supermarket is ever assembled and placed in store. The research found that the most likely PoP material to be used is small and fits on shelves – where 80 per cent would be used. This still means that a significant 20 per cent is not being used at all.
Mandy Long, corporate marketing manager at PoP specialist Bezier, says that non-assembly of PoP display material is not always the retailer’s fault. “People may send in material that is the wrong size or they don’t ensure that the display has been authorised centrally. Sometimes the units are not robust enough. Sometimes, the PoP material gets lost in store because brand managers have put material in brown boxes that get either lost or thrown away,” she says.
One consultant said that brand managers don’t help by sometimes trying to get their display material in through the back door – by negotiating with individual stores rather than working centrally. This happens particularly when brands are being frustrated by a retailer’s overall floor policy. It also happens when some brands try to get away with not paying gate fees to have their material displayed.
But what retailers are really looking for from PoP consultants are not so much dazzling designs, as solutions that will promote entire categories rather than just one brand.
Humphreys says CTB tries to do as much of this as possible. He says: “We provide retailers with different category solutions. So, for instance, we may suggest linking cards and boxes of chocolates, or putting the videos together with cartons of Cadbury Heroes. If it works, it means increased basket spend at full margin.”
This is opposed to the Bogof (buy one get one free) option, which Humphreys says is a concept that would not suit the Cadbury brand. But it tends to be the resort of smaller brands that cannot rely on the support systems available to major products. He adds: “We have our own design studio and we are known for being one of the most effective off-shelf solution providers. Smaller suppliers are often forced to play the pure volume game with Bogofs.”
It is the ability of one brand to support and promote a whole category that interests retailers. Ash at Green Room Retail says that category leaders have cottoned on to this and are facing up to the challenge of providing material that promotes the category, rather than concentrate on one product.
Getting the right look
These brands and their PoP designers also face the challenge from retailers of making their stores look better, but not at the expense of stock loading. It might not always be possible.
Ash says: “There is a view in our industry that it would be better to enhance presentation and maybe lose a small amount of stock loading. For instance, there are a plethora of different breads in grocery stores. How are people supposed to know what all these products are? It might be better to remove one line of bread and replace it with an information panel. Stock holding is important, but our job as designers is to challenge the perception that stock holding takes precedence every time.”
Of course Asda remains the one exception among grocery retailers by allowing very little, if any, PoP material in store. With its concentration of Every Day Low Prices (EDLP) promotions, Asda’s view is that PoP material can confuse shoppers. It has also embarked on a programme of micro-marketing where its in-store promotions are geared around the individual store’s shopping markets.
Spectra Marketing is a division of consumer information organisation Claritas Europe and works with Asda full time, gathering and analysing customer data in each store. Spectra head of client services Suzy Carr says that Asda is concentrating on tailoring in-store messages and products to the specific shoppers in each area.
Spirit of co-operation
If this programme of micro-marketing was taken up by other grocery retailers, it would inevitably put a further squeeze on brands and PoP consultants who would find it prohibitively expensive designing and manufacturing individual programmes for individual stores.
But there does seem to be a spirit of co-operation emerging that exists between retailers and brands, and, according to Humphreys, there is a concentration on relationship building between the two sides. However, no matter how much co-operation is in place, it would be naive to forget that retailers ultimately call the shots.
Humphreys says: “We have to be a lot cuter about what we deliver now – and this pressure is coming from retailers. And if we are not willing to play the game, the product won’t be sited on shelf. Fortunately for us, we can sometimes play the Cadbury name – but there are other times when we have to bite our lips and accept what is given to us.”
For many smaller brands, that will be their only option.