Tesco has announced that it is soon to be cardboard free. The store claims that trials of Tesco TV show that advertising on the network generated “on average a ten per cent better performance for brand sales”.
Tesco is not the only multiple retailer to have put its faith in in-store television; Safeway has in-store TV in certain stores, as does Asda – although it is allowing manufacturers to reinforce their promotional message at point of sale with cardboard stands.
In the case of Tesco, in-store TV is yet another step in its overall aim of keeping its stores clean, clear and consistent. Tesco has a reputation for maintaining consistent and clear messages across its stores, so it is no surprise that it has gone the extra mile and vowed to rid its stores of point-of-purchase (PoP) material.
The introduction of in-store TV is indicative of the overwhelming power of retailers. Despite all the talk of retailers understanding the strength of the brand and putting consumers first, it is the retailer that comes first, brands tow the line, and consumers get what they are given.
No one is advocating the return of cluttered aisles and confusing amounts of PoP literature, but the introduction of in-store TV does appear to wipe out years of effort on the part of manufacturers to improve PoP material.
Bds beechwood managing director John Wood says: “Retailers have become much more powerful and it could be argued that they’ve become less reasonable. But that really depends on your definition of reasonable.
“Years ago, when retailers had less power, manufacturers were able to insist on their own PoP being used. This might have been good for the manufacturer, but was not necessarily good for the customer.
“We can all remember how cluttered stores used to be and just how confusing all the PoP was, particularly in major multiples. Although I support retailers having more power and believe they should drive the PoP in store, the pendulum has swung too far the other way and retailers now have a stranglehold on everything – which is bad.”
It could also be argued that the proliferation and often confusing nature of PoP material is partly the fault of retailers, who rarely, as far as manufacturers are concerned, present a consistent set of rules governing what will and will not be acceptable in individual stores.
Fraserdesign assistant managing director Craig Thatchersays: “The best laid plans drawn up by brand owners and the retailer at head office can still be undermined by store managers who have too much autonomy and can therefore alter the position and number of PoP displays in their own store without consulting head office. I have come across brand owners sending PoP displays direct to stores, perhaps without the knowledge of the retailer head office. This all adds to the confusion.”
Thatcher says it is the structure of large retailers that has a direct impact on the quality and effectiveness of PoP material.
“Big companies are organised into departments that often don’t talk to each other. And even within the marketing department there will be different groups responsible for the various media, each with different agencies. Often there is no one with ultimate control over the retail environment,” he says.
Wood adds: “Most retailers forget about the consumer and their in-store shopping experience, and don’t put the consumer first when it comes to designing and siting PoP material.
“Instead, a retailer’s various departments go off in different directions. One will be doing deals with buyers; marketing will be tying up third-party promotions and, while all that’s going on, the financial director – mindful of the sales figures – will be wanting the store to run more and more offers.”
So for those stores that will still allow PoP material (and there is some doubt about whether Tesco will be able to eradicate all traditional PoP), how can the material be designed and located to benefit both the customer and the retailer? Thatcher says: “In-store communications are all about the customer journey – speeding it up and making information readily available. You need to get the customer from the door to the right product or service as quickly and as easily as possible. This theory appears to fly in the face of the
commonly held view that customers should be controlled and herded around the entire store so that they are exposed to the full product offering. This can still work for some smaller retail outlets, but is nonsensical in larger, warehouse-style retail formats such as B&Q.”
There seems to be a lot of misconceptions about what does and does not work in PoP, as Danielle Pinnington, retail director at market research agency Incite Marketing Planning, found out after conducting research for a major health and beauty brand that wanted to develop a new approach to category management.
Pinnington says: “Everyone talks about situating material at eye-level but, depending on which store you are in, that could either mean the top shelf or one down or two down.
“We also discovered that when people are looking for something, they try to find what we call the beacon brand – one that they are familiar with but not necessarily the one the shopper wants. We then found that once this beacon brand has been identified, shoppers search vertically for what they want. They search up and down the shelves – not necessarily across them. This also means that the bottom shelf, which brands normally try to avoid, is not a bad place to be. If you are not the brand leader, it’s much better to be on the shelf below the leader than at the end of the shelf, which people are not likely to visit.
Keep your enemies close…
“The thinking also always used to be that it was best to be as far away from the brand leader as possible. But now we think that brands shouldn’t be afraid of being as close to their competitors as possible,” says Pinnington.
For a brand such as Carlsberg, the idea of not being able to produce any more “cardboard” must seem ridiculous. The brand is on course to produce 220 pieces of PoP this year alone – much of it specifically around Euro 2004.
Jonathan Harper, account director at Billington Cartmell, which handles the Carlsberg PoP business, agrees that stores have become more interested and knowledgeable about PoP, which he says has advantages and disadvantages.
“A few years ago, retailers would have taken anything and everything that a big brand such as Carlsberg produced. Now the retailers are more savvy and are saying what they will and won’t accept. You sometimes end up with a situation where you have to produce different material for different stores, depending on their rules,” he says.
Substance over style
Pinnington also believes that what the consumer wants from PoP has changed. “There used to be a lot of theatre around visuals and colours with PoP material. What seems more important to shoppers now is useful information about products and brands so that they can make informed choices. There is increasing activity around providing the shopper with information rather than visual excitement as part of the larger marketing strategy to have a conversation with the shopper.”
Which brings us back to the in-store TV concept. Not only could it alter the face of traditional PoP, but it also has implications for how agencies and their clients view the media mix.
Asda appears to be taking a more relaxed approach to its in-store TV concept by still allowing PoP material alongside brands. However, one source says that Asda retains the upper hand by stipulating that if brands advertise on its in-store TV, it will ensure 100 per cent compliance with any other activity in-store. This begs the question: what happens to those brands that don’t buy into in-store TV?
Ultimately, in-store activity has now become more difficult for manufacturers. Instead of having to think only of traditional point of sale activity, a new media element has been introduced. Pinnington says: “This makes any new product launch much more complicated as manufacturers will now have to develop different in-store activity for each retailer. All this involves different skills for both brands and agencies.”
The impact of new media in store has not been lost on the PoP sector. The industry body POPAI recently conducted a study on the new media facilities in Safeway to encourage its members to embrace the new medium.
What appears to be happening is that each time brands and their agencies develop new PoP skills and ideas to comply with retailers’ demands, retailers come up with something new for brands to deal with. At the moment it is in-store TV, which still has to prove itself over the long run. But what is already abundantly clear is that, when is comes to PoP decisions, the retailers, no matter how reasonable they seem, will always have the upper hand.