Forests of PoP material confuse shoppers. Less waste and messages that fit the brand strategy will lead to far greater effectiveness and a bigger slice of marketing budgets, says David Benady
Retailers and brand owners across the UK spent some &£1.1bn last year on promotional marketing in stores, and they are likely to pay out similar sums in 2006, according to industry body Point of Purchase Advertising International UK and Ireland(PoPAI).
But as marketing funds are diverted from television advertising – seen as wasteful and ineffective – into store promotions, the point-of-purchase (PoP) industry is under pressure to show this investment is more efficient and cost effective than above-the-line advertising.
Paradoxically, the growth in PoP promotions is leading to the sort of clutter for which television advertising has been criticised.
Take this Christmas. Retailers unleashed an extravaganza of PoP promotions in stores as they cut prices in the face of intense competition from internet retailing and increasingly cost-conscious shoppers.
Forests of till wobblers
Savage discounting on the high street led to what one observer calls the most cluttered Christmas shopping environment he can remember. Throughout December, many stores became forests of till wobblers, window and column posters, header boards and shelf talkers. Research company Verdict calculates that average high street prices fell 1.5 per cent last year, and retailers have used promotional price cutting as a central plank in their marketing strategies.
This reliance on heavily promoted discounting is good news for those who print, design and create the PoP material that is plastered all over stores. But it is a double-edged sword for brand owners who fear that the promotion materials they pay for are getting lost among the clutter.
“This Christmas has to be the worst on record,” says Daniel Todaro, managing director of field marketing agency Gekko. “The stores were rammed with PoP material, I have never seen such a lot in major multiples, and it probably results in a huge amount of wastage. There is a finite amount of space available, so you can end up fighting with people in your own category,” he adds.
To make matters worse for brand owners, they often do not know whether the promotional material they have commissioned is placed in positions where it will have maximum impact. Placement is ultimately down to hard-pressed store managers, for whom it is not a high priority. Todaro says it is essential for brand owners to check that the materials are displayed in the best positions.
As in-store marketing activity grows, more data on its effectiveness is needed to provide insights into how to cut waste. According to PoPAI director general Martin Kingdon, purchasing departments are increasingly becoming involved in hiring and paying for PoP suppliers. They are demanding more information on effectiveness and value for money.
“The industry is getting rapidly more professional, and expertise among brands and retailers has gone up to a large degree. Because people have started to understand the level of budget that is going into PoP, it has started to move out of marketing into the purchasing department.” He thinks the increased professionalism in the sector is one of the best defences against inefficiency, and will be a powerful block on waste.
It should be pointed out that the &£1.1bn spent last year on PoP materials did not all go on short-term promotions and shelf wobblers. PoPAI’s figures reveal that under a quarter – about &£250m – was spent on permanent fixtures which are widely used to sell cosmetics, DIY goods and luxury products. Even so, the main area for keeping down costs is in tactical promotions using printed materials, and this is the area that suffers most from clutter.
Simplify your message
According to Nick Brand, creative director of PoP design agency Brand Design, retailers themselves would benefit by not having too much promotional clutter in their stores. “I would recommend that some retailers simplify their messages. You have got a couple of seconds to grab someone’s attention,” he says.
Others believe that the best way to get value for money is to ensure that messages fit in with an overall brand strategy. Kesslers International deputy chairman Charles Kessler notes that: “Merchandising and display are parts of the marketing mix, not just stand-alone items. Both work harder if used in conjunction with the rest of the marketing, not just as bolt-on items. It is incredible how often they are developed separately.”
Kessler sees spending on marketing in stores as a growth area over the coming year. He points to the decision by Heinz to cut its above-the-line advertising spending in favour of more in-store promotions, and Procter & Gamble’s steady reduction of television spending and its increase in in-store activity.
One development that threatens spending on PoP is in-store television – including floor screens – which is largely at the trial stage. Its proponents argue that it will prove to be more cost effective than traditional PoP material, because ads can be created centrally and beamed across hundreds of stores. It cuts out the need to have an army of field marketing staff putting up and policing physical materials.
However, it is also adding to the cluttered environment. Brand says electronic media will only work in relatively sparse environments – otherwise their messages will simply add to the confusion.
There are also questions about the efficiency of in-store electronic media. Before Christmas, Dixons announced that it was axing its in-store radio station.
Tesco is continuing to test in-store television with about 5,000 screens in 100 stores, but it is understood to be having problems selling slots for the medium to major brand owners.
The PoP industry claims that physical materials are more flexible and cost effective than electronic media: new print technology allows experimentation and “speed to market”.
This year the PoP industry must find ways of maximising its effect- iveness, if it is to take a greater share of marketing budgets.