The 2016 POP Trends Survey - Path to Purchase Institute

INDUSTRY REPORT
PRESENTS:
The 2016 P-O-P Trends Survey
CPG merchandising executives weigh in on P-O-P
spending patterns, program management, tech innovation
and in-store merchandising’s future
Written by the Institute in collaboration with
EXECUTIVE
SUMMARY
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One in four respondents report that current and predicted P-O-P
spending levels will increase; half say they’ll stay the same.
If one needs a rule of thumb, respondents said P-O-P spending could
be allocated this way: 2/3 temporary, 1/3 permanent.
If no secondary display opportunity is available in-store, most
respondents will turn to digital path to purchase or e-commerce initiatives.
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When asked for the typical sales increase from a P-O-P initiative,
respondents estimated 19% for permanent and 24% for temporary.
Nearly 85% of respondents measure P-O-P effectiveness in some way,
with half saying they track sales specifically by chain or region.
Almost one out of five respondents say they’d prefer to work with one
“turnkey” P-O-P vendor.
Perceptions of the most effective store zones have shifted; some
traditionally desirable spaces – store entrances, lobbies and centerstore promo areas – are now considered less valuable.
One in five respondents say they’re experimenting with some form of
digital shopper-content delivery that’s integrated with in-store displays.
Two-thirds say these experiments have been “very effective.”
INDUSTRY REPORT
by Bill Schober
W
hen P-O-P Times magazine conducted its first
Trends Report back in 1993, most marketers
couldn’t be bothered to measure display performance, material costs were their biggest headaches, and
stores were packed with floorstands full of VHS tapes.
To say that in-store marketing has changed a lot over
the past 23 years is beyond an understatement.
As the charts on the following pages testify, P-O-P
practitioners face a world of changing technologies and
shifting performance expectations. To add a qualitative
aspect to our quantitative survey work, we assembled
a “virtual roundtable” of veteran CPG merchandising
executives and posed some of the survey’s questions directly to them.
One truism remains: In-store marketing still commands a central position within the path to purchase.
SPENDING
Over the past year, how did your
company’s P-O-P budget change?
Increased
24.4%
How do you predict your company’s
P-O-P budget will change for 2017?
Will increase
26.2%
Decreased
14.6%
Won’t change
59.5%
No change
61.0%
Average Increase: +16.1%
Average Decrease: -14.6%
Average Increase: +11.82%
Average Decrease: -9.17%
How is your company’s P-O-P
budget changing relative to the
money it spends on digital?
Increasing
relative to digital
30.0%
Will
decrease
14.3%
How is your company’s P-O-P budget
changing relative to the money it
spends on traditional advertising?
Decreasing
relative to
digital
32.5%
Staying the same
37.5%
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
Increasing
relative to
advertising
12.2%
Decreasing
relative to
advertising
24.4%
Staying the same
63.4%
INSTITUTE ANALYSIS: While much has changed over our 23 years of industry
survey work, P-O-P spending patterns have not. Except for recession years, one
in four merchandising executives typically report that both current and predicted
P-O-P spending levels will increase while approximately half report that they’ll stay
the same.
Probably more notable is the indication that significant in-store display budget
dollars are being redirected toward digital. That is in line with the observation that
many leading-edge P-O-P practitioners are beginning to integrate digital into their
display work.
The data shown for spending relative to traditional advertising should be taken
with a grain of salt as many respondents said they do not have access to their company’s above-the-line spending data.
2
Has your company’s P-O-P
budgeting changed in recent
years?
STEVEN HECHT: I concentrate on
permanent and semi-permanent
merchandising where I have not
seen any restrictions on spend. If
the ROI is there, the spend is validated. I give our marketing people
options and they decide how many
they are executing.
Very often suppliers will ask me
if I have a budget, and sometimes I
don’t. But I know from experience
how much things should cost.
BOB MYERS: Budgets have continued to go up for us year-over-year.
They’re primarily going up because
we continue to go after different
markets: e-commerce, natural and
organic, drug or discount, for example. We’ll look at our toolbox
and pull out a new capability that
we can use to go in and sell them.
We are increasing our budget again
this year to support some of those
strategy changes around the tactics
of merchandising in-store.
MAUREEN MARRONE: Our P-O-P
budget is getting larger because we’re
trying to gain more control over how
our selling environment looks in the
retail store.
We are putting more money into
digital than we ever have before.
Not a ton, but it definitely has increased and it gets incorporated
into our merchandising budget as
we try to figure out what’s best. Although sometimes I think that digital may be a little bit overrated for
what we sell.
ALLOCATION
How do you allocate your
P-O-P display spending?
Temporary/promotional
60.3%
Do you plan to shift your P-O-P
spending by type of display?
If a secondary display opportunity
isn’t available, and we can do only
one, we’ll put more effort into:
Yes, by using
more signage
13.9%
Yes, shifting
from temporary
to permanent
16.7%
Permanent/ongoing
39.7%
Display
packaging
25.7%
Not shifting
our spend
69.4%
Note: “Shift from permanent to temporary”
was asked but received no mentions.
Digital initiatives
34.3%
Primary packaging
(label, bottle,
can, etc.)
2.9%
E-commerce
20.0%
Print in-store media
(coupon dispensers,
floor graphics, etc.)
11.4%
Electronic in-store media
(digital signs, TV networks, etc.)
5.7%
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: Obviously, the ratio of temporary-topermanent display allocation will vary significantly by company, brand and even event to event. The first chart (above, left)
therefore should be viewed as merely providing a rough rule
of thumb for P-O-P spend: 2/3 temporary, 1/3 permanent. And
maybe more of a “guesstimate” than a rule.
Of more interest will be the “forced choice” chart (above,
right). If we hypothetically prohibit your brand from having any
BILL SMITH: It’s more about how it’s being spent as op-
posed to the total dollars. Everybody’s cost per display
has gone up because everybody is having to spend more
on customization than they did before.
What’s the single most important reason for using
P-O-P in your category?
RANDALL RODRIGUEZ: To bring our brands to life in
secondary display opportunities in-store, marketers say that
they’d either amp up initiatives along the digital path to purchase or redirect that spending toward e-commerce.
When a version of this “No Secondary Display Allowed”
question was asked 10 years ago, more than half of our
respondents said they’d first throw all of that effort into their
primary packaging.
Today, virtually no one would.
store; we want to match the “mental availability” we create through advertising with physical availability. We
want a world-class in-store experience that breaks down
the barriers of “Don’t think of your product” or “Can’t
find your product.”
RICK STRINGER: For us, it’s introducing the consumer
to a new product and driving conversion. Creating aisle
ambience through semi-perm and perm to help with
OUR VIRTUAL ROUNDTABLE
Steve Hecht, Senior Manager of Visual Merchandising Design,
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Johnson & Johnson Consumer
Bob Myers, Director, In-Store Design Team, General Mills
Maureen Marrone, Director of Visual Merchandising,
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Hunter-Douglas
Bill Smith, Principal, Display Coach LLC / 1996 Hall Of Fame Inductee
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With P&G
Randall Rodriguez, Senior Merchandising Manager, Mars Chocolate
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North America
Rick Stringer, Vice President of Customer Solutions, Crayola
Jill Andersen, Director of Marketing, Menasha
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SURVEY METHODOLOGY
In June 2016, several hundred U.S.-based CPG merchandising executives were emailed a questionnaire to be
completed online.
The names were drawn from Shopper Marketing
magazine subscription and Path to Purchase Institute
membership lists, with an emphasis on those with director,
manager and vice president titles.
From those emails, 63 CPG marketing executives submitted full or partially completed surveys. Each respondent
was entered into a drawing for an Amazon Echo device.
The data was compiled and cross-tabulated by Irwin Broh
& Associates, Des Plaines, IL.
3
INDUSTRY REPORT
WHY USE P-O-P
In your category, what is the single
most important reason for doing P-O-P?
Permanent displays:
Short-term
sales lift
30.0%
New product
introduction
23.3%
How do you measure
P-O-P effectiveness?
How much do typical P-O-P
programs increase sales?
Temporary displays:
19.0%
Track sales specifically
(i.e., by region, chain, time period)
23.8%
Track sales generally
(i.e., overall sales increase)
47.2%
Compile feedback from field staff
Activate a
Brand building promotional
26.7%
message at retail
20.0%
Track retailer acceptance/reorders
Never/rarely measure
10
20
30
27.8%
16.7%
13.9%
Note: “Provide legal cover for retailer payments (slotting fees)”
was asked but received no mentions.
0
52.8%
40
50
60
Note: “Measure via technology (i.e., sensors) that deliver
content to shoppers while in purchase mode” was asked
but received no mentions.
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: The “Why Use P-O-P” chart (above,
left) is another forced-choice question; truth be told, any of
the four options are probably equally correct.
However, as the chart on page six confirms, traditionally
product marketers say that P-O-P is most essential (and
retailers are most receptive, as well) when it supports a new
product launch.
One respondent, in fact, posted this comment anonymously:
“The marketing folks and account teams usually come to me
and say, ‘We need this and we have $100,000 to spend. What
can you do with it?’ But other times, they’ll just say, ‘We’re doing a launch’ – and then I don’t even hear about a budget.”
wayfinding and navigation is pretty important as well.
In a multi-segmented category, P-O-P can be very helpful in improving shoppability.
Another area where P-O-P is really impactful is with
co-branding and co-promotion where you can make
merchandising assets work harder. You may have two
brands that may not turn enough to warrant an entire
endcap on their own, but together can provide a shopper
solution and work economically for the retailer. That’s
really powerful. No one wants to exit a merchandising
event with heavy inventory.
MARRONE: To communicate the breadth of our product
line. We have 26 different products and each one has
myriad options, fabrics, colors, etc.
MYERS: Shopper connectivity and building our brands.
Has your rationale for using P-O-P changed
in recent years, and where do you see things
heading?
STRINGER: The rationale hasn’t changed but the ap-
proach has probably become more simplified, both from
4
While we asked for an estimated sales bump (above, middle)
from a typical P-O-P initiative, we recognize that no program,
product or brand is ever really typical. So use those figures
judiciously and don’t bet the kids’ college fund on them coming through every time.
BTW: If you don’t like the answers to our sales bump chart
(above, middle), be aware that we asked the same question in a
slightly different way:
“Generally, for every $1 invested in in-store marketing, our
company generates at least $____ in incremental sales.”
The median answer: $2.50. Again, feel free to use this but
do so judiciously.
a costing standpoint but also in trying to simplify the
messaging to the shopper. There’s so much to engage
shoppers in terms of what they see in the store and what
they’re looking at on their screens. Sometimes just a bigger, bolder message is easier to drive that capture. So
P-O-P is still a big focus of what we’re doing.
HECHT: I’ve been doing more permanent executions
than corrugated, and I see it heading toward more of
a holistic approach that incorporates technology and
media. We’re trying to do 360° executions where everything links together – a smartphone interacting with displays, for example. That sort of a thing.
MARRONE: We do mostly permanent, and the rationale
behind that has not changed. But for signage and non-permanent P-O-P, our rationale lately is less is more. We want
to create things that are more substantial and sophisticated. We don’t want to overload the store with tchotchkes.
MYERS: Our rationale has not changed. Displays are
not a strategy; displays are a tactic by which we support
our in-store objectives to deliver against an overarching
strategy of a brand or a go-to-market.
When we were trying
to grow distribution in
“Things might change with smart
c-stores, it wasn’t about
displays, but you’ll still need the
merchandising; it was
P-O-P vehicle there. I can’t imagine
about using the units to get
the items into the c-store.
it’s ever going to go away.”
We’d build a baseline of
sell and basket ring for the
Steve Hecht, Senior Manager of Visual Merchandising
Design, Johnson & Johnson Consumer
retailer, move less-profitable SKUs off the shelf, and
put General Mills items on
focus on: speed, cost and innovation. We’re willing to
the shelf. Merchandising was the mechanism.
SMITH: People are becoming more aware that shoppers pay more if it’s innovative and will drive business. But
have a lot of ways to engage with the things they want we’re also looking at speed-to-market. You can bring us
to buy, whether on the phone, on the internet or in-store. a great item, but if it takes three months to make, it falls
With all of these triggers, the need to have a consistent outside our framework of 7, 14 and 21 days. Speed-tomarket, cost and innovation.
message across the board is more critical than ever.
But you need to get things right on the primary shelf JILL ANDERSEN: While it’s nice that we’re on a lot of
first. That doesn’t mean you can’t boost sales with a dis- retailers’ “approved vendor” lists, you still have to earn
play, but your primary area is where people are going to it every day. And that comes down to a team that understands internal processes and can manage a project
be buying 80-90% of the time.
all the way through a retailer’s system to speed development, approvals and execution.
Which qualities do you find to be most important
HECHT: Being honest and responsive. Cost is always a
in a P-O-P producer?
MYERS: There are three pillars that we and our partners big consideration because we’re a big company, and when
PICKING A VENDOR
What factors do you use to select a full-service P-O-P producer?
1: “Producer offers best design/quality”
2: “We have an existing relationship with P-O-P producer”
When selecting a P-O-P vendor, does
your company prefer to work with:
Just one
turnkey*
supplier
18.5%
3: “Producer offers lowest cost”
4: “Producer offers fastest service”
Four or more
suppliers
25.9%
Two or three
suppliers
55.6%
5: “Producer is suggested by retailer”
*Turnkey suppliers offer a range of services from displays,
graphic packaging and signage to assembly, pack-out
and distribution. INSTITUTE ANALYSIS: The answers to our “How do you Pick
Vendors” questions have always varied greatly; it all depends
on which side of the table is being asked.
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
CPG marketers usually opt for “Design/Quality” (as seen in
the chart, above, left). Had we asked P-O-P producers, however,
it’s likely they would’ve claimed that “Lowest Cost” is a much
bigger factor than their clients are willing to admit.
The factor “Suggested by a Retailer” trailed the other four
options by a fairly significant margin, indicating that chains
today don’t exactly have a mandate in this area.
If the chart (above, left) is to be believed, familiarity may
actually breed loyalty. “An Existing Relationship” was the
second-highest-rated factor in vendor selection.
Turning to the vendor preference chart (above, right) we
see that most merchandising executives prefer to work off
of a short list of two or three vendors or rely on one turnkey
supplier. This is a far cry from 20 years ago when it was
almost customary to see every project start with a dozen or
more vendors thrown into a brutal price shootout run by the
purchasing department. That’s because typically, the first
things shot in a shootout were design flair and engineering
quality.
5
INDUSTRY REPORT
RETAILER RELATIONS
Which store zone is most effective
for driving sales with your
P-O-P?
Whichvendor-supplied
store zone is most
effective
for driving sales with your
vendor-supplied P-O-P?
How do you conduct
How do you conduct
compliance audits?
On the
perimeter
22.2%
On the
End of aisles
37.0%
Permanent displays
Temporary/corrugated displays
Reports from
force/personnel 3rd-party
51.9%
merchandiser
Reports from
25.9%
3rd-party
Within aisles
14.8%
Checkouts
14.7%
Checkouts
Center
14.7%
store/promo Lobby/entrance
3.9%
7.4%
Center
store/promo Lobby/entrance
3.9%
7.4%
86.5%
Reports from sales
force/personnel
51.9%
Reports
from sales
perimeter
22.2%
Within aisles
14.8%
End of aisles
37.0%
What percentage of the displays
your company sends out do you
believe
actually of
setthe
updisplays
in stores?
What are
percentage
your company sends out do you
Permanent
believe
are displays
actually set up in stores?
RETAILER
RELATIONS
compliance
audits?
merchandiser
25.9%
We don’t/rarely Mobile/crowd-sourcing*
audit
service
11.1%
11.1%
We don’t/rarely Mobile/crowd-sourcing*
*For
example, Field Agent, Quri,
Gigwalk, etc.
audit
service
11.1%
11.1%
86.5%
78.4%
Temporary/corrugated displays
Signs
0
Signs
0
78.4%
73.3%
10
20
30
40
50
10
20
30
40
50
60
73.3%
60
example, Field Agent, Quri, Gigwalk, etc.
Which factors are most important in affecting*For
a retailer’s
Are the following chains accepting fewer
decision to accept vendor-supplied P-O-P?
or more displays than in the past?
Fewer
Same
New
product
introduction
Which factors are most important in affecting a retailer’s
Are the following
chains accepting
fewerMore
56.7%
decision to accept vendor-supplied P-O-P?
more displays
27.3% than in the past?
54.5%
Kroger or18.2%
Customized
their stores
New productfor
introduction
46.7%
56.7%
Coordination
with
seasonal
Customized for
their
stores events
Additional
price
reductions
Coordination
with
seasonal events
Construction/materials
Additional price reductions
Cross-promotion
with other products
Construction/materials
Fees
provided forwith
placement
Cross-promotion
other products
Collateral
(signs,
cards, etc.)
Fees provided
forprice
placement
Manufacturer/third-party
setup
Collateral (signs, price cards,
etc.)
Size/weight
Manufacturer/third-party setup
0
Size/weight
10
0
10
Same
More
11.1%
18.2%
36.7%
46.7%
Walmart
Albertsons
11.1%
33.3%
36.7%
Target
Walmart
23.3%
33.3%
Meijer
Target
7.1%
18.8%
64.3%
50.0%
28.6%
31.3%
16.7%
23.3%
Costco
Meijer
8.3%
7.1%
66.7%
64.3%
25.0%
28.6%
16.7%
16.7%
Walgreens
Costco
18.2%
8.3%
63.6%
66.7%
13.3%
16.7%
Ahold
Walgreens
11.1%
18.2%
77.8%
63.6%
10.0%
13.3%
CVS
Ahold
11.1% 36.4%
77.8%
3.3%
10.0%
Sam’s Club
CVS
14.3% 36.4%
44.1%
27.3%
44.4%
54.5%
45.0%44.1%
18.8% 45.0%
15.0%
40.0%
44.4%
50.0%15.0%
31.3%
40.0%
18.2%
25.0%
11.1%
18.2%
54.5%
9.1%
11.1%
78.6% 54.5%
7.1%
9.1%
20
30
40
50
3.3%
60
Sam’s Club
20
30
40
50
60
How receptive are the following chains to
new
orpast
unusual
P-O-P
ideas?
Another break
from
practice
is that
it is becoming
Veryfor
Receptive
Not
Receptive
almost routine
(top, middle)
CPG
marketers
to
conduct
How receptive
are
the
following
chains
to
some kind of compliance
auditing.
The compliance
percentnew
or
unusual
P-O-P
ideas?
100%
Albertsons
How well do these chains perform in terms of chain-wide
executionANALYSIS:
of programs
they accept
atmost
corporate?
INSTITUTE
Perceptions
of the
effective
Excellent/Good
Average
Poor/Awful
store
zones
left)
have shifted
significantly
over
the past
How
well
do (top,
these
chains
perform
in terms of
chain-wide
10-15
years. This
is probablythey
due to
advances
in technology
execution
of
programs
accept
at
corporate?
70%
20%
10%
Costco
(cart tracking, etc.) and increased use of research methods
Excellent/Good
Average
Poor/Awful
such as shopalongs. What’s most notable here is how low66.7%
33.3%
Sam’s
Club
rated
some traditionally desirable
spaces – store20%
entrances,
70%
10%
Costco
lobbies and center-store promotional areas – have become.
44.4%66.7%
55.6%33.3%
Kroger
Sam’s Club
6
Fewer
Albertsons
Kroger
Target
Kroger
42.9%
44.4%
Meijer
41.7%
42.9%
55.6%
50%
0 14.3%
25
50
78.6%
75
100
7.1%
0
25
50
75
100
ages (“actually set up”) reported in the chart (top, right) may be
Very Receptive
Not Receptive
more aspirational than actual, however. According to some
80%
20%
Kroger
recent research conducted by POPAI,
100%“properly” executed
Albertsons
levels may be closer to the 40%-60% range.
62.5% 80%
37.5% 20%
Target
Kroger
14.3%
Meijer
Target
8.3%
Costco
61.5%
62.5%
54.5%
38.5%
37.5%
45.5%
14.8%
Signs
merchandiser
25.9%
73.3%
Checkouts
14.7%
0
10
20
30
40
50
60
Center
we’re
quoting out things it does comes down to cost. But What do you think of working with just one turnkey
store/promo
P-O-P supplier?
when
I personally
am working, I want folks
who do not
We don’t/rarely
Mobile/crowd-sourcing*
Lobby/entrance
3.9%
The advantage of working with one turnaudit gotten RODRIGUEZ:
service
7.4%
make
me keep hounding
them to see if they’ve
key11.1%
supplier is consistency in quality and value delivmy emails. That’s the most annoying thing. 11.1%
*For example,
Quri, Gigwalk,
Thisetc.allows you to have a partner rather than a
I’ve had to have talks with people’s bosses:
they Field
getAgent,ered.
the initial order, and then they disappear and I can’t get supplier, and one that is invested in your mutual success.
MARRONE: When you work with one turnkey vendor,
a response!
Which factors are most important in affecting a retailer’s
Are the following chains accepting fewer
MARRONE: The qualities I find very important are they get to know you, there’s little learning curve and
decision to accept vendor-supplied P-O-P?
or more displays than in the past?
is expedited
more efficiently.
Basihonesty,
goodintroduction
turnaround and the latest in packaging account management
Fewer
Same
More
New product
technology and manufacturing processes. Cost is not
the cally, they react to requests and issues more quickly.
56.7%
18.2%
54.5%
Kroger
The
disadvantage
to27.3%
that is that things
can become
most
important
thing.
Customized
for their
stores
and you’re affected by their internal issues.
46.7%
STRINGER: We deal with vendors that help us with
de- complacent,
44.1%
44.4%
Albertsons 11.1%
sign
work. We
also
purchase
Coordination
with
seasonal
eventsour corrugate from them: If they go out of business or fall out with their freight
36.7%
ship your stuff,
risk. I don’t
they cut it, stack it and ship it to us; we then build it,
and company
15.0%you’re at40.0%
Walmartand can’t45.0%
price reductions
believe in putting all my eggs in one basket.
doAdditional
the pack-out
and shipping pretty much all in-house.
33.3%
50.0%
31.3%
Target 18.8%
We want a vendor to take the time to understand the
obConstruction/materials
jectives we’re trying to achieve from a shelf-back or shop- The more traditional way is to manage a stable of
23.3%
7.1% – what are
64.3%
28.6%
Meijer
vendors
your views on that?
per standpoint, as well as the way we and our cross-func- P-O-P
Cross-promotion with other products
tional partners operate. That type of intimate knowledge
is STRINGER: We don’t have a large stable of providers, but
16.7%
66.7%
25.0%
Costco 8.3%
absolutely critical. And all of that then flows into the design we have a couple. We like that model because you have
Fees provided for placement
but you’re also getting
work, which is the biggest thing. That’s a big, big deal.
16.7% contingencies,
63.6% fresh thinking
18.2%and
Walgreens 18.2%
Collateral (signs, price cards, etc.)
13.3%
INSTITUTE ANALYSIS: A caveat is in order here. The charts
Manufacturer/third-party
setup
gauging how well individual chains do or don’t perform on
10.0%
certain tasks (opposite page and below, left & right) are included
Size/weight
here merely as “indicator” research. Our survey respon3.3%
dents don’t always have comprehensive, chain-by-chain
knowledge, some may answer based on a perception, and
0 sometimes
10 the most
20 knowledgeable
30
40
50 shy away
60
respondents
from answering altogether. We’d suggest using these charts
How well do these chains perform in terms of chain-wide
execution of programs they accept at corporate?
Excellent/Good
Costco
Average
How receptive are the following chains to
new or unusual P-O-P ideas?
Poor/Awful
70%
Sam’s Club
77.8%
11.1%
Ahold 11.1%
as conversation starters with your team members to see if
there areCVS
any problem
areas to be addressed
or opportunities
36.4%
54.5%
9.1%
being missed.
The “receptivity” chart (below, right) is a good example:
78.6%
7.1%
Sam’s Club 14.3%
Albertsons may indeed be more open to “new or unusual”
ideas as its management has been shifting in recent years;
0 also just reflect
25
50that Albertsons
75
this rating may
the fact
tends 100
to accept a lot of displays in general.
20%
66.7%
Very Receptive
10%
44.4%
Target
42.9%
42.9%
Meijer
41.7%
50%
37.5%
14.3%
Meijer
61.5%
38.5%
8.3%
Costco
44.4%
22.2%
Walgreens
CVS
33.3%
44.4%
22.2%
Albertsons
64.7%
14.3%
71.4%
Ahold
25
50
54.5%
55.6%
CVS
40%
60%
11.8%
Walmart
36.8%
63.2%
14.3%
Sam’s Club
23.1%
0
75
45.5%
44.4%
100%
0
20%
62.5%
33.3%
23.5%
80%
Target
55.6%
Walgreens
Walmart
100%
Kroger
33.3%
Kroger
Albertsons
Not Receptive
76.9%
25
50
75
100
100
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
7
INDUSTRY REPORT
DAMAGE
Where in the supply chain do you encounter
the most damage to your P-O-P?
At the store level
52.2%
In transit
39.1%
At the DC
8.7%
INSTITUTE ANALYSIS: There have been anecdotal
reports of more damage occurring to P-O-P displays out
in the field in recent years. There’s little in the way on consensus about where it may be happening other than the
fact that distribution centers seem to be off the hook.
When we asked survey respondents at which chain the
Source:
P2PI.org/Shopper
Marketing P-O-P
Trends Survey
2016)most
most
damage
is encountered,
Walmart
was (June
named
often, and by a large margin. However, this may simply be
a function or byproduct of its massive scale and reach.
Other chains mentioned briefly: Albertsons (Safeway),
Best Buy, Costco, Food Lion (Delhaize), Home Depot,
Publix and “the dollar stores.”
For semi-perm and perm, I use competitive pricing.
We design it internally, so we own the IP, and then send
it out for pricing and prototyping. I can then compare
and they all know they are competing so the prices tend
to be competitive. It keeps everyone on their best game
and I also learn, over time, who is good with what types
of execution.
SMITH: Personally, I felt it was always helpful to have a
stable of vendors. The balance we always tried to achieve
[at P&G] was to find enough single-sourcing for a campaign. Give each vendor three or four campaigns each,
because displays might have different qualities and different vendors are better suited for different things.
There were big launches when we’d give two or three
guys a chance because we were talking $2 million-plus
campaigns. But I didn’t like to bid stuff out to save
$10,000 on a $50,000 project because you really wouldn’t
save that much.
Look, the P-O-P business isn’t rocket science, but it
becomes difficult because we have to please shoppers,
retailers and a lot of marketing, sales, finance and purchasing people. It’s the number of people involved that
makes it so hard.
If you could change one thing about P-O-P
producers, what would it be?
HECHT: Get out of the 1980s sales mode. That’s the
a couple of agencies to pull from. We feel it keeps everyone on their toes while enabling everyone to do enough
to invest in our business.
RODRIGUEZ: Managing a stable of P-O-P vendors allows you to choose the best company for each specific
project and produce a better cost structure. If you have a
robust set of internal resources, this model can help you
excel as it drives competition.
MARRONE: You also get competitive pricing because
they know they’re not the only fish in the sea.
HECHT: We operate with both of these models: turnkey
and a stable of vendors. For corrugated, we just use two
or three suppliers; that’s it, and each supplier works on
different franchises (although the prices have been going
up and up).
worst. Older guys who come out with a big sales talk and
no substance to it. We joke about it, and sometimes I just
cringe when I get those calls: “We’ll take care of it all!” I
get the same presentation every time – it’s horrible.
MARRONE: My biggest request for any P-O-P producer
would be to have one person on their end manage my
account: design, production, inventory, shipping, issues
that come up, maintenance problems, repairs and ongoing maintenance.
Be proactive. Come up with new ways to do the same
old thing. If you have one person dedicated to you – and
I’ve experienced both – it works so much better.
STRINGER: I’ve had really good experiences. We do most
of this stuff in-house, and I work with a lot of the creatives
upstream. It’s very thought-provoking. I guess the key
is truly understanding what
works for the [retailer] custom“We want to create things that
er and how they’re all different.
It’s important to understand the
are more substantial and
different aesthetics that play in
sophisticated. We don’t want
different customers.
to overload the store with
SMITH: I used to tell our suppliers, “If I know more than
tchotchkes.”
you do, we have a big probMaureen Marrone, Director of Visual Merchandising,
lem.” I may not need them to
Hunter-Douglas
understand the sophistication
8
of the shopper as much – that requires CPG marketing
research – but they’d better be very familiar with the
requirements at Walmart, Target and Walgreens... and
then go from there.
We’re hearing that brands seem to be
encountering more damage to their P-O-P displays
than in years past? Is that your experience?
MARRONE: We’ve always experienced it, but I have not
seen a recent increase. Since they are permanent displays,
some go on a dedicated truck and are handled with kid
gloves – almost like furniture. But with other systems
we have, we'll go with a common carrier, and if I had to
guess, I would think it happens in transit. Generally, if it
arrives at the retailer in good shape, it stays in good shape.
ANDERSEN: It means that design teams have to be extra
thoughtful these days and account for factors such as duration, level of customer interaction, floor maintenance,
heat/humidity and intended uses. We were asked recently to design a Walgreens wine & spirits program around
a corrugate display that could support the weight of the
product for four months. Engineering came up with a
unique clip structure to handle that kind of sustained
load; design elevated the bottom of the display and specified a special coating so that floor maintenance wouldn’t
impact the integrity of the display. Details matter.
MYERS: We’re not experiencing that, but a lot of it is
built upon our excellent supply chain capabilities. We
have end-to-end touches that ensure we’ll have good
quality on the front end and all the way until it hits the
retail floor.
RODRIGUEZ: We have not experienced that, but we do
constantly look to reinforce packaging materials to ensure we minimize in-transit damages.
STRINGER: No, I haven’t and we track that. We’ve
done a lot of work around continuous improvement as it
makes its way through the supply chain, from our truck
to the customer’s DC and to the store. It’s one area where
I think Crayola has done a pretty good job.
SMITH: There could be an issue because as retailers have
had to cut back on labor, there’s a lot of turnover in that
area. You have to be clever in your designs and account for
TECHNOLOGY
Have you integrated any of your
in-store displays with technology
(i.e., sensors) that delivers content to
shoppers while in purchase mode?
Yes
21.4%
How effective was this
content-delivery technology
at increasing sales?
Very effective
66.7%
No
78.6%
What was your primary
objective for doing this
technology integration?
Product education
66%
Somewhat
effective
33.3%
To increase
sales in the
short term
18%
To reach consumers with
out-of-home messaging
16%
Note: “To satisfy a retailer mandate” was asked but
received no mentions.
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: Welcome to the future of P-O-P. This
question was asked in a way that was both broad (“technology,” “sensors,” etc.) and specific (“in-store display,” “shopper in purchase mode”) to tease out some huge possibilities:
What’s the potential for one-to-one messaging between a
CPG brand and a chain’s shopper inside the brick-and-mortar
environment?
This area is in its early stages of development and merits
an in-depth research effort of its own. But here are some
preliminary findings that should raise a few eyebrows:
• One in five of our respondents said they were already
experimenting with some form of shopper-content delivery
in-store.
• Two-thirds said that their experiments could be rated as
“very effective” from a sales building perspective.
• The broader purpose behind the experiments, however,
seems to be “product education.” This is significant, as it
means that brands are starting to view in-store displays in
an omnichannel marketing context rather than merely as a
sales-closing opportunity. Stay tuned.
9
INDUSTRY REPORT
pending on who’s approaching the display. That’s the only
“We want a world-class
thing that I can think of that
in-store experience that
would be game changing.
STRINGER: Probably the most
breaks down the barriers of
impactful will be geo-targeting
‘Don’t think of your product.’”
via smartphones and understanding where shoppers are
Randall Rodriguez, Senior Merchandising Manager,
Mars Chocolate North America
in-store to understand behavior patterns and then communicating with them. I think
that; never assume that things will be handled correctly.
we’re going to get there sooner than we think; maybe
And let’s face it: when CPG purchasing people are un- the next five to 10 years.
der pressure to lower costs, sometimes they put pressure
What’ll be interesting is where the shoppers go and
on suppliers to see if they can get by with lower-weight who do they trust? Do they build it through a retailer
materials. That’s always penny-wise, pound-foolish.
like Target has done with Cartwheel? Do they have other third-party sources they trust?
Does damage seem to more of an issue in any
SMITH: You’re going to see a lot more digital content and
particular channels?
solutions simply because retailers are trying to manage
SMITH: If I am worried about damage, I’d look first at their costs. Labor is two-thirds of operating cost.
the drug, convenience and dollar channels simply be- MYERS: The dynamics of our markets and our cuscause they turn fewer units. In these channels, they tomers are changing, so it’s really all about being agile
don’t have loading docks, they can’t move things in-store and supplying something that goes beyond the stanon pallets because of floor space, and they have weight dard toolbox of offerings. Take brick-and-mortar and elimitations, so sometimes you have to ship two or three commerce, for example. Can you tie it all together with
things together. From a handling standpoint, when you solutions in-store and with connectivity to the shopper
ship things out in smaller numbers, they are putting up whether at home, pre-store or in-store?
things in individual pieces as opposed to a whole case.
There are now multiple things that will help us do that.
The more individual handling that’s involved means It’s how do you print-on-demand, for example, and remore potential for damage.
gionalize things all the way down to the customer. Most
CPGs have a requirement with customers about taking a
Are there any in-store display technologies that
minimum of 50 shippers. Well, the model really should
you find provocative?
be about giving them 50 shippers, but five of them will be
ANDERSEN: The greatest benefit identified by our re- customized in Spanish for the Miami market, which has
tail and CPG partners has been the ability to track the a high population of Hispanics, another five in a different
presence of their displays throughout the promotional market, and so on throughout the country.
supply chain. Now they not only have the ability to see
exactly when their display hits the store floor, they can Are the chains asking you to experiment this way?
also measure its performance. They also come to under- MYERS: No, the retailers aren’t making us do this; it’s
stand the size of the lost opportunity when a display is a capability we’re offering them. Yes, it’s driving increnot timed properly with promotional campaign media.
mental sales, but here’s what it’s really doing: We all talk
RODRIGUEZ: I’m intrigued by solutions that place a about the importance of connecting the perimeter of the
camera on your display
to measure how and for
how long shoppers interact
“P-O-P is really impactful with
with your displays while
co-promotion to make assets
safeguarding privacy conwork harder. No one wants to
cerns. These are potentially game changing.
exit a merchandising event with
HECHT: Targeted marketheavy inventory.”
ing by gender recognition.
Changing your message to
Rick Stringer, Vice President of Customer Solutions, Crayola
target the consumer, de10
ADMIRE
Whose merchandising do you admire most?
1: Procter & Gamble
2: Coca-Cola
3: Anheuser-Busch InBev
4: Hershey
5: (tie) Colgate, Johnson & Johnson, Samsung, Nike, L’Oreal,
Mars/M&M’s, General Mills
Source: P2PI.org/Shopper
MarketingHaving
P-O-P Trends
Survey
(June 2016)
INSTITUTE
ANALYSIS:
a big
P-O-P
footprint means you tend
to get noticed. But if you can execute consistently with high-quality
merchandising vehicles, you tend to be admired.
store to the center store, but we have no mechanisms to
help the retailer accomplish that. So by drilling down
to store-level customization, you’re able to tap into their
community and/or regional strategy of merchandising.
You’re able to overlay and build a stronger plan for them.
Have you experimented with smart displays and
in-store sensors that deliver digital content to
shoppers while they’re in purchase mode?
RODRIGUEZ: Yes. It allows consumers to interact with
our products in a way that truly captures the essence of
our brands.
STRINGER: Not yet. The closest we’ve come is through
Cartwheel. That has been a good experience. It just
helps us drive a trip to the aisle.
HECHT: None as of yet. We do skin analysis for sun
care, but that’s not really a “smart” display. I’ve worked
on LCD touchscreens, but that doesn’t really qualify,
does it? I’ve seen demos on that kind of stuff, but we
haven’t incorporated it yet.
Where’s the market headed in 2017?
MYERS: We know that footprints are shrinking in-store
and we need to bring them different solutions. We keep
talking about challenges in the center store but have not
done anything as radical as what pet food has done in
their category. Bread did it; coffee and the beverage industry have done it too, but it’s been stagnant within
primary foods categories. I think that’s our new green
field site. That’s where we can build something very different and tie it into the total store.
RODRIGUEZ: As we look ahead, we hope to create additional points of disruption and connections to brand experiences that leverage digital content and social media.
HECHT: Nothing but sky! Even when Walmart tried
their clean store, they had to bring merchandising
back eventually. It’s nice to have it somewhat clean in
the aisles, but P-O-P will not go away. Things might
change with smart displays, but you’ll still need the
P-O-P vehicle there. I can’t imagine it’s ever going to
go away. n
11
About Menasha
Menasha is North America’s largest independent packaging and merchandising
company focused on optimizing the retail supply chain. As market leaders within the instore merchandising industry, Menasha combines an unmatched understanding of the
retail sector with a proven methodology for developing efficient, sustainable offerings to
meet customer specific goals.
With a network of over 50 locations that include design centers, manufacturing plants,
contract packaging and pack-out and fulfillment service centers, it is our mission to
integrate the merchandising strategies of retailers & CPGs. Our solutions are backed
by an experienced team of 100+ designers, over 70 project managers, and dedicated
account directors who utilize our proprietary merchandising model, retail audit and
promotional planning tools to provide innovative solutions that allow our customers to
win on and off the shelf.
Menasha continuously invests in the most efficient technologies and capabilities to
ensure we are providing the best solution the industry has to offer.
The Path to Purchase Institute is a global association serving the needs of brands,
retailers, agencies and the entire ecosystem of solution providers along the path
to purchase. The Institute focuses on the forward-looking challenges and issues
confronting our members and the shopper marketing industry at large. We facilitate
industry interaction and foster best practices and a deeper understanding of all
marketing efforts and touchpoints that influence and culminate in purchase decisions
in-store, online or anywhere along the path to purchase.