No Pain, No Gain

Welcome to the recession — since it’s now safe to officially call it that. P-O-P manufacturers, however, were witnessing its effects long before economists pronounced it as such.

“The last six months have been very uncertain,” says Doug Leeds, ceo of New York City-based manufacturer Thomson-Leeds. “Then Sept. 11 happened, and no one knew what to do. Even brands that are doing well are cutting back on marketing — because they can get away with it.”

“Sept. 11 has become a mammoth excuse for brands and retailers to say no to P-O-P,” according to William Kolb, ceo of East Rutherford, NJ-based Trans World Marketing, noting that “a slowdown was coming anyway. P-O-P has always been the catch-all in past economic slumps, but this is a new world.”

Fortunately, the P-O-P segment is coming off several years of strong growth, with spending up 15 percent to $17 billion in 2000. While industry optimists suggest that spending may have held steady last year, the general consensus is that there was a significant decline — and that the slowdown will last at least into early 2002.

“There was softness in the economy throughout 2001, but Sept. 11 was the exclamation point,” says Dick Blatt, president of industry association Point of Purchase Advertising International, Washington, DC. “A lot of clients were postponing orders before [the terrorist attacks], hoping we’d have an economic turnaround in the fourth quarter. That didn’t happen.”

Of course, not all the challenges confronting the P-O-P industry came from such uncontrollable, outside sources. While the effectiveness and cost-efficiency of P-O-P displays were reinforced by POPAI’s new measurement studies (May 2001 PROMO), the difficulties in gaining retailer compliance have yet to be resolved.

“We haven’t done any P-O-P for the last two years,” says Sarah Mateski, marketing assistant at Land O’ Lakes Butter, Arden Hills, MI. “It’s just too hard getting stores to put P-O-P up in the dairy case. Now we’re focusing on mass media.”

“Most brands are lucky to get 40 percent of P-O-P materials up,” says Ted Bohner, chief marketing officer of Promo Edge, Elk Grove Village, IL. “Some marketers and manufacturers are realizing they’re not getting their bang for the buck and saying, ‘What are we doing this for?’”

“Getting a display up isn’t child’s play,” says Scott Greenberg, vp-visual merchandising for Mountain View, CA-based Skechers USA. “You can get materials approved all the way down the [corporate] line and still run into a local store manager who says, ‘Naw, I don’t like it.’”

Necessary Evils

Still, with most purchase decisions being made in the store, many brands soldier on — especially those whose budgets weren’t scaled back last year.

MasterCard International, Purchase, NY, concluded 2001 with an in-store bang that was part of its now-annual Priceless promotion. “This was by far the most comprehensive P-O-P campaign we’ve done,” says vp-global promotions Robin Blunt. “One area that’s been eluding us is a full embrace of point-of-sale.”

MasterCard sent P-O-P kits to 300,000 merchant and restaurant partners across the country containing window clings, tent cards, employee buttons, register decals, coupons, and check presenter inserts customized by retail category. The promotion awarded one cardholder five “prizes of a lifetime”: an African Safari, a visit from a celebrity chef, a behind-the scenes tour of Space Center Houston, a trip to a racing school in England, and VIP passes to the My VH-1 Music Awards. Ryan Partnership, Westport, CT, handled.

The brand goosed compliance among retailers with a mystery shopper program that sent teams into stores to award $50 gift cards whenever they encountered Priceless P-O-P. Five random participants won $2,500 gift cards, and the staff at the store which produced the grand-prize winner earned a Major League Baseball prize package. (MasterCard is an MLB sponsor.)

Purchase, NY-based Pepsi-Cola Co. launched Pepsi Twist last October with a heavy slate of advertising but an equally important focus on displays. “We used a fun, playful theme with our TV spots, and we’re trying to do the same with our P-O-P,” says senior marketing manager Russell Weliner. “P-O-P is critical for a new product launch. We tested Pepsi Twist over two summers and found that 40 percent of our consumer awareness came from retail.”

Standard Twist displays feature cans hatching from lemon “eggs.” A Thanksgiving flight featured “mom” serving the family a giant Pepsi lemon instead of a turkey.

Apparel maker Skechers gives most of the credit for its brand-building success to retail promotion. Each Skechers brand has its own dedicated materials. “In the past, our P-O-P was pretty random,” says Greenberg. “Now it totally matches the brand.”

For the launch of the 4 Wheelers shoe brand last fall, Skechers delivered more than 11,000 displays — but worked closely with retailers before sending them out. “The days of randomly mailing materials and praying they go up are over,” says Greenberg. “We try to do retailer-specific promotions as much as we can. I’ve heard people say 60 percent to 70 percent of P-O-P materials never go up. But I think 80 percent to 85 percent of our stuff makes it.”

On the Bright Side…

Some industry observers are hoping the New Year brings a quick reversal of fortune. “I think we’re going to start seeing pent-up demand for P-O-P,” says Leeds. “A lot of marketers really haven’t done anything recently, and they’re suddenly going to realize they need to get back out in front of consumers.”

“We plan on using P-O-P even more,” says Ray Gomez, marketing communications manager at Montvale, NJ-based paint maker Benjamin Moore & Co. “You’ve only got a limited time to be in the consumer’s face, and P-O-P is just the ticket.”

Retailers are showing a greater commitment: After conducting an internal study last year, Bentonville, AK-based Wal-Mart determined that attracting new customers was cost-prohibitive, and so instead decided to focus its marketing plan on mining more out of existing shoppers. That has prompted display-driven cross-selling in the aisles. (A “Spamouflage” created by Spa Austin, MN-based Hormel for sale in sporting goods departments has been the leading example.) And as Wal-Mart goes, so often goes the industry.

Another good sign is the increased investment many marketers are making in display design, moving away from corrugated cardboard to more substantial structures of wood or plastic — but more significantly featuring technological enhancements.

“We wanted to differentiate ourselves from the competition, so we spent a little extra to make sure our standees had things like metal foils,” says Bill Brownell, group manager of retail marketing for Redmond, WA-based Microsoft Corp.’s Xbox game system. “Also, a lot of the retailers look very homogenous in their approach, so we developed presentations to help them with their displays.”

Macy’s, New York City, is working with Thomson-Leeds to test a new service from Stamford, CT-based Xerox Corp. called Smart Paper that changes copy on signage via radio signals. Thomson-Leeds is also testing Maestro, a scanner system that would enable cross-promotional messaging. (Scanning a flashlight, for instance, would prompt a message about purchasing batteries at checkout.) Sears, Roebuck and Co., Hoffman Estates, IL, is currently testing the service in Canada.

And, the size or price of a product isn’t an obstacle anymore. Take Phoenix-based Ping Golf, which in the past has admittedly found that “showcasing carry bags is a challenge for retailers,” says marketing manager Steve Bostwick. Working with Trans World, Ping developed a six-foot tall, three-foot wide display that houses up to 12 bags.

Or witness Samsung Electronics, Ridgefield Park, NJ, which found that the price tag for its MP3 players usually drove them under glass, even though “retailers were screaming for a solution that could make them more interactive,” says national marketing manager Russell Bleeker.

Working with Thomson-Leeds, Samsung devised a three-in-one countertop display that was tested in early 2001 at Midwest chain Ultimate Electronics, and soon after moved into national retailers including Best Buy and J&R Electronics.

Where there’s a will, there’s a way.