Point-of-Purchase

There’s one critical task P-O-P marketing cannot do, and that’s to bring customers into the store. What’s missing is a “friend on the outside” – a component of the plan that would reach shoppers before they reach the store.

Place-based or point-of-purchase marketing has a fine tradition, reaching at least as far back as the 1800s. In those days, Smith Brothers was fighting against a slew of copycats hoping to cash in on the success of the company’s cough drops. William and Andrew Smith chose to place their distinctive, bearded portraits on their point-of-purchase materials, which consisted of glass bowls for counter display and small envelopes into which the shopkeeper counted the cough drops for each sale.

Smith Brothers also illustrates another principle of P-O-P marketing: the impulse buy. An enterprising distributor, the story goes, provided signage touting the drops’ 50 price and told the shopkeepers, “Make sure every customer gets a nickel in his change.” Reportedly, the result was that many customers impulsively flipped the nickel back at the shopkeeper and bought some cough drops. This simple principle – trying to influence the consumer just before a buying decision is reached – is now applied to a host of products in venues such as grocery stores.

And the numbers show that the approach works – or at least some of the numbers do. PROMO Magazine offers figures claiming 16 percent growth and $13.7 billion in 1998 revenue.¹ The Point-of-Purchase Advertising Institute cites data showing that about 70% of purchase decisions are made in the store. However, rival statistics claim that only a fourth of shoppers notice P-O-P promotions on product packaging, and of those who do, only a tenth actually go on to buy the product.²

It’s also important to keep in mind that there’s one critical task P-O-P marketing cannot do, and that’s to bring customers into the store. What’s missing is a “friend on the outside” – a component of the plan that would reach shoppers before they reach the store…perhaps with a sister campaign on the Radio.

Advantages

Disadvantages

Placement: Place-based advertising can be located almost anywhere – in stores, next to merchandise, on shopping bags, at the checkout counter, even suspended from the ceiling. Targeted: It is most effective when it is located so it reaches a clearly defined consumer target closest to the time of purchase. Effective: Place-based advertising directly affects incremental sales, brand switching, portfolio purchasing, and multi-unit sales. Influential: P-O-P advertising gives retailers the opportunity to influence consumers in a competitive environment.

Limited Reach: By definition, place-based advertising only reaches that small group of consumers walking past displays, waiting at the checkout counter, or carrying their bags to the car. Moreover, studies show P-O-P marketing works best when geared toward younger, single, less affluent shoppers. Product-Oriented: Place-based advertising influences what products consumers may buy, but not where they will buy them. Though often appropriate for improving product sales, place-based media inherently are limited in their ability to attract new customers, build traffic, and improve market awareness for retail advertisers. Consumer Perception: Most consumers report that in-store TV monitors, electronic signs, and in-store broadcasting have little impact on them as they shop (they also claim that these devices blend into the environment). Shoppers: Only about 20% of supermarket shoppers browse the aisles in drugstores or discount stores; the rest completely miss promos, displays, or special signage in those stores. Limited Targeting: Despite its key placement, general-reach place-based advertising (such as in-store television) delivers limited results and can be prohibitively expensive.