1999 P-O-P Trends Report

We start at the top with a bottom-line question: What does the 1999 P-O-P Times/P-O-P & Sign Design Trends Report have to say about business in the year ahead? Good news, all around. More than eight out of 10 consumer product marketers surveyed said that they will increase their P-O-P purchasing budget in 1999. Of those increasing their budgets, more than one in four said they will increase it by 10% or more. Nearly two-thirds of the product marketers surveyed stated that P-O-P "has become more important" to their sales efforts during the past five years. Only 6% said it had become less important during that time period. P-O-P producers are likewise bullish on 1999. Approximately 65% of producers surveyed by P-O-P Times posted sales increases in 1998, about on pace with the previous year. What's more, nearly 80% of P-O-P producers predicted that sales will increase in 1999. Those are just a few of the many information nuggets that can be gleaned from this year's report. For the past six years, this magazine has surveyed P-O-P industry attitudes about in-store merchandising practices. This year, in response to requests from readers, we added a host of new questions such as: "How much does P-O-P increase sales?" "What forms of P-O-P do retailers most frequently accept?" "How many of the displays that are accepted actually get placed in stores?" and "Where do displays most frequently get positioned?" The 1999 Trends Report is based on the findings of three surveys of P-O-P Times and P-O-P & Sign Design readers. Questionnaires were sent to three distinct groups of 1,000 readers each: consumer product marketers, retailers and display manufacturers. A $1 incentive was included with each survey. The response levels were more than 30% for product marketers and P-O-P producers. The response rate from retailers was more than 20%. Sales FiguresOne of the most sought-after -- and previously unavailable -- statistics in the P-O-P industry is how much a display actually increases sales. While the answers ranged from a low of 10%-15% for tobacco products to a high of 115% for soft drinks, on average, marketers believe they get a 30% boost from using P-O-P.For the first time ever, consumer product marketers were asked about the costs they had incurred in the past year. More than one-third said that design costs had increased, and more than half said that production costs had increased. However, less than 5% said that either had "increased dramatically" -- good news for any marketing manager or P-O-P producer trying to defend the latest invoice.Another intriguing data nugget is how marketers apportion their P-O-P budget between permanent and temporary displays. The vast majority of alcoholic beverage, movie-video-music, and cosmetics P-O-P is temporary, while most consumer electronics, jewelry, and motor vehicle P-O-P is constructed of permanent materials. Industry segments that spend the highest percentage of the total marketing budget on P-O-P includes jewelry (50%), confectionery (37%) and tobacco (30%). Development TeamsThis year, consumer product marketers and retailers were asked a series of new questions in an effort to gain a more complete understanding of how the P-O-P development process works. Marketers were asked who they look to for "primary assistance" in developing P-O-P. More than one-third of respondents said that they look to their "P-O-P producer/vendor," while one-fourth said they rely most heavily on their in-house graphics/design department. Make particular note of this fact: Only a relative few look first to their advertising or promotions agencies. Marketers were also asked how many P-O-P companies they use. On average, they report using two or three suppliers for both temporary and permanent display work. Beer/wine/spirits marketers seem to use the most suppliers -- upwards of seven or eight. Consumer electronics product marketers, on the other hand, seem to rely on only a handful of companies.What do marketers take into account when selecting P-O-P suppliers? According to the table at right, most marketers said that the deciding factors are "low costs" and "design capabilities." Producers, on the other hand, believe the most important factor is their ability to provide fast turnaround. Retailer Report CardMore and more, however, it is the retailer's opinion that matters most. Consumer product marketers frequently consult with retailers in advance on display programs, a trend that has been growing in recent years. The highest levels of retailer participation are seen in the supermarket channel. And while retailers are often seen as barriers to erecting P-O-P, most also see its benefits. More than 40% said they like P-O-P because it "educates consumers and acts as a silent salesman." That makes sense, especially when you consider that the number one reason retailers are willing to accept a display from a vendor is that it supports a new product introduction. But what do retailers think about P-O-P in general? Overall, consumer product marketers get a C+ on a P-O-P report card from retailers, with the lowest marks given to the durability of displays. Retailers are decidedly neutral about the quality of P-O-P being offered to them. Three out of four said the quality is the same as in years past, although only 12% said that the quality of P-O-P being offered has improved. That's down from 20% last year. In fact, 40% of retailers said that over the next few years, they will be accepting more displays and signage than in the past. When asked in which categories suppliers seem to understand their needs best, retailers gave the highest marks to the P-O-P distributed through the department store and liquor store channels. When retailers were asked about the greatest weakness of manufacturer-supplied P-O-P, nearly one in four said that the displays were inappropriate for their particular channel of trade; another 20% complained that displays were the wrong size for their store; another 30% complained that displays were either poorly built or were just unattractive. What Gets Placed?This year, the survey asked retailers to itemize which types of displays they customarily accept or reject. The data shows, for example, that all supermarket retailers surveyed are willing to consider floor displays. (This does not mean, however, that 100% of floor displays are accepted by these stores.) Likewise, mass merchants are receptive to pallet displays; supermarket and specialty retailers generally decline them. Convenience store retailers are fond of floor displays, translites for menuboards, case stackers and shelf organizers. Supermarkets are becoming highly favorable to sidekicks and refrigerator graphics. Home center/hardware retailers are big on interactive displays, although convenience stores hate them. Convenience store retailers said that their best P-O-P comes from alcoholic beverage marketers. Supermarket retailers and mass merchants give their highest marks to the P-O-P provided by motion picture/video marketers. So what percentage of the approved displays -- those that are accepted by retail buyers -- are actually set up in stores? In the opinion of both retailers and product marketers, about 70% of approved P-O-P gets put up in stores. Where are retailers most likely to put a display if they had to choose just one area of the store? According to the chart below, more than 16% said aisles, 14% said the checkout area and 13% chose endcaps. The least popular in-store location: gondola shelves. Retailers were asked to name the most important time period is for having displays in-store. While most indicated that displays were important year-round, about one-third ranked the fourth quarter as the most critical time.The data for the 1999 Trends Report was compiled, cross tabulated and reported by LeeRoy Tupper of Chicago Computing Co. All charts for this report were produced by Mitch Lopata of Lopata Design, Skokie Ill.

1999 P-O-P Trends Report

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