Automotive P-O-P Gets Sophisticated

Although P-O-P for new cars and auto-aftermarket products is neither as glamorous as that for class cosmetics nor as ubiquitous as that for snacks and beverages, it is becoming more plentiful and increasingly sophisticated.Dealers are looking for new ways to entertain consumers and are carving out room in their showrooms to promote aftermarket products and accessories. Those in the after-market business are turning to P-O-P to explain the benefits of their widening array of premium products -- high-tech motor oils and performance spark plugs, for example -- to a growing number of older-car owners. However, the latter marketers face a formidable challenge because fewer and fewer owners are willing to tangle with the ever more complex world that lies beneath the hood.New Strategies to Sell New CarsAt the close of the 2003 model year, total U.S. new vehicle registrations were down 6.5% as compared to 2002, according to R.L. Polk & Co., a Southfield, Mich.-based automotive research firm. Only European brands and SUVs showed growth, while the total number hit its lowest level since 1999, the firm found. Among domestic brands, Ford's market share fell 11.1%, Chrysler Group's by 10.8% and General Motors' by 7.6%. Nonetheless, Lonnie Miller, Polk's director of analytical solutions, says, "The automotive market has been running at a very high rate, given the state of the economy. We expected to see some pull-back."Indeed, not everyone's auto sales are off. Ken Nishida, retail brand image manager with the automotive dealer development department at American Suzuki Motor Corp., Brea, Calif., says his company's sales were up 23% from June 2003 through June 2004, factoring out rental cars and other fleet business. "The dealers are starting to get a lot of confidence in the brand, and they're investing in their facilities," he says.In the showroom, he notes, Suzuki and its competitors have rolled out brighter colors and "active, real, playful-type images" in their P-O-P. "It's a trend that I think you see more and more as you go through the rest of the industry," he says. For Suzuki in particular, he points out, "The use of colors is key: bright, fun, not really heavy and imposing because that's not our brand. We are a young company trying to get a foothold."More broadly, Suzuki has attempted to create a fun sales atmosphere through its Suzuki Square in-store program, a $220 million dealer-side investment to renovate showrooms and outfit them with new P-O-P. Of the company's 509 dealers, 380 had signed up at the end of June, with 102 stores under construction and 13 complete, according to Nishida. "Are all the dealers going to do it? Probably not," he says, "but we've got a good start going."The concept features a red archway and square frames around displays. "We do have some displays, for instance, to set off our cars, like a light cloud that's suspended from the ceiling. That's just to highlight the vehicles," he says. "Around the wheel well is a vehicle pedestal that's kind of the information display about the car." Each class of vehicles has a separate color: green for SUVs, blue for sedans, yellow for sporty models.Chrysler Group, Auburn Hills, Mich., has taken a less thematic approach toward its Chrysler, Dodge and Jeep dealers, making an a la carte menu of point-of-sale solutions available on its Dealer Connect online site, says John Fisher, senior manager of direct marketing. Dealers can obtain banners, flags, card toppers and mirror danglers in one of three ways, he says: They can download a generic template with brand logos, fonts and colors and develop a customized banner or button for their particular promotion; they can download a completed piece of artwork and print it locally; or they can order -- online -- printed materials that Chrysler Group has in stock."All of those different elements are out there for the dealer's use," Fisher says. Adds spokesman Kevin McCormick, "We take a pretty decentralized approach in terms of point-of-purchase or point-of-sale. They have a lot of autonomy in terms of how they want to structure their advertising. We don't have a central czar who coordinates things for all 4,200 dealers."Auto dealers also have upped their in-store presence for parts and service products, although the showroom itself remains more or less off-limits, says Stephen Alexander, president of Automotive In-Store Marketing, a consulting and design firm in Sanibel Island, Fla. "New car dealers are reticent to take up showroom space because that represents vehicle space," he says. "Accessories are not what they want to clutter their floor space with."Nishida says accessories have been integrated into the Suzuki Square concept through the use of stands that can be wall-mounted or freestanding. "Those can be used for any sort of accessory, whether for our parts or others," he says. "We are doing more because, frankly, we did such a poor job of it prior."Toyota Motor North America, Torrance, Calif., typically rolls out P-O-P in conjunction with promotions such as its Thrust Month, held in May and October. Those campaigns have included posters, floor clings, banners and floor standees along with gas giveaway sweepstakes, says Heidi Shurtz, senior promotions and advertising administrator. But the company also has more permanent displays for its wipers, tires, batteries and chemicals, she says. "All of those have had similar P-O-P items."Donald DeBouse, director of marketing for chemical and fluid manufacturer Radiator Specialty Co. in Charlotte, N.C., says Toyota is especially advanced in its merchandising but notes that Ford also has progressed considerably, both in its showrooms and parts and service departments."From a P-O-P standpoint and a merchandising standpoint, [dealerships] used to be the worst place you wanted to go to buy anything in the aftermarket," he says. "It's changed a lot the last couple of years. The automobile dealerships themselves have really done a big job in terms of trying to improve their presentation of materials.""The new car dealerships by and large do a fairly decent job presenting some fairly exciting P-O-P in the showrooms, particularly when it comes to new car products," says Alexander. However, he says, "The industry has a long way to go. There are fits and starts."Aftermarket OpportunitiesOverall aftermarket sales grew 3.7% to $237.1 billion in 2002, according to the Automotive Aftermarket Industry Association (AAIA), Bethesda, Md. R.L. Polk's data as of May 2002 quantified the opportunity: a record number of vehicles coming off basic bumper-to-bumper warranties, with slightly more than 48 million vehicles under warranty and another 163 million out of warranty.Part of the sales surge has come from the growing numbers of higher-end, specialty products. Andrew Coccari, vice president of motor oil brand management for Shell Lubricants US, Houston, says oils geared toward high-mileage vehicles, for example, have presented opportunities for his company and others. "The flip side of that is, back in the days when there was just Coke and Diet Coke, it was easy to shop the category," he says. "With the proliferation of 'flavors,' and I'm using that in quotes, it makes it a little more difficult."Ed Farris, global packaging manager for BP Castrol, agrees. "We try to bump people up to higher-end products," he says. "With specialization comes the need to explain to customers the benefits and why they need these products." Farris notes a major challenge: Most people don't want to think about or can't grasp what's under their hood. "When you talk about things that support the inside of the car -- lubricants, oil filters, spark plugs -- most people can't see, touch and feel the difference."Radiator Specialty's DeBouse says the increasing sophistication of what's under the hood intimidates even people with a casual interest. "If you open up the hood of your vehicle, it's kind of hairy."But the advancing age of the average vehicle -- 9.6 years, according to Polk's figures -- presents opportunities, DeBouse maintains. "Our products are primarily for older vehicles," he says of brands like Gunk solder seal, Liquid Wrench lubricant and Engine Brite engine degreaser. "We've seen some moderate growth. It has not been spectacular, in the range of maybe 2% per year."To some extent, the new car market varies inversely with the aftermarket, says Tracy Beecroft, promotions manager for Farmington Hills, Mich.-based Bosch, which makes spark plugs, wiper blades and oxygen sensors. "New car sales being off is actually better for us because that means people are fixing their old cars," he says.Marc Blackman, vice president of marketing and sales for Gold Eagle Co., Chicago, which manufactures such brands as HEET antifreeze and Aluma-Seal, isn't sure new car sales have much effect on the aftermarket. "What will really affect sales in our category is marketing, packaging, advertising and promotion, allowing consumers to become more aware and more familiar with our types of products," he says.A Creative Void?Elsewhere in the aftermarket, consolidation of auto specialty stores into a handful of chains, and of the mass merchandiser market into one dominant player -- Wal-Mart -- has meant in-store marketers have had to work harder to get placed.The brands with the most clearly communicated benefits -- and the most brand equity -- are the ones that tend to make it into displays, says Blackman of Gold Eagle. "From a P-O-P standpoint, it is very much driven by retailer/operator specifications," he says. "All retailers have different requirements. Coming up with a standard display [is challenging] -- a lot of times they're more customized, to tie in with a given promotion or a given program with a specific operator."Automotive In-Store Marketing's Alexander says "aftermarketers" need to be bolder and more creative. "It tends to be rather sterile. They'll add some graphics; they'll add some freestanding cardboard displays," he says. "The aftermarket should use a lot more shelf-edge drama in its merchandising presentation. Our products tend to blend. Instead, effort has been put into packaging redesign to make our products more consumer-friendly. That's fine, but you still end up with a shelf that's an alphabetical blur.""Everybody gives lip service to the 'educating consumers' routine," Alexander adds. The aftermarket's problem, he says, is that it does not do enough to encourage people who come into the store with a single purpose to browse and shop. He says that the aftermarket has "slowly but surely" done more in-store, but not "in a way that remotely approaches the level of power and sophistication that we would find in food, or drug, or apparel, or toys -- or hardware, for that matter."DeBouse disagrees that these companies lack creativity but says they face increased competition from private-label products and stores' own branded displays. "There has not been a letdown or any delay in terms of new display types or the creativity of those display types," he says. "Our displays have more to compete with. P-O-P is expensive. In order to show the right kind of revenue and profitability, it only makes sense to produce P-O-P on certain types of products."Nonetheless, Radiator Specialty probably produces more P-O-P than ever before and has had particular success with The Home Depot, DeBouse says. "A lot of that stuff is literature-related," he says. "We have a full line of pre-packed displays. The product category is what speaks to whether or not you're going to have a lot of displays."Fight for SpaceFarris of BP Castrol echoes DeBouse's thoughts about private-label competition. "We all want to scream out our benefits, there's limited shelf space, more times than not the retailers want to sell their own brands," he says.Although BP Castrol has nothing new in-store at the moment, it has spent the past decade focusing on its premium Syntec brand with interactive voice boxes that answered questions about the product. He adds that the company has also used packaging to educate consumers about such brands as Mobil and Pennzoil.Bosch recognizes the competition for space but makes sure to have window decals, register toppers, floor clings and other pieces on hand.Shell Lubricants has created its own "solution center" for high-mileage vehicles that bundles products like motor oil, fuel injector cleaners and other categories, Coccari says. The 4-foot-tall set, which includes a header card and banner, "intersects with the consumer and gets them salient education," he says. "We've also tried to make the purchase experience clearer by segmenting by car type."For Honeywell Consumer Products, Danbury, Conn., which manufactures such aftermarket brands as Fram, Prestone and Autolite, the strategy has been to target new launches -- and to do what stores like AutoZone want. "We incorporate what we do in their signage," says Shelley Hoffman, trade marketing manager. "We still do quite a bit of P-O-P and try to get it up in as many stores as we can. It's primarily when a new product is introduced. The retailers are getting more involved in how their stores are being merchandised."At Big O Tires Inc., Englewood, Colo., that involvement has meant creating a more "relaxing and inviting environment" that recognizes women make up at least half of the target market, says Carrie Glassburn, national director of marketing. "Just because we're in automotive doesn't mean it has to look like a gas station. We are trying to improve the experience for the customer," she says. "We used to have a lot of technical information in the merchandising. We pared it down to benefits, in very customer-friendly language. We really considered color." Launched in June, the Big O campaign includes an information center, tire merchandiser and counter displays.At the Pump, Wal-MartShell Oil Products US, Houston, believes that even gas stations can generate positive reactions. The company's June launch of the premium-grade V-Power gasoline has come alongside its most extensive P-O-P package, with more than 15 types and half a million pieces flowing out to 13,000 sites, says Karen Wildman, manager of brands and communications.The draw begins with banners, pennants and other bunting that aimed at causing consumers to pull into the station, and ends with detailed information at the pump. "We wanted to attract people's attention to get them to turn into the site and learn more about Shell V-Power."Aftermarket companies say they have more success placing displays in the auto part chains like AutoZone, Advance Auto Parts, Pep Boys and NAPA than they do at Wal-Mart and other mass merchants, partly because the latter do not carry a full line of products and partly because they tend not to attract serious do-it-yourselfers. "Should Wal-Mart ever decide to get into the automotive aftermarket in a serious way, with a full line of products, Katy bar the door, because they know how to merchandise," Alexander says.BP Castrol has experimented both with Wal-Mart and O'Reilly Auto Parts, a smaller Midwestern chain, to put together a grid system that gives consumers detailed information about different grades of products, Farris says. "The experts won't buy [at mass merchants] because they don't perceive they're going to get any education," he says. Specialty stores, which have more interest in P-O-P overall, "are generally getting the enthusiast or the expert shopper."Honeywell Consumer Products finds all stores and channels are becoming more systematic about P-O-P, Hoffman says. "They try to keep it cleaner and neater, so that everybody's not just sending in a hodgepodge of stuff."Bosch's Beecroft finds stores' greater involvement a bit dizzying. "It changes all the time: Some days they'll accept certain things -- they'll want window displays and floor graphics and counter cards. And then we'll do a promotion a couple of months later and they don't want any of that."Coccari, of Shell Lubricants, says, "Our displays are primarily in auto retail, the Pep Boys and the AutoZones of the world, and then we also do quite a bit of off-shelf at Wal-Mart. You know what the restrictions are," he says. "We use all the tools the accounts let us use."

Automotive P-O-P Gets Sophisticated

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