Chains Take the Lead In Driving P-O-P Decisions

The consolidation of retail channels into fewer chains actually offers great opportunities for marketers. It allows them to focus their attention, work more closely with those giant retailers and customize P-O-P pieces using long enough production runs to make them cost effective. But as retail options consolidate, the big chains are asking for more than customization of majorbrand displays -- they want unique pieces, often conceived of and controlled by their own staffs. "Lowe's does not want vendor displays, per se, in our stores," says Vaughn Hayes, vice president of store planning for the North Wilkesboro, N.C.based home center giant. "We want to control that creative process. We don't want the store to look like it has a Black & Decker or Ryobi tool department. We want to be known for our brands, but we want it to be a Lowe's tool department. We're more interested in how the total store ties together than in having differently-colored promotional pieces."To stress that, Lowe's last year created its own branded Tool World department in which it displays tools by type, regardless of vendor, in a structured, consistent merchandising format. The program has proven so successful that the chain has developed a similar ideology for its carpet department, which it is now rolling out. Haves stresses that in both cases, the vendors must work within a format -- but they also have some leeway in presenting their products."Lowe's controls the presentation, but we don't dictate every element," he explains. "Obviously, our carpet vendors know more about the flooring business than we do, but we know more about how to sell to our customers than they do. It's a give-and-take exchange. We're very receptive to their ideas on how to present the category, but we want control. If we left it up to them, the entire 114,000-square-foot box would be a flooring display."Standard floor displays are also a dying breed at Southland Corp.'s 7-Eleven stores, says Nancy Smith, national promotions and P-O-P manager. "In the last few years, we've tried not to do as much in the way of floor displays in an effort to differentiate ourselves through new items and products unique to 7-Eleven. We want to separate ourselves from the typical c-store or g-store. We're going for a cleaner, less-cluttered look."To achieve that, the company works closely with targeted accounts to create unique retail promotions. "The category manager is the first contact," Smith says. "He or she will talk with the supplier about the potential and the customer value and then decide whether we can execute the program based on the size of the opportunity presented." These programs are then combined among the 15 to 20 category managers handling the stores to create annual, monthly and biweekly sales plans to ensure some -- but not too many -- promotions and product features are always under way.In many cases, especially with dominant, key accounts in each category, 7-Eleven may initiate the idea. "We're always out looking for opportunities to promote the store," she says. "We don't have suppliers come to us saying, 'I have a 140-count display and I'll give you $4 to put in on the floor. More likely, we're going to them saying, 'It's July, customers are looking for small packs of crackers and tie-ins with beverages: Can we work out a package and promotion to take advantage of that?'"The goal, she stresses is to "create programs that customers value and that are unique to our stores." That also goes beyond existing accounts and products, she adds. "We encourage suppliers to bring us new items so we can test them. Our job is to work with suppliers and find the right way to fit us both into a product and merchandising approach that helps our customers."This customized approach to entire retail marketing programs -- packaging, advertising and P-O-P -- is becoming more acceptable to marketers, because the payback can be huge. But it also requires more in-depth understanding of the retailer's customer."Marketers and their P-O-P providers must have a much better understanding of the consumer market today," says consultant Roger Blackwell. "P-O-P producers and marketers used to think the store was their customer, but now they realize they also have to solve their customer's problems. That requires sharing information and working together throughout the chain."Kodak has seen that happen, says Kristi Marchbanks, vice president and general manager of the Kodak Retail Services Division, Atlanta. "Whether we customize displays depends entirely on the retailer involved," she says. "Some like to be the brand-name provider, so they want our name prominent on dis- plays. Others don't like to co-brand; they want to be seen as the brand itself." In a few cases, that even means creating a private label for the retailer. But with Kodak's dominance in the market, she notes, that is unusual.Some of the programs created for individual retailers can include entirely new products in addition to packaging, graphics or positioning. One innovative program can be seen in an exclusive line of border styles Imperial Home Decor Group created for Lowe's Cos., designed to complement the Laura Ashley brand of paint colors. "Lowe's asked if we would produce this product, so we worked with the Laura Ashley people and their fixture company to ensure the fixture we created for the borders matched theirs," explains Debbie Yurgen, director of trade marketing."We consider paint to be our biggest competitor, but if Lowe's was going to stock Laura Ashley paint, we wanted to pick up whatever additional sales we could," she adds. The company has also introduced a line of textured-vinyl paintable wallcoverings, which can also complement a retailer's paint offering. "Our ultimate goal is to meet the customer's needs and grow the business however the retailer needs us to. That's good for us and the retailer."That also holds true in the newspaper world. "The more we can customize our fixtures, the more persuasive they are," says Eric Wynn, assistant circulation manager for The Dallas Morning News. "We've hooked up with companies creating the retailer's own fixturing to ensure our approach matches what is already being used at the checkouts, to ensure we are complementary."The economics of that approach are becoming more enticing, adds Tony Mineart, manager of retail sales at the Washington Post. "Newspapers will spend $350-$450 for a rack that's chained to a bus stop pole in the middle of nowhere and stick five papers in it," he says. "But Joe's Deli, which sells 10 papers a day, gets a $37 wire rack slammed into its corner. I'd rather spend $80 to create a slick display with Joe's name on it and increase my sales by five papers a day through him."That not only cuts fixture costs dramatically and improves merchandising, he points out, but it offers other advantages. "Maybe I can eliminate that $350 rack altogether and drive more people into Joe's," he suggests. "I'd rather do that and have Joe selling my paper, because it cuts my maintenance costs and is easier to service."In some cases, customizing can take the form of mix-and-match programs rather than unique pieces, Kodak's Marchbanks points out. Kodak has also had great success with specialized headers highlighting different ethnic groups or supplying bilingual copy. This may carry over to packaging, too, she notes. "There can be a tremendous sales lift if we can get something into the store that directly targets the customer base in a specific situation. Not all customizing means creating specific retailer-oriented colors or logos."The mix-and-match approach has also paid off for American Greetings, says Ray Young, director of retail design. "We offer a myriad fixture options, depending on the card line involved and the retail need," he says. "There can be six different ways to merchandise one line of cards using our existing pieces. The decisions on which ones are used all come down to productivity. If it looks wonderful but doesn't sell, nobody wins."How a marketer's key goals can conflict with the retailer's own was brought home for American Greetings when it created its new gift-wrap merchandising system, which was introduced in May and was rolled out this summer. "In talking with retailers and our field-sales team, they all said that the key need was for the display to be easy to service. That hadn't been one of our marketing department's priorities going into the design. They were focused on explaining the message and keeping the unit compact." Field sales also stressed to corporate that the other priority, above anything else, was that it had to be easy to shop. "Retailers often have very simple but powerful criteria that can become lost in the desire to create the best fixture from our own standpoint."That's why more marketers are coming around to the idea of creating closer relationships and gaining more upfront input all the time, Mineart says. "It's going to continue, he says. "Retailers need to partner with us to create consistent programs. We've been slow to learn, but we're getting there. This is going to be a constant driver in our business for years to come."

Chains Take the Lead In Driving P-O-P Decisions

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