Computing P-O-P

Customers at a Burger King restaurant in Manhattan's financial district recently had an opportunity to get more than the usual Whopper and fries. With each "Value Meal" purchase, they received free Internet time on one of 20 computers located along the store's perimeter. I The computers, complete with digital Web cameras and other hardware supplied by 3Com Corp., allowed the customers to access the Internet or send video e-mail postcards to their friends, P-O-P displays were used to explain the products and processes as well as to draw attention to the promotion."The promotion was very successful for us and Burger King," says Denis Underwood, product merchandising manager for 3Com, Rolling Meadows, Ill. As proof, the Burger King franchisee began a similar promotion in May at his Times Square location. Both stores feature 3Com's HomeConnect branded digital home network systems, broadband modems and Webcams. The Pentium II-powered PCs are accessed by customers via PIN numbers that they receive with their purchase, which provide them with 20 minutes of Internet time. Future plans include adding streaming video technology and videoconferencing availability between restaurants."It's an example of how we're thinking outside of the box to get our products in front of people who might not see them regularly," Underwood says. "This allows them to try the technology and see how easy it is to use." It's also a channel that hasn't been exploited much by computer hardware makers, and in today's market, exploring new channels is an important marketing tool.Marketers of computer hardware and peripherals realize that, as with other products, their market is evolving as it matures. The customer base has expanded beyond technophiles and computer technicians to include a mass audience that may have a limited knowledge of computer products and their applications. As a result, in-store messages must speak to this broadened consumer base.These new customers include home computer users, home office workers, small business owners and kids. Their interest and product knowledge varies, making it imperative that merchandising pieces meet their specific needs in language that they can understand. It's a different market than it was five years ago, when most computer aficionados well versed in "tech-talk," poured over specs and then went to stores to find the best price on their selected product."Computer equipment has crossed the marketing chasm," says Paul Chapuis, manager of retail merchandising in North America for Logitech Inc., Fremont, Calif., a maker of cord-less keyboards, mice and Internet cameras. "Computers have gone from being a technical item for technical people to being an everyday item for everyday people. That changes things considerably when you talk about merchandising."We are no longer selling to people who essentially use the retail store as a distribution point to pick up products they had already decided to buy," Chapuis adds. "It's become more of a browser's market and that means we have to work to enhance the shopping experience. It's not a revolutionary concept because other consumer goods categories have done it for a long time. But it's new for the high-tech market."That's a concept that the marketers must learn -- and they also have to convey it to their retail buyers. "The buyers for computer equipment have very little knowledge of merchandising techniques because it previously wasn't needed," Chapuis says. "They tended to be technical people who downplayed the value of having information at the point-of-sale because the customers didn't require it. But now the customer base is wider."Carolyn Hasker, worldwide channel marcom manager at Intel Corp., Santa Clara, Calif., agrees: "We're seeing an increased interest by retailers to reach different audiences now. That's been an obvious need for other types of products, but it's a new religion for computer hardware markets. As the consumer market broadens, it becomes less sophisticated, so there's a need to be less technical."Adds 3Com's Underwood, "We're selling customers on solutions to their problems and our experience, not the technical specs we provide."Those benefit messages are shifting from the hardcore business user to the casual user, Chapuis notes. "The taglines for our Internet cameras have changed from noting the enhanced productivity available through online videoconferencing, to showing how the products can be used to send a video clip to your grandkids. The message is not to tell them that a technology is now possible, but to show them how they can use it in their personal lives."At the same time, Hasker points out, some experienced computer users are still coming into stores to upgrade or enhance their existing systems. "The market is definitely broadening, and the people buying computers for the second time are more technically savvy. You need to meet their needs, too. But in many cases, they know how to find the information they want in manufacturer's literature or outside sources, so there's less need to put that up front on the display. You don't want to intimidate and frighten people away by overwhelming them with the specs, but you want to include that data somewhere for people who understand it. The goal is to be more benefit-minded overall."Brent Haas, product programs manager for Canon Computer Systems Inc., Costa Mesa, Calif., says, "Some customers enter the store and say they want a photo-quality printer, while others say they have $150 to spend and want the best color printer they can buy. You have to understand what each customer wants and not just quote specs to them that they may not grasp."To meet differing consumer needs in different classes of trade, marketers are designing more channel-specific P-O-P. At Canon, for instance, the messages and formats used to merchandise printers in mass merchant accounts are similar, but more technical data is offered for professional camera stores. The company is supplying camera stores with a portfolio presentation of high-quality print samples to show each printer's capabilities. "We probably won't offer these to mass merchants because they're expensive to produce and may not be as effective," says Haas. Instead, brochures will be used to show the various options available in mass merchants.Hands-On Approach is AppealingFor Microsoft Corp., which makes keyboards, mice and joysticks, the goal is to get the product into the customer's hands, says Darrell West, group manager of channel marketing for the Redmond, Wash.-based company. "We do most of our selling from in-aisle fixtures because our products are in a fairly low involvement category," he says. "Customers don't tend to think about a keyboard until they need one, so we don't have many impulse purchases."Those in-aisle pieces are designed to be eye-catching enough to entice the customer to buy today, as well as to sell them up to a more feature-heavy product that offers more benefits. For Microsoft's recent introduction of the IntelliMouse Explorer mouse, the company produced a display that featured a mirrored base and light system to encourage customers to pick up the mouse to see how its optical system replaces the traditional trackball."We have three key goals," stresses Christine Kerr, Microsoft product manager. "We want the customer to be able to touch it and pick it up, understand the benefits it offers, and be able to locate where the product is stocked nearby."According to West, "Merchandising is definitely becoming more interactive, so customers can become more emotionally involved rather than just reading bullet points off the box and trying to visualize the advantages. We're making a big investment to bring that experience to retail."That's especially important in the gaming segment, West notes. "Gaming customers are becoming very sophisticated, especially at the premium end of the scale, so we have to ensure that our messages reflect that knowledge base." Interactivity was especially important for the company's newest joystick, which provides kickback and resistance to better simulate the true experience. As a result, the company created a closed-loop, interactive display system that allows customers to play games without having full access to the computer terminal. "Kids are too hard on open systems and can cause damage, so the closed system offers the benefits of showing how the products work without the worry," he says.Canon, too, has focused on interactive approaches by using demo actuators that allow customers to print out a sample page from each printer. But as pricing drops on the low-end printers, the company is shifting to displaying those models with header cards depicting laminated samples. "The actuators are expensive to produce, so we have to find alternatives that provide a similar result," Haas says.For cordless mice and keyboards, Logitech's Chapuis prefers shelf-edge materials that hit customers where the inventory is stocked. Likewise, Haas has a preference for take-one brochures that the company provides to stores in small metal racks. "They don't take up much space and they allow us to show the comparisons among models. We can pack those with information on specs and their related software without cluttering the presentation."Working with RetailersSome of these efforts, however, are being thwarted by more retailer restrictions on merchandising overall and the acceptance of fewer pieces from each account, Haas says. For example, one of the company's "primary weapons," key-messaging stickers attached to the tops of printers, are now being refused by a key account. The retailer has also restricted the acceptance of take-one brochures to small tear pads to reduce clutter. "All retailers are beginning to restrict what they'll accept," Haas says. "The combination of more competition for the available space and a desire to reduce the total number of pieces overall is making it difficult to get displays into the aisles."Marketers are working more closely with accounts to ensure that they are supplying the most effective display pieces. 3Com, for example, has moved away from take-one brochures because it's difficult to maintain them in the store. "We've tried to create a brochure area in the store, but if it's not populated with collateral pieces, it blends in and fades away, so we don't emphasize it anymore," Underwood explains.The company now focuses its efforts on permanent merchandising solutions and long-term endcap locations. "We try to go after strategic partnerships and customize solutions to meet retailer needs to secure permanent locations," Underwood says. "We want permanent, differentiated exposure, so we look at it from their perspective and what will work in their stores. We want to get the retailers excited about our idea." That usually means going to them before producing materials, he adds. "We have to get their input up front to get into the store. They won't accept a piece if we just present it as a finished piece. It's a partnership, and we want to open a dialogue."Intel, a producer of processing chips, is in the unique position of selling a product component rather than a stand-alone item. The company must work closely with each retailer to meet specific needs, Hasker says. Efforts are focused on semipermanent and permanent fixturing options. "Our approach has changed because across the board, retailers are taking fewer and fewer merchandising pieces to reduce clutter," she says. "We are sensitive to making sure we provide the information they need, while also providing the clean-store look they want." Retail consolidation "makes it more important than ever that we listen to their specific needs," she says. "We can't rest on our laurels. It forces us to pay attention to what our customers really want, so it's a good thing overall."Adds Microsoft's West: "We're seeing a stronger visual-merchandising stance on the part off the large resellers, projecting their own brand name to stand apart. That makes them apprehensive about accepting any vendor merchandising pieces. We've found that our demonstrators have to be very compelling. They have to showcase the technology well, and they have to present a look that's consistent with the store's own."We've learned that you don't just work with the buyer until the last minute and then tell operations you want to place it," West continues. "They have different criteria for acceptance. We sit down with both departments, tell them what we want to accomplish, and ask them what their objectives and obstacles are. That results in us getting solutions and them gaining ownership of the program, which makes them want to make it succeed."Logitech's Chapuis agrees that getting programs in the door can be a challenge. "Retailers see the potential for merchandising programs after they're in place, but getting them into the aisle is tough. As with any sales call, the toughest part is getting in the door. That's why it's critical to develop a relationship."In some cases, those relationships lead to more all-encompassing programs, Chapuis notes. "One of my goals with Logitech is to convince retailers of the value of category management systems and to give them one 'champion' in each department." That emphasis, he explains, comes from his past experience working for consumer goods companies such as Oral-B Laboratories and Kodak Canada, where such programs have gained acceptance.Chapuis says initial efforts from Logitech are currently being evaluated by Best Buy and Staples. "I intended to create a system and explain it to them slowly, but they both wanted it right away. There is so much customer interest in these computer products, but the presentation in any given store is a mess. Convincing retailers of the value of our merchandising approach didn't work very well until we had a finished system in place that we could show them."To help get retailers to accept his new display system, Chapuis offered to reset a store in one morning and let the retailer evaluate how consumers interacted with it. "It was a great approach," he says. A test of the Staples program began in late May for 30 stores, with a full national program planned by the fall back-to-school period.Microsoft, too, has had some success with its category management systems in CompUSA stores. "Retailers want a consistent presentation across the category," Underwood says. "We have worked directly with competitors and it works well. The goal is to help the retailer sell more products."Hewlett-Packard Co. has also organized a display system for its line of printers, called the HP LaserJet Showcase. It has been installed in CompUSA, Office Depot and Staples stores and continues to roll out. Its format includes a customer qualification system that matches printers to users according to their needs, and uses a color-coded format to guide users to the appropriate printer on the shelf Product cards list key specifications to make comparisons easy. Print samples, brochures, and toner and accessory guides also help ensure that the customer considers all the options."The HP LaserJet Showcase's approach and design have changed the shopping experience," says Linda Crazier, marketing manager for LaserJet products for the Vancouver, Wash.-based company. "The goal is to assist customers in making an efficient and informed choice when purchasing a new printer." Each retailer has a customized version of the Showcase to meet its individual formats and needs, but the messaging remains the same across all presentations she notes.What Does the Future Hold?Marketers agree that the broadening market is a trend that is sure to continue, both in customer base and retail outlets. The recent introduction of low-cost Internet browsers with no hard drive or other computer-related functions makes it obvious that the options for customers are still evolving."It's hard to tell if the market will splinter into segments of specialty computers or stay as one large category," says Intel's Hasker. "As electronic retailing makes more noise, brick-and-mortar stores are worried about their ability to merchandise and attract customers. But the online options mostly just draw attention to what the actual shopping experience is. Customers who walk into a retail store are there because they want to be there. They want to talk to someone, physically try a product or have a shopping experience. Retailers need to be aware of that and provide a positive experience."Even the current restrictions on P-O-P quantity and placement don't worry Canon's Haas in the long run. "These approaches happen every few years and then they change course again as they see how their market responds," he says. "They cut back on merchandising pieces and then discover their customers want more information. These are selling tools that add value because you can't rely on in-store personnel to be available to answer questions."Canon is currently offsetting the restrictions on take-away pieces by promoting its Web site on its packaging, advertising and in-store materials. On, the Web, the company can list all specs and benefit copy.The Internet also offers potential for creating better and more interactive merchandising displays, says Microsoft's West. The company is currently talking with retail accounts about setting up networked joy-stick displays that allow customers in different parts of the country to compete against each other in real time on video consoles. "It's a compelling way to let customers experience the game situation," he says. "Once you're connected to a network, you can obtain a wealth of information about how that merchandiser is performing, how its performance relates to sales in other stores, and how long customers spent playing the game. And, probably most important, we can check to see if it's still operating or if it needs maintenance. Intel-connectivity will change much of what we're now doing."3Com's Underwood agrees that merchandising will continue to play a key role no matter how the category evolves. "We really want to own the digital home. To do that, we have to provide effective customer solutions that are easy to use and understand."As with everything else involving technology today, changes will continue to happen faster than anyone anticipates. "It's all happening so quickly," Logitech's Chapuis says. "The things I'm doing for retailers today are things I expected to be doing over the next two years."

Computing P-O-P

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