Electronics P-O-P Report: Selling a Brand Within a Brand

With the big box electronics retailers -- particularly Best Buy and Circuit City -- focusing more and more on branding themselves, consumer electronics marketers are fighting for more than shelf space. In some cases, they're fighting for identity. Brands today must work to fit within the look of the stores yet still maintain their unique look, and they have to juggle each chain's specific display requirements, too.In addition, electronics marketers handle more category-based dilemmas in promoting products that typically are either very heavy or very easily "lifted." And, they must consider the needs of a customer base that wants plenty of information and has a hard-wired need to experience their products.Doan Hoff, corporate manager of advertising and promotion at Yamaha Electronics Corp., Buena Park, CA, has seen the pendulum on consumer electronics stores' approach to P-O-P swing back and forth more than once. "There was a time when the retailers really counted upon the manufacturer to provide them with more P-O-P and more demonstration material," he says. "And then there was a period where they would rather do it themselves. Now it's back to more of a cooperative effort."Fitting in, Sticking OutStores want common visual themes without becoming completely cookie-cutter, says Peter Crifo, vice president of creative services for DirecTV, Los Angeles. "Each store has a branded look and feel. We're trying to work within their look and feel while still trying to stand out," he says. Put another way, "You want to feel like you're part of the family without being the redheaded cousin" but instead "the most attractive member."Colors, logos and other visual environmental cues have become more important to stores as they try to extend their own branding, says Mike Earley, merchandising manager at Hewlett-Packard Co., Palo Alto, CA. "As they're getting more into the service and support, they need to have their internal branding resonate with consumers," he says.Samsung Electronics America, Ridgefield Park, NJ, has engaged in various in-store initiatives with several different retailers to promote sales of MP3 players, says Mark Farish, senior product marketing manager. "Larger retailers such as Best Buy and Circuit City," he says, "have more uniform design standards and requirements for product displays that need to extend to hundreds of stores. With smaller specialty retailers, there is more flexibility in executing different forms of P-O-P." Farish adds that larger retailers continually test new designs and can prove equally flexible.When Hewlett-Packard wanted to introduce a configured ordered kiosk in Circuit City and CompUSA last holiday season (it has been installed in 625 and 228 stores respectively), marketing executives flew to Circuit City's headquarters in Richmond, VA, for a battery of demonstrations, Earley says."I think we had six different groups who had to sign off on it," he says, including visual planning, marketing and risk management. "It's important that you're aware of the [store] requirements. You have to do a lot of homework" on issues including the Americans With Disabilities Act. "We took the approach that we want this to be successful, and we want this to live on. By doing all the research upfront and making sure that the structure was acceptable to them, it made [the demos] go a lot smoother."The experience with CompUSA was similar, Earley adds, with slightly different configurations due to narrower aisle widths, usually three feet versus four feet in Circuit City, and the differing colors and logos. Aside from those issues, the kiosks could be constructed in one batch, he says.Brian Olsen, vice president of sales for national accounts at DirecTV, noticed relatively subtle distinctions in the space and sight-line requirements when rolling out a demonstration center for LCD televisions and digital video recorders to all U.S.-based Best Buy and CompUSA stores and more than half of Circuit City stores this year."We had different space commitments from each, and different objectives at the front end," he says. "People in each of those environments have something to say about the way the design fits into their particular store plan. If you're in a Best Buy store, you have a different feeling than in a Circuit City, and different again in a CompUSA."Hoff says store staffing creates different needs at mega-stores, such as who is available to sell or explain product. When Yamaha worked with Best Buy to create a home theater demonstration that was unveiled a few months ago, the company provided looped software so that "a customer could walk up to it and get a reasonable demonstration of the audio side of home theater," Hoff says, or "as much of a complete home theater experience as possible while standing at an endcap."What You Are = Where You GoMedia companies face a higher hurdle in approaching mass consumer electronics retailers because their products are relatively low margin -- but they face the opposite situation in office superstores, says Hollie Malinovsky, retail marketing manager at Charlotte, NC-based Verbatim Corp."It's just harder to get the space because being a consumer electronics store, they like to have higher price-point products," she says. "If you look at an office store, media is a higher price-point compared to pens or paper. The roles are kind of reversed in those markets. In an office store, we're a premium product. In a Best Buy, we're a staple."Other media com-panies report similar experiences in electronics mega-stores. Midway Amusement Games LLC, Chicago, which creates platform video games for several different systems, has found its space limited to category headers as well as larger displays in a featured area called the "racetrack" -- for titles worth paying the steep price, says Greg Mucha, director of channel marketing. "They're relatively expensive, and from a video-game perspective, unless you've got a 3, 4, 5 million seller, it's difficult to justify," he says.Electronic Arts, Redwood City, CA, which creates both entertainment software for computers and games for video platforms and hand-held devices, uses corrugated displays for certain launches at mass retailers but relies primarily on banners and signage, like ceiling quad panels that it placed in Best Buy, says Mary Macdonald, director of retail services. "When we were sending in things like standees, our execution was just never very good, and those things cost a fortune," she says.There are higher-volume exceptions: The June release of the PC product "Battlefield 2" was accompanied by a corrugated barrage of approximately 1,000 freestanding displays for Circuit City, 1,000 half-palettes for Wal-Mart and Best Buy, and 2,000 counter trays for such specialty accounts as Game Stop."This franchise has done really well," Macdonald explains, adding, "Wal-Mart is very specific in terms of what they will take," with specifications like dimensions and the number of units a display holds. "We've had to design our half-pallet to their standards, and then we try to get other retailers to take it."Among electronics superstores, Macdonald adds, "Best Buy isn't too much of a problem. They'll take pallets more so around the holidays. Circuit City, they've taken freestanding displays from us, as well. What you try to do is take advantage of the sections they already have and secure endcaps for a new release."Milpitas, CA-based PalmOne, which sells hand-helds, personal digital assistants (PDAs) and smart phones, has had better luck in office superstores, with "self-fixtures that are completely PalmOne branded," than in mass electronics retailers, says Teresa George, senior channel marketing manager. In CompUSA, where PalmOne is rolling out an inline display chain-wide for a new mobile manager product, the company's products are featured in the middle-of-the-store "corral," which includes a dedicated staff and a counter showcasing hand-held devices and other products.George has also noticed differences between mass retailers. "Best Buy is very specific as far as their focus in-store. They don't allow very many vendor-branded materials," she says. "Circuit City is a little more relaxed and allows us to put in branded materials and make design suggestions and proposals on their PDA requirements. They're still not as relaxed as the office superstores."Specialty OpportunitiesSmaller chains and specialty retailers provide a more welcoming environment, particularly for media companies, so long as those companies can find creative ways to fit within what is typically a smaller store footprint. "Places like GameStop, EB Games, those stores are much more open to new concepts, new ideas," Mucha says. "They provide you with a lot more of their own merchandising opportunities, such as endcaps and 'cash-wraps' that go around the cash register. They provide a lot more opportunities to merchandise your products."Midway mostly relies on standees and counter cards, Mucha says, but a spark of inspiration has led to a successful test in some EB Games stores on the East Coast. Called a "light violator" or "light thief," the merchandising piece is a 24- by 18-inch V-shaped piece of Mylar film cut so that it dangles from a light fixture and is backlit. "No matter which side of the piece you're on, you can see it," he says. "They're looking at adopting it as a standard P-O-P piece for their stores."Specialty stores can't compete on price and have had to find other ways to differentiate themselves, such as superior service, says Hoff of Yamaha. "There's a big diversity these days," he says, citing Good Guys, Tweeter and Ultimate Electronics. "They're going to find different ways to be profitable than a Best Buy or a Circuit City. Through custom installation services, they're differentiating themselves in that fashion."Drilling down to regional chains and specialty stores requires a sophisticated understanding of their customer bases, says Earley of Hewlett-Packard, who worked with Tweeter and Good Guys on a display for a 42-inch plasma screen television."Some of the regional [retailers] are easier to work with than the big-chain stores. It really depends on the program and the project," he says. "It used to be you could do a one-size-fits-all approach to in-store merchandising. That's changed. You've got to take it on a retailer-by-retailer basis, understand who their customer is and customize accordingly."Demos, takeaway brochures, and an educated salesforce are all key to succeeding in these environments, says Earley, who worked to ensure that the 42-inch plasmas were hooked up to a digital entertainment center. "Consumers can come over and interact with them," he says. "Here's a box that's pretty close to $2,000. We have to make sure the sales reps can articulate to consumers why they need this new technology."Regional chains allow for some vendor-branded materials, typically on a sliding scale depending upon space, George says. "Franklin Covey is very open to allow our input and allow vendor branded materials," she says. "Fry's [Electronics] is a little more closed; there's just not as much space."Requirements regarding look-and-feel vary widely depending upon what image a given regional retailer wants to convey, says Olsen of DirecTV. "There are some very high-end retailers, some of whom focus on creating a furniture-like atmosphere, so you get a living-room image. Some of them express a very high-tech image," he says. Inform MeHP has noticed a trend among consumers that helps it determine its in-store materials: noticeably more of them are undertaking online research prior to shopping in-store, with surveys showing an average of three to four websites visited. "We want to make sure we're telling a consistent message, so the consumer has the same information wherever they're going," Earley says, adding that also ties into education of store sales reps.Although consumers may be more educated than before when entering the store, Verbatim Corp. places a premium on ensuring those who have not researched a given technology can get up to speed in the shopping aisle, says Malinovsky. "Education's the biggest thing," she says. "Usually, we're trying to promote a new technology, something people don't think about or know about."We're just trying to educate the end-users and trying to get it in front of them," Malinovsky adds. "Media in general is a low-margin product. We have cost concerns. You have to design in mind for it to be attractive in graphics and education but still be cost-effective."Logistics, Cost & SecurityAnother priority in designing consumer electronics P-O-P that is no stranger to those in other market segments but also creates cost concerns: displays and merchandising that are delivered "just in time" and come out of the box ready to play."During the night, that entire thing gets shipped, with everything in place. Then it goes up on the forklift, lifted to where it has to be. The box is taken off. It's plugged in, and there you go," Hoff says. "That's the best for everybody concerned. It's also the most expensive and the most difficult."Larger component makers must account for the size of their products in designing displays with the needed size and strength to hold up. When designing a set like Yamaha's home theater display, with arms extended into the aisle, speakers firing downward, and a television monitor, Hoff says he sometimes feels envious of those in other fields."I see these cosmetic displays or golf-ball displays, and I say, 'Gee, that sounds so simple from a construction standpoint.' When you've got 60 pounds of product balancing on a platform, and then you've got arms over you holding surround-sound speakers, and then you've got wiring that is best hidden -- that brings some unique challenges. It gets more expensive because those arms can't be made out of plastic. They've got to be made out of metal. It's got to be more secure and consumer-proof."While DirecTV's own products don't weigh that much, the displays for them require similar attention to weight, Olsen says. "Our inventory is not dependent upon the structure of the display itself. The demonstration products themselves weigh very little," he says. "The TVs are typically mounted to the superstructure with brackets. The displays have to be appropriately heavy. Durability and safety are obviously important," which he says "absolutely" adds to their budgets.Adds Crifo, "The superstructure is very strong because the retailer doesn't want anything to fall on the consumer. You have to consider a liability situation."Hewlett-Packard has found that retailers almost always create their own larger, heavier fixtures for products like televisions. "Overwhelmingly, the spaces for things like TVs are fairly well-defined," he says. "They have those areas dedicated. You pretty much have to go learn to play within their space. These [products] are heavy, but [displays are] designed to withstand even the retail environment."Another challenge that's more acute in consumer electronics than most fields but affects those who sell media and other lighter products is how easily they're stolen. For video game companies, that problem sometimes extends to the displays themselves, says Mucha of Midway Amusement Games. "It's funny you should ask that," he says. "It depends upon the unit itself. 'Mortal Kombat,' there are quite a few of those that tend to walk away." He adds that the company suspects store employees do the stealing, since "it isn't easy for a consumer to run into the store, grab a 54-inch standee and run out.""If a particular store manager thinks something is cool, they'll put it up," adds Macdonald of Electronic Arts. "Or, who knows, they'll take it home."Retailers protect against theft of the products themselves in different ways, some of which create problems of their own. Best Buy and Circuit City put products out, while stores like EB and GameStop put empty cases on display. Customers must bring those to the counter to have them filled, Mucha says. Wal-Mart, Kmart and Target keep everything behind glass. "They have to find an associate with a key," he says. "It does have a negative impact on sales, no question."Electronic Arts experiences theft problems with video games more so than PC software, Macdonald says. "We do strive to try to get our video game products out from behind the glass in some of these retailers," she says. "If the product is behind glass, they can't even really put their hands on it, look at the packaging, look at the features. It really is a hindrance for sales." The best solution is to source-tag them, she adds.PalmOne designs its displays with pull cables, security cords or other attachments depending upon a retailer's desires, George says. Some chains prefer dummy units rather than live ones, and some put dummy units in high-crime areas only, she says. Most retailers place products priced at $200 or more behind glass, she says."Then, you need to rely more on brochures and signage because the customer can't pick up the package and read about it," George says. "It's a challenge for our packaging. Our products are small. They're created to be carried in the palm of your hand. It would be easy to walk out of a store with one. We make sure [the packaging] is hard to tear apart."Hewlett-Packard secures its notebook computers in cases, Earley says. "You can't let those lie around, or they won't be there when you get back," he says of notebooks. He adds that wireless mouse displays do not contain security because "I could never figure out how to secure a wireless mouse without a tether on it, and that kind of defeats the purpose."While theft is not a major issue for DirecTV's products themselves, "remotes are always vulnerable," Olsen says. "It seems that no matter what the technology comes up with to thwart that, people take them anyway."In creating its home theater display, Yamaha made sure to screw on speakers so they couldn't be moved, securing the DVD drawer with a small plastic strip so the disc can't be taken out, and attaching the remote control for the TV, Hoff says."That being said, they'll find a way to get that disc out," he says. "Generally, you run a good chance of losing that remote, too. There's no point in somebody taking the remote, but they do. If you're going to demo your system, you're going to take a chance of losing part of it."

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