Meeting Hardware P-O-P Guidelines

P-O-P is a hot topic for companies that sell their products through home center and hardware outlets. For one thing, new requirements are being enacted by the top two home improvement retail giants -- The Home Depot and Lowe's. These requirements restrict in-line P-O-P materials to exact specifications. In addition, the diverse needs of other retailers in the industry are forcing product marketers to focus more on store guidelines, display flexibility, packaging options and communication techniques when offering merchandising programs."Home centers are taking P-O-P very, very seriously," says Karen Hager, merchandising operations manager for Senco Fastening Systems Inc., Cincinnati. "The retailers are putting the pinch on vendors to jump through hoops similar to what Wal-Mart and Kmart have done," adds Helen Fischer, marketing director at Baltimore-based Tenax Corp. Although Home Depot's and Lowe's programs vary in their approach, the goal is the same: to create a company-specific look that aids the consumer. The reasons for the restrictions are easy to understand, say vendors who recently returned from a Lowe's Marketing Summit where the retailer's executives discussed research that showed the average customer spent only about 30 seconds looking at signage during a shopping visit. Follow-up studies at stores where new sign standards have already gone into effect showed customers were spending as much as 50% longer viewing signage. (When contacted by P-O-P Times, Lowe's Cos. declined to discuss the new program, pointing to a speech given by Chairman/CEO Bob Tillman at a hardware manufacturers' conference in 2002 as their only comment. The Home Depot did not respond to a request for an interview by press time.)Simple Consistency RulesIn general, retailers are requesting that merchandising programs be geared to making product information and presentations more consistent and simpler, according to the product marketers interviewed for this article. Home improvement and hardware chains want less data on signs and more take-away brochures where information is spelled out. In some cases, they note, those brochures must feature the chain as the source of information by displaying the chain's logo and help-line information rather than the brand logo. The merchandising requirements focus primarily on size and shape of in-line materials, although in some cases the types and amount of product information is also limited. Since the programs are still being implemented category by category, however, some say they're not yet sure how they'll be affected.Some acknowledge that the restrictions make sense, at least in theory. "We all want to make a statement in the store," says Mary DaRif, director of marketing services at The Sherwin-Williams Co., Cleveland. "But in fighting to stand out, we've created total sign pollution. Retailers now want to keep customers in the store longer by providing an easier shopping experience." Joe Sbrocco, merchandising manager for G.E. Lighting, Cleveland, agrees. "Let's face it, customers are bombarded with messages every five feet, and this doesn't make it easier for them to shop. [Restrictions are] not a constraint for us because our name is going to sell our products, not the words we put on the sign. If I had 10 to 12 competitors like in cosmetics, though, it might be different."The acknowledgement that in-store presentations were becoming counter-productive when taken as a whole is leading many companies to take a proactive approach to the new restrictions. "We don't see them as restrictions so much as direction," explains Shelley Knop, marketing manager for Wagner Spray Tech Corp., Minneapolis. "We need to do what makes sense for [retailers] so they'll use the P-O-P pieces we produce effectively in their stores. They're aware that they need to do what's good for the brand in order to sell it, so at the end of the day I think we both come out okay." Even when retailers aren't pushing it, displays are being simplified throughout the channel, both in message and logistics. "The marketplace is becoming more and more competitive," says Knop. "We're aware that we have very limited time with consumers as they walk the aisle." That's particularly difficult for products such as Wagner's power paint sprayers, she notes. "Our category is not an easy read. We have to justify the need for our tool, so we have to do a strong selling job just to be part of the decision set. That means we need strong P-O-P, with signs that are clear and to the point about our benefits."Wagner also focuses on simplifying its displays from an assembly standpoint. "The more complicated the display, the less execution we'll get," Knop explains. "Displays are being simplified for space efficiency but also to make them easier to execute." Sherwin-Williams' DaRif agrees. "We are working very hard with buyers, but we also have to work closely with store operations managers," she says. "Those are two separate entities within the retailer's operation. My goal with P-O-P has to be two-fold. It has to sell the product to best advantage, but it also has to be easy to put together."Too Much Consistency?As retail merchandising requirement programs spread, some companies are watching closely. "We are concerned about the amount of consistency, and I'm sure our competitors are concerned, too," says Senco Fastening System's Hager. "As a customer, you get ideas in a general way about what you want to purchase from such signs, but getting down to the specifics of what makes our tools better can be tricky. The designs limit what information we can put on the tools to help customers make a decision, and in some cases that could cause confusion." Fortunately, both Home Depot and Lowe's have agreed to review their requirements in that regard, Hager notes, indicating their willingness to accept feedback. In a recent multi-brand tool project Senco captained for Home Depot, the retailer switched the display from an application-oriented format to a brand-oriented one because so many tool customers are brand loyal. "Both chains recognize that they need input from vendors and the vendors' ad agencies," she says. Being conversant with the restrictions is critical to success, vendors say. "If you work with them, you are guaranteed the placement you need," says Sherwin-Williams' DaRif. "If you try to buck the system, you'll have issues." Kate Sollecito, director of marketing services at Red Devil Inc., Union, N.J., agrees, noting that simple designs are one important element. "If you come up with a fantastic P-O-P display and you spend a lot of money developing, designing and printing it, there's a good chance you won't get it into Home Depot or Lowe's because they don't want something so elaborate," she explains. "They want simple."Sollecito sees both sides of the dynamic. "Being a creative person, I think the standards will restrict our creativity. But providing a consistent look is more pleasing to the eye and makes the store more appealing to look at," she says. "So I'm torn."Will Budgets Increase?One key area of concern in creating so many account-specific P-O-P materials is how these short production runs will impact the merchandising budget. One vendor noted that requiring certain higher-cost substrates, such as styrene, for some pieces has already created some additional expenses. Other vendors suggested that it would be more cost-efficient if the retailers took over design and production and billed back each vendor for its pro-rated cost rather than having each vendor produce its own similar materials. "If they're going to constrain us in what we can produce, it would be nice if they would manage it in-house," says one vendor, who asked not to be identified. "I don't mind paying my part, but if you're telling me how to sell my product and making me print my materials one specific way -- and everyone has to do it that way -- you should take over printing it." Target stores do handle production on some of these types of merchandising materials, one vendor noted. The mass merchant chain is also taking a stronger stand on making its merchandising presentations more consistent.Some companies aren't overly concerned about the added costs. In part, the size of the chains requiring these pieces is large enough to make the production runs higher and generate volume discounts. Others figure they will make it up by raising acceptance and placement rates. "To create these pieces takes a combination of being smarter about how we do it and ensuring that every piece meets the retailers' goals," says Wagner's Knop. "If we do that, we'll see greater placement and sales success, and that will justify any extra cost." Adds Senco's Hager, "The changes should help make the stores look better, but they will make us take a different view toward how we do things, especially in terms of budgeting, since we'll be providing some materials for only one chain." Gaining Off-Shelf SpaceOff-shelf displays aren't being restricted as much, but that still doesn't make it easy to gain placements. For example, Senco recently received case-stack locations outside the tool corrals at Home Depot stores only after it reworked its security-tag technology to locate the sensor inside the tool rather than inside the package. This ensures shoplifters can't open the box and pocket the tool. "Home Depot pushed for the change in the tags, and getting those placements has been big," says Hager. "We can put screw guns in the main aisle or over near drywall, and that helps a lot."Even when chains have specific rules for off-shelf display materials, there is good news to be found. In many cases, displays that are customized to meet the chains' rules, can also be used by smaller retailers. That means production runs can be expanded beyond one chain's needs. "Other retailers are easier to work with and don't mind receiving materials one of the big guys has already taken," explains Tenax's Fischer. "Generally, the smaller stores are more willing to take whatever we think will work best to help products sell." Flexibility and Organization RuleWith so many types and sizes of stores throughout the hardware and home center channel, retailers find they have to go with the flow. "Flexibility is absolutely the key to success," says Tenax's Fischer. Shippers for her company's lines of rolled plastic fencing and mesh netting for yard projects are being designed so that different package sides are legible when stacked vertically or horizontally, ensuring they help sell regardless of the retailer's racking choices.Senco marketers have created display signage that can be adapted for use on any size display. "We try to think modular as much as we can," Hager says. At Red Devil, Sollecito offers a menu of options, including trays of sealant cartridges along with a mini-pallet so they can be placed in a variety of locations.GE has begun developing a CD-based "catalog" of available displays, including floor and pallet units, that have been produced around the country for its products, says Sbrocco. "With smaller sales departments all the time, the hardest thing we encounter is trying to let our sales people on the East Coast know what's been done for an account on the West Coast," he explains. The CD will depict all displays with assortments and quantities listed. "This format will keep us from reinventing the wheel whenever a retailer wants new options," he continues. "Expense is always a concern, so you have to use your resources as efficiently as possible."Cross-Merchandising TightensCross-merchandising display options are being utilized wherever possible because product marketers and retailers are seeing the benefits. For Aearo Co., maker of AOSafety products, the benefits are noticeable. "Our 8-foot product set is not necessarily a destination point," explains April Noblitt, marketing manager for the Indianapolis-based company. "But if you put goggles or a respirator near paint or drywall, they sell very well." To take advantage of that, the company offers merchandising strips whenever possible. "We've been noticing more retailers taking advantage of that potential, so much so that they now have merchandising strip 'homes' that are designated for a specific manufacturer's products," Noblitt says. "And boy, you don't want to put your product onto another supplier's spot or put up the wrong product on your hook." In many cases, she adds, the size of the strip is based on the retailer's expected return on investment for each location and is included in the terms of the agreement."Initially, there was some overload as everyone did [merchandising strips], so now they're more standardized to clean up the stores and make them easier to shop," Noblitt says.Aearo is also borrowing a successful P-O-P approach from mass merchants for its fashion-oriented safety glasses. The company is merchandising them on spinner racks similar to sunglass racks used in mass merchants. GE's Sbrocco agrees that cross-merchandising consumables and impulse items pays off. "Some stores don't like it because it can become a mess," he says. "But we've seen product sales increase 50% for a store if the product is cross-merchandised well. We want to give consumers more than one opportunity to buy light bulbs in the store." Although GE has tended to use corrugated promotional displays that sell down rapidly for cross merchandising, the company is working to convince retailers that more long-term formats would be more effective. "We don't think a two-week display is the way to maximize the effectiveness," Sbrocco says. "But we realize we have to be careful so we don't overwhelm the shopper or cannibalize sales from the on-shelf product."Red Devil has found success with semipermanent cross merchandisers, according to Sollecito. The company's wire gravity-feed displays for its sealant tubes, which hang off the side of a display rack, are popular because signage can be switched easily and the display can be moved to a different department for another promotion or to gain additional visibility. "There are so many products fighting for space that you need to have something unique that can be used in a small space off the floor," he says. "That's the key."Other P-O-P OptionsIn an effort to get displays off the retail floor, Sherwin-Williams' DaRif is focusing on finding lighter weight materials for signage and promotional pieces that can be hung from the ceiling, off a shelf edge or on a wall. These options also reduce transportation costs, she notes. "I'm always on the lookout for more efficient ideas for P-O-P that not only provide faster assembly but also save on shipping and handling."P-O-P collateral materials such as posters and danglers can be as effective as displays that hold product. "We've become a lot edgier with our approach to banners, posters and buttons because the home-improvement consumer is getting younger," says Senco's Hager. "Especially in home centers, the P-O-P can be a little conservative." For instance, when Senco marketers were surprised by the positive reaction they received to a humorous campaign used at a trade show to introduce their new screw gun, they decided to take it to the field. The slogan was a take-off on the company's overall theme of "Hard Work? Bring It On." The screw gun's slogan became "Hard Work? Screw It.""After the show, we put it on some buttons and P-O-P pieces, and it got a huge response in stores," Hager says. "I was in a store and heard a customer talking about it with the cashier. How often does that happen?" That type of reaction is needed more often, she says. "We need to be a little different when we have a chance to display outside of the in-line presentation, as long as we're careful that we don't offend customers."Packaging Is ReliableA good way to convey a message when you can't rely on display materials being placed at retail is to print the information on the package. "We have to rely on our packaging to tell our story," says Wagner's Knop. "We know that it will be there even if none of the other pieces are, so we make the packaging the hero and let the P-O-P display serve as the stage that aids that story."GE's Sbrocco agrees. "We attempt to make the packaging into a salesperson. You can't write the Gettysburg Address on the front of the box, but you can use the back of the package along with shelf talkers and signage to explain the product." That's more critical with light bulbs these days, he notes, because while new bulbs are more efficient and produce more accurate light, they're also more expensive. Ironically, product marketers' control of their own packaging is also more limited today. In addition to retailer restrictions, there is the need to provide bilingual and even trilingual messages of equal size on packaging. This can eat into the space needed to convey the complete product message.Into the FutureFor the most part, product marketers seem to be remaining optimistic that recent changes will help them ultimately sell more effectively in all types of home improvement stores."It's all about having a good relationship with the retailer and ensuring you're on the same page about expectations," says Wagner's Knop. "I anticipate that the changes retailers are bringing about will result in stronger alliances of vendors who will determine how to make the overall category a bigger success."Sherwin-Williams' DaRif would like to see retailers make their merchandising standards available online. "We need to get stores uploading their operational changes so we're all aware of what they need. It's not a secret. It's necessary for everyone to know." DaRif also thinks more communication, even if it contains restrictions, will improve the marketplace. "As industries consolidate, we need to partner more," she says. "We have to sell the retailer as a brand to get the customers to the store, and then we can sell our brand once they get there. I've been at this long enough that my ego can withstand being given direction if it gets my P-O-P up in the store. I actually see less friction between suppliers and retailers now than in the past because we know that what we're producing will be used. And that's the goal."

Meeting Hardware P-O-P Guidelines

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