P-O-P Logistics: From Design Studio to Retail

Marketers are paid to focus on the creative elements of in-store displays, but equally important, they have to pay attention to the nuts and bolts of display setup and logistics.These back-office functions include pre-packing displays, warehousing and delivery, setup and installation, post-setup store checks and field measurement, and tearing displays down once a campaign has concluded. Some prefer to keep such functions in-house, others contract them out, and many do some of both."If something's outside their norm, it's beneficial to contract out," says Peter Tulisaari, vice president of sales for King Solutions Inc. of Rogers, MN, a third-party vendor that specializes in transporting and warehousing, which becomes necessary when a display is ready too early. In some cases, "I'd be competition for their jobs," he says, but in others, "Transportation might not be their core competency. Their warehouse space might not be there."Bill Davis, president of Retail Project Managers Inc. (RPM), Schaumburg, IL, which handles all aspects of logistics, says hiring one company to do everything from soup-to-nuts clarifies accountability. "I don't know if I would try to use a word like, 'paradigm shift,' but we really have reordered the logistics when it comes to P-O-P delivery and installation," he says. "We looked at the entire process that created risk for the consumer goods company, and we tied all those processes in, upstream and downstream, so that the risk of delivery and the timing of delivery, and the final verification rest with RPM."LogiSys, Walled Lake, MI, handles everything "from the manufacturing point on: delivery, installation, and then using TotalTrak, our Web-enabled proprietary system, managing the project," says Bret Haewski, vice president of sales and marketing.Hub Group Inc., Downers Grove, IL, provides "the ability to outsource the whole project management to one party," says Kevin Lee, vice president of logistics. "We're able to coordinate the electricians, the folks that run plumbing, the interior and exterior sign people, building permits, carpet layers, specialized trades that need to go into these fairly large installations," he says.Lee says companies who outsource tend to be concerned about well-timed, nationwide rollouts. For example, he says, "Folks in banks want to make sure displays are up during tax time. They're not looking for the bank tellers or managers to make sure this work gets done."Do it AloneSome companies prefer to handle everything in-house. BSH Home Appliances Corp., Huntington Beach, CA, works exclusively with Best Buy to merchandise its stores for Siemens brand appliances, says Andreas Otto, associate brand manager. "We have a force of merchandising representatives based throughout the United States. Their responsibility is first to merchandise the stores, to make sure that all the product looks good, that all the P-O-P is set up properly, and offer to replace P-O-P if it is broken or in bad shape. They have a trunk stock of all the P-O-P."Best Buy's store managers are also charged with handling set-up and maintenance, Otto says, but in practice it ends up being a joint effort.Redmond, WA-based Nintendo of America uses its internal force for most accounts in most situations, says Bob Stoik, director of merchandising. But they use outside help in remotely located Wal-Mart stores -- as well as for instances like physically demanding set-ups and multi-location product demonstrations.The company has a 150-person division that works to place permanent and temporary P-O-P, educating store managers and restocking displays in 11,000 retail locations, mostly mass retailers and electronic specialty stores, Stoik says. "We don't service all accounts out there," he says."We're hiring somebody who can deliver good public relations, and yet has the skills to do display maintenance," Stoik adds. "The person doing that isn't always the person you want doing a full-scale gondola re-set at Toys 'R' Us. Most recently, we wanted to do some product demonstrations for one of our products, and we wanted to do it in a large number of stores on a specific Saturday. It was well beyond what we had the numbers to do. There are specialized forces just in doing product demonstrations, and they're pretty good at it. They hire people who are gregarious and outgoing."Other product companies contract out certain functions for all accounts. Rocky Shoes and Boots, Nelsonville, Ohio, which handled everything in-house until last year, has contracted with RPA Worldwide not only to design and develop displays but to provide a floor plan for a sub-store "Rocky shop" in 150 independent outdoor and sporting-goods retailers, says Joe Hanning, marketing director for Rocky."RPA does the drop-shipping for us out of a warehouse in Columbus, Ohio. They'd pack them, they'd ship them," he says. RPA also outsourced the display construction to Tusco, a Cleveland-based metal display dealer. Once the displays reach the store, though, Rocky's sales reps take over, he says.TaylorMade, Carlsbad, CA, relies on manufacturer Black Box Products of Portland, OR, to take care of display packaging, while another third-party vendor, Pro Image Installers Inc., Navarre, FL, handles installation and teardowns, says Christa McNamara, U.S. trade marketing manager for TaylorMade. "They do the initial installation and make sure it's up and ready to fill with product," she says. "Our reps fill and maintain it."It Takes CommunicationCompanies that work with third-party vendors to one degree or another report varying challenges and problems. One that simply comes with the territory is figuring out how best to work in concert with the display manufacturer and the third-party installer to coordinate shipping and scheduling.Stoik says Nintendo usually has displays shipped through its facilities, "but there have been times when we're in a time crunch, where we've had to have our P-O-P vendor ship directly to the merchandising force," he says. "They're accustomed to doing that, anyway. Most of them have their own fulfillment service built right in, and they're better at it than we are. It's more costly, but sometimes, it's worth it."The fact that RPA has itself subcontracted to Tusco makes for a smooth process, says Hanning of Rocky Shoes and Boots, which worked directly with display manufacturers in the past. "They helped us with quoting it out, getting the pricing and nailing it down," he says of RPA.Retail Project Managers (RPM) tries to get involved early in the process to help avoid problems later, Davis says. For example, "most P-O-P manufacturers, for simplicity, will assemble the entire unit and ship it so that it can be installed easily on the retail floor space," he says. "That creates tremendous packaging costs, sometimes up to 20 to 30% of the value of the product. It also means you're shipping a lot of air. "King Solutions helped coordinate a particularly complex display for Lowe's Home Improvement Stores about a year ago that brought together paint companies Valspar and PPG, Tulisaari says. King brought together all the components from seven different vendor addresses and assembled truckloads of the 24-foot-long fixtures, he says. Then King stored the pieces until one to two days before scheduled installation.Without the use of a third party in such a complicated situation, "How do you get the components to show up at the store at the same time?" asks Roger Ball, general merchandising manager for Valspar Corp., Minneapolis, which hadn't used an outside vendor before. "They never missed one date. We were under a real time crunch of speed-to-market. The logistics piece was probably the piece we worried the most about."Indianapolis-based Finish Line has used multiple vendors and coordinated through third-party companies, says Kevin Flynn, senior vice president of marketing, but it's not always the fiscally prudent solution. "The company that prints a large banner most efficiently is not the same company that prints your 3-D pedestals. Often we have different vendors for the same project," he says.When Nintendo uses vendors for set-up and installation, communication is critical, Stoik says. "I could tell you several stories of things just not getting done, or the reliability of their information that they're sending back to us is sometimes poor. The result is a display that's not set up properly, or not set up safely.""The only challenge thatreally comes is the communication from the retailers, not having the lead times on schedules for the closing of stores or the opening of new stores," says TaylorMade's McNamara.Lee says Hub Group often runs into changing time-lines, which he says is probably unavoidable. "It's kind of hurry up and wait. It's the nature of the [retail] business. It's not a knock against them."Store Checks a MustWhether or not they work with third-party vendors, all product companies face the twin challenges of store checks to make sure displays have gone up -- and remain up -- along with dependable measurement of their return-on-investment."We monitor our reps on a regular basis," Stoik says. "Even if we hire a third party, we go out and monitor them. If you don't, you never know what you're getting." To measure sell-through, the company places a UPC on all its P-O-P in addition to the products themselves."If they're pulling six 'Resident Evil' from the back stockroom, we ask them to scan it," he says. "I know how much product they have up there, and I even know P-O-P. I won't kid you, that's only as reliable as the rep we have scanning. It gives you a ballpark idea as to what the heck is going on at retail."Rocky Shoes' reps visit stores about once a month to make sure displays are up and to remerchandise them as necessary, Hanning says. The company does not undertake systematic field measurement, he adds. "That was an extra, added cost that we chose not to go with. RPA offers that service. We just told our reps, you'd better get your butts in there once a month."BSH Home Appliances assumes its Siemens reps visit their respective Best Buys about once a month, Otto says. They make sure the literature dispensers on the brand's endcaps have been refilled and train the stores' salespeople on their products.TaylorMade's reps try to visit stores once a week to make sure displays are filled, McNamara says, and one of the company's finance analysts uses an ROI program to produce a report that measures year-on-year sales once a display has been up for a year. A month-on-month analysis can provide an early estimate.Valspar also follows a once-per-week schedule, Ball says, which is important given the need to restock take-home color selector palettes. "Our folks are constantly monitoring the take-home chips and making sure we have adequate inventory," he says, adding the company does not use specific technology to monitor ROI.Brand Truth, Seattle, encourages its clients to become more strategic about measuring return-on-investment of visual merchandising, says Steve Bosch, company president and co-founder. "If you look at the way these brands are run and managed, they manage every part of their marketing and sales functions very systematically. The one thing they don't monitor very well is retail execution. There will be a change on this," he says.RPM provides Web-based photo verification that displays have been placed and monitors sell-through when asked, Davis says. "There is no doubt that that P-O-P was placed," he says. "Anybody can go in, particularly the person who's paying for the project, and say, 'There it is.' "LogiSys' TotalTrak system works similarly, Haewski says. "We take digital photos, and they're uploaded into our system," he says, so clients have proof of placement.There are third-party contractors that specialize in various points in the supply chain. Bosch says his in-store performance measurement firm works with companies that have employed "a headquarters management strategy where you have a limited number of field managers relying on second- and third-party detailer entities" for store checks and field measurement."We're really the eyes and ears of the leaders of major brands out there in the field," Bosch says of his company, which audits retail execution. "You have leaders of major brands out there basically operating in a kind of shadow reality. They get retail execution intelligence that's intermittent, biased, non-comprehensive and not actionable."

P-O-P Logistics: From Design Studio to Retail

P2PI MEMBERS

JOIN P2PI

Related Topics

Related Images

Business Topic

Company