P-O-P for the PRO

P-O-P is so closely associated with consumer product marketing that it's easy to overlook just how much display activity now is directed to professional customers. One example is electrical wholesale distribution. Just a decade ago, the idea of P-O-P aimed at licensed electricians was shocking. Today, it has become essential, with giants such as Square D Co. jumping in with new display programs and packaging upgrades.But this revolution in merchandising essentially began with one company, Sycamore, Ill.-based Ideal Industries, a manufacturer of professional-grade tools and supplies that are sold through 3,500 electrical wholesale distributor locations across North America. In the opinion of one electrical wholesaling magazine, JoLynn Rogers, Ideal's merchandising manager, "more than any one person in the electrical business ... taught distributors how to use merchandising to increase sales."Risk TakersSoon after Rogers joined the company in 1986, Ideal took a huge financial risk, sending out the first configured displays (a gondola system for wire connectors) in industry history. Rogers says merchandising was necessary to fend off price-cutting competitors: "We are a very well-known company and electricians ask for us by brand. However, the way electrical wholesalers were originally set up, all product was behind a counter on a warehouse shelf. When a customer asked for a product and there were two brands, the counter person chose the brand. It might be the one that was more convenient to grab at the moment, or the one he felt he might make more money on. The choice for the customer wasn't there. Our intent was to supply basic displays to get the product out front so the customer could choose -- knowing full-well we had strong brand preference."The gamble was tested through an industry-wide survey that is conducted every two years. Ideal's already-strong brand numbers went up significantly. But before Ideal could expand its efforts, distributors had to be educated in basic merchandising techniques.Ideal opened a training center at company headquarters in 1989. Today, distributors come from all over North America to attend Roger's free day-and-a-half-long classes that include six hours of lectures in Ideal's auditorium followed by hands-on work in its 1,500-square-foot training store. "The average gross profit in an electrical wholesaler is 21 percent," says Rogers. "When it is well-merchandised, however, we expect profit margins in the range of 32 percent to 36 percent. So the distributors who come into the training center expect to learn how to sell all of their products better. If an outlet is healthy, our sales are healthy. There are a lot of electrical manufacturers now out there supplying displays who don't understand the customers. They'll offer blank gondolas and expect the distributor to understand horizontal or vertical merchandising, or to know where the sign should be placed."Rogers covers the basics such as seasonal merchandise and complementary products, and she critiques the look of the distributor's store. "I liken my job to calling somebody's baby ugly," says Rogers. "In my presentations, I show pictures of Gap stores and Auto Zone stores. I say, 'The same customer that you are waiting on at noon is going here at 5:00 p.m.' There are only so many disposable dollars out there for Gap clothes as well as tool belts. Everyone is our competitor."This fall, Ideal ran its first-ever Excellence in Merchandising awards program. Rogers brought in executives from consumer marketing giants Barton Beers Ltd., Duracell, Honeywell, Sears and Sherwin Williams to judge merchandising displays created by distributors. The winning entrants were published in industry trade magazines.Ideal now offers a host of endcaps, wall units, counter displays, racks and dispensers, in both permanent and temporary materials. Rogers works with a diverse base of suppliers including RTC Industries, Menasha Corp., Chicago Display Co., Southern Imperial Inc., Wire Masters, Fasteners For Retail Inc. and Semco. "These companies have been willing to go out and look at the specific environment we're working in," she says. "That's the kind of help I need."Ideal has succeeded, so much so that electrical wholesale distributorships are now larger, more professionally-operated and crowded with competitor displays. "Today the struggle is to keep our percentage of space," she says. But Ideal isn't resting. This fall, the company began updating the look of its 1,200 P-O-P packaged products. The logo has been redesigned, there are more sell lines on the front and bilingual instructions on the back.Consistency is EverythingOne of the companies elbowing its way in for display space is a giant -- Square D Co., Palatine, Ill. The company offers electrical distribution products for residential and commercial applications as well as automation control products for industrial applications. "We are both the price-premium and market-share leader," says Steven G. Pollis, manager, merchandise marketing. "That's a real oxymoron. We represent on average 20 percent of a wholesaler's sales. To do that, you'd better support it, and you support it by looking like the leader."In the face of competition from price-cutters, Square D initiated a program two years ago to enhance its brand with multi-color packaging and new merchandising tools. "The Square D logo is the most powerful logo in the industry, and we have a network of 1,500 distributors that is second to none. Everything we try to do now in graphic imaging is consistent from our packaging and our display headers to our new lighted store signage."In the past, Square D's decentralized operation had caused it to produce an "undisciplined" array of packages. Whenever an engineer at one of its factories would design a new product, he'd also create a custom box for it. "This is a mature, operations-oriented industry with a lot of engineers who focus more on code changes than on marketing," says Pollis. "We're a big ship to turn around. But packaging is your only guaranteed form of advertising."Phil Brenner, Square D's manager, merchandise communications, went to every factory to coordinate the packaging effort, finding cost-savings in the process. "At one time last year, we counted 85 different label sizes in our company," says Pollis. "Now we have it down to 12 labels, which allow us to do a huge amount of purchasing consolidation. We changed our label printing equipment from pre-printed to on-line, so now we can buy tons of raw stock, and leverage the price and volume. So even though we went to a multi-color label, we're saving money."Square D's primary merchandising arsenal includes headers, shelf extenders, mobiles, aisle signs and banners. But the jewel is the new Highlighter Menu Board. The 8-foot-wide by 22-inch-high backlit sign features transparency panels as well as an alpha-numeric lettering system for customized messages."The idea here was to offer them something that looked more professional," says Pollis. "It wasn't uncommon in the past to see strange things like T-shirts taped up to lights. I limited the Highlighter to Square D's blue and yellow, so even if the wholesaler is not using it to advertise my product in words, my image is there day-in and day-out."More than 230 Highlighter Menu Boards have been placed through outright purchase by wholesalers, via co-op dollars or by buying special merchandise. To date, $380,000 of non-traditional product sales have been driven this way, Pollis says.Yesterday's contractor might have howled about all this "fancy" marketing, complaining that it must add to a product's cost. "But in the 1990s, the guy that buys an electrical panel is the same guy who buys a Pepsi," says Pollis. "He looks for quality, brand preference, consistency, top-line awareness. He's at Target on the weekend; during the week he's at the wholesaler. The same buying behaviors are instilled in him."

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