P-O-P Purchasing: What Lies Ahead?

Does the future hold one buying approach that will dominate the industry? Are partnerships the wave of the future, or will marketers decide competitive forces require open-bid situations to achieve the best creative and lowest price?"I see the market splitting more than ever," says one leading display producer. "It seems companies are focusing on one vendor more often or seeing anyone, any time. There's less loyalty in the market, because companies are being less loyal to their employees. Vendors are feeling that attitude."Downsizing trends and competitive pressures are making many evaluate how effectively they do business. At Heublein, for instance, marketers have made significant changes in how the company buys displays, particularly promotional items such as corrugated and wearables, says the company's Penny Cleare, director of merchandising services, purchasing and production. "We've created a vertical structure to simplify communication between marketers and purchasing to target cost savings." But the company stops short of committing to a partnership, although she has talked over the idea with some prominent P-O-P companies who promote that approach, she says. "Our needs are so diverse and changing that I don't want to limit the options that way long-term."As budgets tighten and staffs shrink, more marketers will rely on outside help more often, notes Laurie Houlihan, director of promotional purchasing at L'Oreal. "Budgets are smaller but the demand to do as much is still there," she says. "Lead times also are growing shorter, and that puts more pressure on suppliers to produce."As a result, marketers in the future will be looking for three key attributes from their suppliers, notes Nick Romano, ceo at F. O. Phoenix: size and financial stability; wider experience so fewer vendors are needed; and emphasis on long-term profits over short-term gains. "Those trends encourage long-term relationships, not project approaches."But that doesn't mean that partnerships will dominate, most agree. That commitment doesn't fit every client's needs, due to the size of their programs or the type of programs they run. "There is going to be a lot of merchandising bought in the traditional manner, and it will be very creative," agrees Richard Nathan, ceo at RTC Industries, which focuses on partnership marketing. "A lot of it will be award-winning stuff, and we applaud that. But we think there's a better way for us and for some marketers. We think we can offer a uniquely skilled organization to fulfill a larger need other than providing material for a project."

P-O-P Purchasing: What Lies Ahead?

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