Retail Knowledge Equals P-O-P Power

The good news is that nine out of 10 retailers are using the same amount or more of manufacturer-supplied P-O-P materials. The bad news is that more than half of them think P-O-P manufacturers don't understand retailers' needs.These are the key conclusions of a major study by Yankelovich Partners that assessed the current state of retail P-O-P. Results of the proprietary study were revealed for the first time at a P-O-P Show seminar titled Retailer and Consumer Promotional Motivation."The statistics on retailer use of P-O-P are really fantastic news," said Holly Roper, manager of Promo Edge's Retail Research Center, Menomonee Falls, Wis., which was one of the study's 13 sponsors. "It means that, in general, we're doing the right things, and display materials are being used at retail."The problem, she said, is that the industry must work even harder to understand retailers' needs to ensure that displays are used. According to the Yankelovich study, 92 percent of retailers accept manufacturer-supplied displays, but on average only 65 percent actually set them up. Roper noted that displays often are the wrong size or height, aren't sturdy enough or don't meet a retailer's standards for quality and durability."More than half of retailers surveyed say manufacturers don't understand their needs and strongly agree that manufacturers spend too much on promotions that don't work," Roper said. "Those are very frightening numbers."What retailers want, she said, is P-O-P that works -- 84 percent want to increase their promotional effectiveness, and 97 percent said promotional efficiency and effectiveness are key issues they face today. "One of the best ways to address these issues is joint cooperation," Roper said. "Among retailers, 52 percent say help in developing promotions is critical, so if you want to develop P-O-P that not only gets placed but also works, you must work in tandem with retailers."For retailers, an effective display is one that generates incremental sales that are noticeable in the absence of any other promotional vehicle (including temporary price reductions). They define "noticeable" as at least a three percent jump in sales volume -- a far stricter standard than that sought by manufacturers.But retailers also want efficient consumer response (ECR) from their displays. They define ECR in four ways: efficient replenishment (replacing products in a timely manner and continuous cycle based on consumer purchases); efficient promotion (promoting the products consumers want to generate incremental volume and a win-win situation for retailers and consumers); efficient assortment (having the right assortment of products on the shelves); and efficient new item introduction (the ability to bring new items to market and ensure timely, coordinated distribution).On average, 76 percent of retailers say efficiency is critical today. "But efficiency became the number one concern when we asked retailers about the future -- 85 percent say it will be critical then, which is a 9 percent net jump," Roper said. "The bottom line is, promotions are vitally important to the retail trade and are getting more important every day. The key to both effective and efficient promotions will be knowledge of retail acceptance and the effectiveness of various P-O-P vehicles."The study's results suggest some areas manufacturers should concentrate on when creating promotional campaigns. For example, signage should be considered seriously for any promotion but particularly for convenience stores. While acceptance of signage varies from 72 percent to 80 percent among supermarkets, drugstores and mass merchants, it's a whopping 95 percent among convenience stores.Another popular promotional item is instantly redeemable coupons (IRCs), whose overall acceptance among retailers is 82 percent. "Consumers like them because they offer dual savings," Roper said. "Shoppers not only save money, but they save time."Floor graphics offered the most startling data. Their average acceptance rate is only 44 percent, which Roper attributes to their relative newness. "But they will be used much more in the future," she said. She cited data from an independent study sponsored by 3M Co., which showed that, over a four-week period, floor graphics caused a 259 percent jump in unit sales and raised an entire category's sales by five percent."With results like that, acceptance levels will continue to climb," Roper said.

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