Simplifying and Organizing with P-O-P

Is this a sign of the times? This month, marketers at Senco Products Inc. will unveil a new shipper "box" for the company's DuraSpin cordless screwdriver that will also be used as a floor display in The Home Depot stores. The four-color shipper box is highlighted with product graphics and a case top that folds back into a header. Inside each box are four tools in their cases, with package wrappers that depict each tool and detail its features. The shipper is designed to be stacked as high as desired, with the top one cut open to display the screwdrivers."We're thinking this is a vehicle that can be used for any of our tool products," says Karen Wilt, merchandising operations manager for the Cincinnati-based company. "The format costs less than creating a large exterior corrugated display frame, and it makes it easy to get the products to the display floor. The Home Depot is very positive about it and said it was the best one they'd seen for this format."The display encapsulates several key display trends in home centers this year: ease of assembly, volume in a compact space, an emphasis on education and application photos, and the need to make packaging serve as a merchandising aid. All of these are at the top of the marketers' and buyers' minds as they try to organize and simplify the complex job of leading customers through the buying process.D-I-Y P-O-PHome centers can be confusing places to shop. Not only do the big-box stores that dominate the category offer a huge array of products, but customers often aren't certain what products they need or which offer the benefits they require. And with store numbers growing as the labor supply dwindles, retailers must educate both the consumer and the salesperson -- while keeping the information simple and organized."Good, effective communication is critical, and graphic design is critical," says Wilt. "It has to be eye-catching, but it can't be too pretty because it has to fit the warehouse look. And with huge employee turnover, we have to ensure that we are providing materials that tell the customer what the differences are as well as train the employees in those differences."That's a particular challenge in commodity lines or categories with many small, specialized parts. "Our category has been a traditional basic for home centers," says Kim DeRuby, consumer channel marketing manager for Pass & Seymour Inc., Syracuse, N.Y., a maker of electrical components such as wiring, boxes and receptacles. "But now they're allowing us to look at how we can 'wow' customers and entice them to purchase more so we can sell to more than contractor and industrial markets."Educating consumers in stores where dual contractor/consumer markets shop can be a difficult challenge, she points out. "We need to explain the products to consumers without sounding patronizing to contractors who are shopping the same store." To achieve that, the company has introduced a modular Smart Set planogram system that can merchandise 4 to 32 feet of products with identification cards and application photos. Channel strips also contain samples of the products to allow customers to identify and touch them.Broan-NuTone LLC is also looking to translate exhaust fan product features into options that will be understood by customers, says Bob Brudzinski, vice president of marketing for the Hartford, Wis.-based company. Rather than focusing on obscure measuring units (such as levels of motor power), the company now stratifies its products by the sizes of rooms in which the fans will work best: powder room/half bath, full bath, master bath with whirlpool, etc. Previously, the technical data told which product was most powerful, but that didn't translate into a buying decision."Consumers become confused with numbers," Brudzinski explains. "They understand the progression but not which level is best for their application. At that point, they're not willing to make a purchase." The displays enhance these room applications through color coding. The company has also retrofit many of the displays for its fans, door chimes and range hoods to provide operating samples of each that indicate how loud the chimes are and how particular lighting units work.Upselling ConsumersThis approach emphasizes the potential for upselling customers to units with more features that better suit their needs, Brudzinski notes. "Home centers are having success trading up consumers to better lines in some categories because their expectations on price levels are higher," he says. "As a result, we've modified some of our product mix to provide a better variety of products at the higher end. In some lines, driving down the price has led customers to perceive a lowered product quality, and they aren't looking for that trade-off."Red Devil Inc., Union, N.J., is also finding nuances within the traditional upselling approach, says Kate Sollecito, creative services manager. "We use the good-better-best format to help steer the customer to the appropriate product, but an upscale caulk is not always the appropriate one," she says. Higher-end silicone caulks, for instance, can't have paint applied to them, which may be a key project requirement. "We need to explain features at each level and ensure that the differences are explained so the customer finds the appropriate one."Pass & Seymour, wary of good-better-best assumptions for its electrical products, thought its previous descriptions by channel were too limiting. The company recently changed its Residential, Commercial and Industrial labeling progression to Standard, Premium and Heavy-Duty to focus more on types of applications.Organization Is CriticalOrganizing a host of pieces and products poses challenges, both for customers trying to discern differences among options and for employees trying to restock or straighten up facings. "Home centers are looking to us, as vendors, to manage the category," says Larry Broderick, president of The SteelWorks Corp., Denver, which makes metal hinges, fasteners, brackets and sheet metal. "They want their vendors to provide merchandising that is both customer- and employee-friendly, with a good bit of information."To accommodate that, SteelWorks provides various merchandising bins that offer specific slots for each SKU and labels with descriptions, pricing, bar codes and SKU numbers. "These formats make it easy to straighten up the rack and replenish stock. Every SKU has a bin and every bin has a label." There's also constant pressure to provide more information on the bins, Broderick notes. "We have to focus on project orientation and explain the products' uses."But home centers also don't want that explanatory material to take up selling space, marketers agree. "It can be tricky if they have a lot of vendors in the category," says Red Devil's Sollecito. "We have to find a way to create signage without making the aisle look cluttered when everyone has their own materials in place."Complicating that process is the trend of each store requesting materials that fit its own decor. "The key for store buyers is conformity to their look," says Mary DaRif, director of marketing services for the consumer group at The Sherwin-Williams Co., Cleveland. "Retailers have become their own brand, and they look at the stores as needing to have consistency. They are developing signage restrictions so the stores avoid having so many different designs and pieces in the aisles."Category Captains GrowingThat approach ultimately leads to category management, with one vendor spearheading an overall merchandising design throughout the category, regardless of how many vendors are included. Several home centers are already taking this approach in some categories. Many suppliers see advantages, despite the extra work it entails for the category manager."The consistency of the presentation is important, and this approach cuts down on the sheer number of pieces that are up, as well as ensuring that comparative features are shown," explains Senco's Wilt, who heads up a category-management program for fastening tools at The Home Depot. The company took over the program three years ago. It tweaked it again this summer with new materials after a change to a tether system for pneumatic tools opened up new possibilities.As category manager, Senco presented a format and graphic design, which The Home Depot approved and then sent to other vendors for comments. When everything was finalized, the vendors sent merchandising copy and photos to Senco to coordinate the printing. "There are a lot of logistics required to make this happen," admits Wilt, but the advantages make it pay off. A key one is that all involved vendors received a substantial printing reduction due to ganging all printing materials at one printer. For its part, Senco receives the major input on the graphic design as well as closer communication with one of its key vendors.Red Devil undertook a similar program and responsibilities at Lowe's. "We don't benefit directly from being in control because they decide the products and planogram," says Sollecito. "But it allows us to control the graphic design and work more closely with our account." Not all retailers designate a vendor to head the process, she notes, citing Sears Roebuck as one that prefers to handle the management in-house. A chain's desire to extend management this far also varies by category and the number of vendors involved.VMI Interest ExpandsThe closer vendors work with their accounts, the closer they come to providing true Vendor Managed Inventory (VMI), in which stocking levels are automatically replenished based on set criteria, few retailers have reached that point, but some are closing in on it. "The big home centers want as much in-store service from us as we can provide," says SteelWorks' Broderick They want us to straighten out our racks, count it up, restock it and adjust inventory."SteelWorks is close to VMI with some accounts, he says, providing services that include maintaining displays, checking inventory levels, placing the store's replenishment order, providing advance-ship notices, and invoicing for product shipped. "We're moving in that direction with several accounts, but some are very cautious about turning that control over to their vendors." Most often, he notes, it occurs with hard-to-manage categories such as fasteners. "In power tools, it's less necessary to have the vendor managing things."A number of chains definitely are curious about the advantages of VMI systems, agrees Earl Rowland, category manager at Owens-Corning Inc., Toledo. "More often today, we work with their point-of-sale data and our own sales data to help determine what we should be stocking," he says. "We build the planograms for them and in many cases ensure they don't get out of stock by recommending re-orders. We're not to full VMI, but it's getting there." That's evident in the planogramming that is being done now, he notes. "Three years ago, we couldn't even talk planograms with one major account, and now they're demanding them," he says. "The top chains are learning from each other."Even if most haven't reached VMI status yet, they definitely seek maintenance help on existing displays, either by in-house or third-party merchandisers. Owens-Corning uses its own in-house merchandising staff to maintain displays, which helps ensure that the company's materials remain effective and in place."The biggest battle is for space," says Rowland. "Our biggest problem is other competitors taking down our displays to create space for their own. Getting and keeping display space is the key for our reps. They have to keep checking with the store and maintaining communication with the manager to know if the display is still there. The strong will survive, and we know we have to protect our space."Durability is VitalIn many home centers, the strong survive literally. Displays must withstand being bumped by the staff's forklifts or by massive lumber carts steered by customers. "Durability is a critical issue with home centers," says Anita Bourdeau, senior projects coordinator for Pass & Seymour. As a result, the electrical company is using more wire and plastic materials as well as laminated cards and styrene for long-term displays. "We need the displays to hold up better so they can remain undamaged and be restocked.""Display materials are often destroyed in that environment," agrees Rowland. To improve durability, Owens-Corning created racking with a framework inset into it. It acts as a window into which the insulation products can be set, protecting the front from direct contact with stray carts. They also have developed racking for use on sidecaps that includes easily replaced components for those most liable for damage. "That design gives us the most functionality while also keeping our replacement costs down," he says.Such ingenuity is one way that vendors are working to give their display materials more versatility. Red Devil kept flexibility in mind while creating its recent wire rack for cross-merchandising. The rack can be used with any of the company's caulk cartridges and offers three different hanging options. "It's compact but holds a lot, and it can be displayed anywhere in the store," Red Devil's Sollecito says. "Versatility is one of our primary goals when designing these displays." Adds Pass & Seymour's DeRuby, "We need to offer a variety of different formats to meet the needs of all of our accounts, but we also have to work to minimize the variations." Part of that comes in using modular programs such as the company's Smart Set design that can expand off a basic set, she notes.Finding OpportunitiesVersatility also means that when opportunities arise, companies take advantage of them. Broan-NuTone, for instance, recently created a display for The Home Depot's appliance tent sale. Marketers learned of the promotion and produced a quick P-O-P display that showcased a wall of range hoods with pertinent information. The goal is to take advantage of whatever chances are available, says Bradzinski.Pass & Seymour is also finding those windows of opportunity, notes Bourdeau. "Often, the vendor of choice may be set, but we find a pocket of opportunity to put in a display to test response without a shelf commitment," she explains. "That gives us a chance to gain some sales without unseating anyone and to test whether we should be part of the mix." The company's new displays, which include samples that allow customers to try the products, are a critical part of that, she adds. "This is the first year we've been able to get off the shelf and into some prominent aisle space."That also occurs with Wilton Tools Inc., Palatine, Ill., a maker of winches and vices, notes Bob Varzino, national sales and marketing manager. "Home centers look at their inventory closely before taking new products or packing them in," he says. "Testing in our category before accepting a full program and investing in it is a definite trend." To aid that, the company has produced a variety of interactive displays that present several vice or winch options in a compact size. "We want to be as compact as possible while still driving sales," he says. "The retailers want to drive sales into three or four SKUs rather than six or eight if they can. They want to find a way to replace a product rather than extend the line." That means focusing on how the new product enhances existing items to both the buyer and consumer.Ames True-Temper Inc., Parkersburg, W.Va., is also using the versatility of its new wooden garden tool displays to gain some incremental space for its products. The displays feature heavy lumber frames in a quarter-pallet size with handle holders that can fit a variety of the company's tools. A large four-color poster on the front describes features and benefits and can be switched out for any tool desired.Ames' marketers created the concept because they found that when they discussed these tools with retailers, the buyer wanted to know what existing product each would replace, explains Jackie Smalley, category manager. "Since most of these items are seasonal, we didn't want to displace any tool in our existing set." Ames also feared that the specialized benefits would blend into the wall line-up without a special presentation. "We're working with retailers to make them more strategic about what they present on and off the wall and why products should be located where they are."More partnerships are developing as home centers tap into the marketers' expertise in creating and promoting a brand name. That results from the ongoing consolidation, which has turned the leading retailers into major brands in their own right. "I've seen a lot more coordination between manufacturers and retailers to get the correct message out," says Sherwin-Williams' DaRif. "Retailers have taken a big step up to brand their stores. They are taking all of their products within a department and packaging them in their format and then selling that back to the customer with an easy-to-understand message. We've seen it coming for some time, so we have to offer the adaptability to change as requirements arise."That doesn't mean that other brands have lost their power within each home center, stresses Owens-Corning's Rowland. "Brand preference is important, and it has gained importance recently," he says. "Home centers want brand identity to enhance their own identity. That's been a major transition. They see there's value in the brands."Packaging Provides PromotionMarketers are realizing that packaging can play a major role in helping to project that brand identity even when display space is limited. "Signage restrictions are requiring our packaging to be our P-O-P," says Randy Kleeman, packaging manager at Senco. "Increased competition is leading all companies to focus on their branding, find ways to stand out and explain benefits quickly. And the tool size dictates the size and style of packaging. We're not like cereal, where they can create a huge facing."Adds Senco's Wilt, "Randy and I have to work a lot more closely together today because the package often serves as our display vehicle due to the limits on what will be accepted. Signage can be taken down, but the packaging will always be there. It's the one thing you can count on to sell the product."Vermont-American Tool Co. is another tool maker that is focusing on packaging potential. The company recently introduced the Xchange Drill & Drive System, which provides a head on each end of the drill bit. To project that message effectively and quickly, marketers created a lenticular image that shows how the double-ended bit flips over for other applications. "Lenticular imaging helps us better communicate the unique benefits of the product in a way that still photography cannot," explains Doug Collins, launch manager for the Louisville, Ky.-based company.Although a lot of attention is being put into minimizing package sizes, the packages can only get so small and still explain a product's benefits -- often in three languages. "You don't want to get lost on the shelf and have a small package take away from your educational forum," says Wilton's Varzino. "You can shrink yourself down until you don't have a business any more, especially with niche businesses such as ours. If you can't show off the product, customers won't remember it."Value-Added Packages Stand OutSenco has helped its packaging stand out by creating value-added features. These take the form of enclosed accessories or special packaging that helps organize or protect the product. For instance, the company now packages some of its fastener lines in plastic bins rather than the more typical corrugated box. "It stands above the competition and adds value that customers can appreciate and will pay for," says Kleeman.Red Devil has spearheaded value-added packaging in caulking by introducing a plastic knob on the end of its caulk tubes that rolls up the tube around an inner hub. This not only helps control the rate of caulk delivery, but it also keeps the caulk near the nozzle and helps prevent air from entering to dry it up. Introduced in August 1999, the concept was expanded to more products this year. Another caulk maker, Macco Inc., Cleveland, this summer introduced caulk in an aerosol can, which similarly minimizes air infiltration to the caulk."For a long time, caulk packaging was overlooked," Red Devil's Sollecito says. "But now it's getting more attention, and new ideas are coming out." That results from a widening market, she notes. Formerly, most caulk users could be counted on to own a caulk gun. Today, more occasional D-I-Yers are looking to do minor repair and weather-stripping jobs themselves. "We're reaching new consumers today, so the packaging must meet their needs," she explains, "We're always looking for new ways to package the products, and the shifts in the market are making new packages make sense."New approaches to packaging and merchandising are welcomed by home centers, marketers agree, but it has to generate both heat and light to make the cut. "If you're going to take selling space in a home center, you need to give them a real good reason to let you do it," says Senco's Wilt. "Signage can't take up product space."Pass & Seymour's DeRuby agrees: "How much inventory you can provide depends on how creative you are. You have to keep the SKU count down while maximizing the real estate. The key to gaining space comes from whether the retailers believe you can provide the best promotions and drive their sales best. And they see merchandising as a key driver."That focus on improving return on space invested drives the stores, agrees SteelWorks' Broderick. "The pressure for us is to carry more model-stock quantities and boost the amount of each SKU we provide without adding too much space," he says. "And we also need to maintain the displays, replenish from stock and even place orders in some cases. Ultimately, the retailers are going to tell us, 'Here's your square footage, now manage it and make us money. And if you want more, show us how you'll use it to make us more money.'"

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