...with their Hair on Fire

It's difficult, as a practical matter, to separate the nitty gritty of manufacturing from P-O-P display development. But truth be told, most marketing executives would rather dispense with the details of tech-talk. And after a decade of relatively stable news on the display-pricing front, generations of CPG execs have probably gotten away with it.But over the past nine months, a lot of P-O-P producers have been leading lives of quiet desperation. The price of just about every damn thing they need -- steel, aluminum, plastic, wood, corrugated -- has fluctuated wildly for reasons as disparate as China's quirky electrical grid, domestic housing starts and the stability of the Middle East. Then, by mid-summer, some producers became downright panicky. The price of benzene, the compound used to produce a lot of the resins used for a lot of P-O-P applications, had risen almost 90% over year-earlier levels, and was set to go even higher. You'd need a Ph.D. in chemistry to truly understand why. But one hopes that the brands will take a deep breath before severing any long-term producer relationships over what, by all accounts, are factors outside of everyone's control.Yes, I know that I just said that brand executives are decidedly non-technical. But some of the answers to our 2004 P-O-P Trends Survey surprised me nonetheless, especially the nonchalance expressed by CPG executives to the question, "How interested is your company in RFID (Radio Frequency Identification) and other electronic product-tracking technology?" Barely 30% of these product vendors said they were following its development at all (this was last winter), and only 5% said they were working on it.Meanwhile, 7% of the retailers we surveyed said they were already testing new applications for RFID, while another 25% said they were following developments quite closely. Wal-Mart, most famously, has been anything but languid in its plans. This summer, when some were celebrating the bar code's 30th anniversary in retailing, the world's largest retailer excitedly announced that its 100 largest suppliers would be required to put RFID tags on all pallets and cases -- including pre-stocked P-O-P displays -- shipped to distribution centers and stores by January 2005, although a more realistic deadline of January 2006 was soon assigned. And you can't get any larger than companies such as Target and Albertsons, which also have announced accelerated plans to implement RFID tagging.(Quick review: An RFID chip can be attached to anything such as a truck, a crate, a pallet, a display or an individual product's package. It broadcasts an Electronic Product Code that can identify where the item originated, the date of production and other variables. Sensors then monitor, in real time, the chip's presence and location within the distribution pipeline and -- eventually, but sooner than you might think -- within the store itself. In-Store Marketing Institute members can access a range of background materials. This article is a terrific starting point.)But although there have been literally dozens of key RFID developmental milestones in the months since our survey was taken, most CPG vendors probably still say that, at least as far as in-store marketing is concerned, RFID's benefits seem too far off on the horizon. Clearly, as you will learn shortly, this assumption is wrong. Yes, chip prices will keep RFID applications, for a time, focused on backroom, supply chain and logistical applications, and there's no doubt that the big box and giant supermarket retailers have an "operations-first" mindset.But some equally heavyweight chains (whose names I am not at liberty, at the time of this writing, to reveal) are already testing something more advanced: an RFID-driven tracking system that can monitor the displays supplied by some forward-thinking vendors.What do they expect to learn? Among other things, how to:Track display placement, location and movement;Determine sales lift and profit contribution, by individual display;Identify non-compliant stores in real-time;Allow for instant remediation of misdirected elements;Identify and eliminate ineffective display programs;Optimize trade spending.Jerry Reitman, partner and vice chairman of the Callahan Group, and Robert Michelson, CEO of Goliath Solutions, will discuss the ramifications of Goliath's newly-developed ability to measure in-store promotional activity at The P-O-P Show/New York. Mark down Wednesday, Dec. 8, 9:30 a.m. at the Javits Center, in your date book.But let's knock down one straw-man right away. A few privacy advocates have questioned whether RFID-tagged products somehow could be "tracked" all the way into the consumer's home and pantry for nefarious purposes. Everyone in the know knows that the chip's broadcast power is too weak for that to work. But some crankily alarmist Web postings caused Wal-Mart and its CPG test partners to tone down the publicity machine.The very remote possibility that some Michael Moore-inspired film crew might come sniffing around the loading dock won't be enough to scare off the smarter CPG marketers. They are going to capitalize -- ASAP -- on what may prove to be the most significant technological advance in in-store marketing since the commercialization of the wide-format printer. This session may be the first step on that path.

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