In our last blog, we started talking about the importance and effectiveness of having a great display at the Point of Purchase (POP). We referenced research and insights from a shop! Enhancing Retail Environments and Experiences white paper called “A Display is a Terrible Thing to Waste” and will continue tapping into its wisdom in this blog.
While having a great display at POP is important, there are multiple factors than can determine the success of your display, that are above and beyond just having it be eye-catching and well-designed/executed and branded. In this blog, we’re going to talk about the importance of placement. Get out your abacus because we’re going to get statistical…
In retail-store vocabulary, there are a few placement locations. They are End of Aisle (endcaps), in Aisle, and the Racetrack. Now, having worked in the grocery store business through high school and college, I knew what the first two were, but I had never heard of ‘the racetrack’ so I looked it up. ‘Racetrack’ is the large aisle or aisles in the store that have displays and bins of merchandise down the center of the widened aisle. Multi-lane shopping-cart traffic (buggies if y’all are southern) goes down one side and then routes back to the front of the store via the other side. You see cooler or freezer bins set up most commonly this way in the mass stores, e.g., Walmart, and in grocery stores. Mass and grocery stores see the greatest Return on Investment (ROI) on display marketing at 32% and 19% respectively. Drug stores and dollar type stores show 13% and 9% ROI levels. These results can easily be attributed to each store format’s purpose. Mass and grocery store shoppers tend to come in with long lists of needs/wants where shopping is an event that they budget time for, whereas those trips into drug or dollar stores tend to be quicker in-and-outs for convenience and for a specific item or items. Knowing this, those who do display marketing would be wise to develop display designs that appeal to the quicker shopper.
Now, the location of the display also factors into the success of your display marketing. Is it in a primary or secondary location within the store? In the white paper we’re referencing, their data showed that in grocery stores, 57% of displays are in secondary locations vs. 22% for mass stores. Mass stores place displays in primary locations 78% of the time vs. 43% in grocery outlets. So, summarizing results of all these numbers together: mass stores have displays in primary locations 78% of the time, and the ROI for display marketing in their locations is 32%. Grocery stores have displays in primary locations 43% of the time, and the ROI for display marketing there is 19%. Conclusion? Just like in real estate circles, the big determining value here is LOCATION/LOCATION/LOCATION.
Now, the shop! white paper also references a deficiency that impacts the success of display marketing, and I love they titled it “Failure to Launch”, because that’s exactly what it is. Compliance. The perceived compliance rate overall of properly set up display materials is 70% of the time, or 7 out of 10 locations do it right. Reality? Not so sunny or delightful. Reality is that planned display compliance sits at around 40%, or 4 out of 10 locations doing it right. Who do we point the finger at for this? The research paper identifies 3 culprits: The Retail Channel, that doesn’t manage setups like they say they will and allows shipped displays ready to be assembled and placed languishing in the back storage room. The Display Type is either too complicated or doesn’t fit where you want or envision it, so it doesn’t get set up. And three, the Installer gets the blame.
Now, let’s go back to the mass, grocery, drug and dollar store breakouts and rank setup compliance. Dollar channels have the top compliance rate in setting up display (78% of the time), but their displays had the lowest impact on sales, at 9%. Drug channels had the 2nd highest compliance rate (59%), but the displays only impacted sales 13%. Grocery store compliance rate in setups done correctly is only 30%, yet they impacted sales at a 19% rate, while mass stores were compliant in proper display setups 40% of the time and had a whopping 32% increase in sales. The take-away here is if you’re doing display setups at mass and grocery stores, investing in a personal representative of your business to do every in-store set-up correctly will impact your ROI positively vs. allowing and relying on store employees to do it for you. But even then, the research results say the setups are only properly done 7 out of 10 times, by their own employed staff!!! Statistically speaking, a 75% increase in proper setups (from 4 times out of 10 to 7 times out of 10) would theoretically result in a further 24% increase in sales overall in mass stores (to 56% total). Money well invested? I would think so…maybe look to hire one of the go-getters currently setting up displays correctly 78% of the time at dollar stores!
Need help with your Point of Purchase layouts, designs and other POP needs? Let the marketing experts at CMOco work for you to increase sales and grow your shelf space and business share. Call us today!
– Bruce Thiem, CMOco Director of Integrated Media
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