SUPERMARKETS POP life: Study emphasizes gains from in-store ads
Companies are advertising more heavily in stores because that's where most buying decisions are made.
ST. LOUIS POST-DISPATCH
OK, so you saw the TV commercials for the two competing brands of detergent. You read the circulars in the newspaper. You heard the radio spots in the car and probably noticed the billboards along the way.
As you march into the supermarket, you are determined to buy detergent. It's decision time. The companies have done all they could to influence you. Or have they?
In the food and consumer-products industry, the battle for customers does not end at the store entrance. Increasingly, it is being waged on shelves, in aisles, even on the floor. There might be neon mats. There might be celebrities -- cardboard cutouts, of course. There might be interactive video screens or mini-blimps floating around.
Prime spot: For retailers and manufacturers, point-of-purchase advertising, or POP, represents the last, best chance to score loyalty points and to boost sales, perhaps when it matters most: at the store, experts say. And that's where 70 percent of buying decisions are made, according to Point of Purchase Advertising International, a trade association based in Washington.
"The most important place to talk to a customer is on-site," said Bruce Kupper, president and chief executive of Clayton, Mo.-based Kupper Parker Communications. "It really impacts the success of a product. When I go into a store, I already know I want to buy soup. But what soup do I buy?"
More companies are paying greater attention to in-store advertising because traditional forms of advertising have become fragmented, cluttered and less effective, said Carrie Heilman, a professor of marketing at Washington University. POP offers companies the most intimate way to reach the consumer, she said.
"They are like smart bombs," Kupper said. "They hit a specific target at a specific time and a specific place."
More savvy: In-store advertising is not new. What is notable, experts say, is that companies and retailers are becoming more sophisticated and adept at using POP, whether to highlight a price promotion and a special sweepstakes or simply to educate consumers about a product.
The goal, experts say, is to take a relatively mundane activity, such as grocery shopping, and to make it an "experience."
Though in-store advertising generally was thought to be an effective marketing tool, there was no standard way to measure its impact on sales until recently. By contrast, media buyers could determine how many people saw or heard a TV or radio commercial.
Then, last year, the Point of Purchase Advertising International group released the first part of a five-year study, which tracked POP advertising of 100 top brands in 250 supermarkets and groceries. The study found that in-store advertising produced sales gains of 2 percent to 65 percent at a cost similar to radio and outdoor billboard ads.
The results pleased executives of companies that already spend serious dollars on point-of-purchase advertising, such as beer, cola and snack-food companies. But there were surprises for smaller advertisers, too.
Purina's success: For example, Nestle Purina PetCare historically has not spent a lot of money on POP. Purina has had difficulty in winning POP space from retailers because, unlike with beer and snack food, there is only so much a dog or cat can eat, so buyers don't tend to stock up, said Don Schmidt, a senior manager with Purina's marketing research team.
But the new study showed Purina's POP efforts produced sales gains that rivaled beer and snack foods, he said. Purina faces tough competition from Procter & amp; Gamble's Iams brand. The consumer products giant has launched an extensive POP campaign to introduce Iams, a high-end specialty pet food, into the mass market.
"We need to take this [POP] more seriously," Schmidt said. "There is real potential."
Despite companies' general enthusiasm for expanded POP programs, not all retailers are on board. Some chains, such as 7-Eleven and Target Stores, have clean-store policies that place strict limits on what POP materials they accept.
Because there is only so much room, retailers do not want their stores to be cluttered. Retailers also want in-store advertising to be tasteful.