With the rapid ascent of e-commerce and the likes of Google and Yahoo! swallowing ad dollars like a starved animal, one can be forgiven for wondering if the days of plain old, printed point-of-purchase (POP) displays are numbered. But it’s a funny thing about technology—while it’s undoubtedly true that the Internet looms larger in marketers minds, some of the same technologies are forcing them to key back in on the point-of-purchase.
Thanks to digital video recorders, satellite radio, pod casting, news aggregators, and other filtering technology, consumers have unprecedented control over what they see, hear, and read and, consequently, who can market to them. This control enables consumers to wall themselves off from messages and content that doesn’t interest them. This phenomena, dubbed ego-casting by Christine Rosen of the Ethics and Public Policy Center, has empowered consumers to play hard-to-get and put the onus on advertisers to reach them in innovative and creative ways. Like when they leave their house and head to the mall.
Point-of-purchase and display signage are on the front lines of capitalism. Effective POP can sway purchasing decisions at that crucial moment when a consumer is reaching for his or her cash.
"There are a lot of disruptive innovations impacting other forms of marketing and so POP has a big influence over purchasing decisions," says Tim Greene, research director, InfoTrends.
"It’s a very high-impact form of advertising," states Riley McNulty, research manager, IDC. "You’re influencing a purchasing decision at the optimal time in a very cost-effective manor."
Ask marketers and brand builders why they use point-of-purchase displays and you get a very simple answer—it works. POP is a proven sales driver, confronting the customer at a crucial moment.
"There are a lot of studies that show that most purchase decisions are made at the point-of-sale," says Karen Koslow, managing partner and co-founder of Think 360, Inc. Koslow, who has worked in marketing for over 20 years for such brands as Kellogg’s, Nabisco, and M&M/Mars, believes POP remains relevant in a world of increasing message clutter.
"People don’t remember things and in many cases your ad at the point of sale will be our only opportunity to reach them," Koslow says.
Not only that, but retailers expect that the products they stock will be accompanied with aggressive efforts to spur sales, adds Mary Pugh, president, The SoNo Group, Inc. "Retailers want a complete promotional plan when they pick up a product and you have to be ready to show them what you can do to promote your product," she says. Promotional materials—tear sheets, floor graphics, menu cards, etc.—are often sprinkled liberally throughout a store and not simply alongside the product being merchandized.
Pugh says the spice company McCormick and Company is particularly adept at leveraging a variety of point-of-purchase materials. "They’ll have the usual displays near their product but they’ll also use branded recipe cards in the fish or meat aisles, even by the ice cream."
There are as many flavors of POP as there are products to be hawked and retailers to hawk them. Eye-catching, digitally printed graphics can appear as posters, on the shelf, as a stand-alone kiosk or aisle end-caps, they can dangle from the ceiling or be stuck on a window and even the floor. While point-of-purchase was the main stay of offset and screen printers, the market is shifting over to digital technologies, says Patti Williams, consulting partner, I.T. Strategies.
For digital printers, there is an opportunity for both short runs—prototypes ordered by agencies for test marketing concepts before a full blown roll-out—and volume orders.
Traditional displays are printed on cardboard, other rigid substrates, or pressure-sensitive adhesives later affixed to boards to create standees—think of the cardboard model standing over a pallet of beer cases—on high quality poster paper or matte. Often displays are integrated with the packaging or, frequently, are the packaging.
Digital technologies have also expanded marketing capabilities and blurred the neat distinctions between décor and advertising, Williams states. "You could print a wallpaper merchandising various products, now is that POP or is that just a decoration?" To Williams, it’s more of a hybrid, which she dubs deco-advertising, where design elements become stealth marketers.
Digital printing technologies are looming larger in the POP market because of their ability to produce short runs or volume orders with variable data.
Digital continues to grow both incrementally, at the expense of screen printing, and additively by expanding the total market for POP with deco-advertising, Williams says. In a recent report authored by I.T. Strategies, the firm notes that even if a downturn in overall POP advertising spending should occur, "wide format inkjet graphics used for POP applications can continue to grow," by swallowing screen printed business.
Marketers are increasingly personalizing their POP campaigns, targeting specific regions or stores with merchandising designed to appeal to targeted demographics. Capitalizing on this regionalization, analysts say, will be crucial for success as POP evolves in an increasingly fractious ad market.
"We’re seeing greater regionalization because manufacturers are clamoring for creative ways to get the customer’s attention," Pugh adds. Retailers are also demanding greater specificity in the marketing materials they use in-store. For instance, a national campaign might swap out local celebrities in a die-cut display and change the verbiage to reflect special local events.
Despite the growing variety, a brand’s essence and the campaign’s messaging shouldn’t change, Koslow says. "You need to speak with one voice," despite the regionalization, she adds. Translating brand consistency down to the retail level requires, in part, that POP materials stay faithful to corporate logos and colors.
"We still see a very healthy market for POP signage, especially digital signage," Williams says.
According to InfoTrends, the total retail value of POP displays in the U.S. hit $20.7 billion in 2006 of which roughly $4 billion was digitally printed wide format POP. Worldwide, I.T. Strategies estimates that the retail value of digitally printed POP hit $8 billion this year. Those figures also include merchandising-related wallpapers and other displays not counted by other firms.
InfoTrends is predicting healthy growth in the POP segment through 2010 when retail values for the total category and its digitally printed sub-segment will reach $27 billion and $6 billion, respectively. The total POP market will enjoy a compound annual growth rate (CAGR) of 6.8 percent through 2010 and wide format digital will experience a CAGR of 9.3 percent, outpacing the overall market thanks to the ability to produce shorter runs and more innovative displays, like floor graphics, Greene says.
According to Williams, POP owns 42 percent of the $20 billion market for indoor graphics, making it the single largest application. As such, it’s a very mature market. "Every shop at some point produces some point-of-purchase," Williams says. What’s new is the shifting dynamics in the technology, with digital printers gobbling up market share from screen printers, she adds.
Most POP printing—$6.1 billion worth on a world wide basis—is done on aqueous printers, making it the top indoor aqueous application, Williams says. Similarly, POP is the leading UV application for indoor prints although it accounts for a vastly smaller dollar value at $830 million. That will change over time, Williams predicts, as UV technology ramps up.
The health of the POP market is intimately tied to overall ad spending which, in turn, is usually tied to the health of the U.S. economy. With regards to the former, ad spending was up four percent during the first half of 2006 versus the year before, according to the market research firm TNS Media Intelligence. Total ad dollars rang up $73 billion for the survey period. The financial firm UBS expects ad spending to grow 3.7 percent in 2007.
While U.S. GDP growth has been robust since 2003, the U.S. economic picture is more mixed going forward. GDP growth slackened in the third quarter yet unemployment remains at near-record lows and the Dow has climbed to record highs. If the economy sags and ad dollars fall, the POP market will follow other forms of advertising and soften—though perhaps not as steeply.
"POP is very important for firms with limited ad budgets," Pugh adds.
Given its sheer pervasiveness at almost half of the entire market for indoor prints, it’s a good bet that a vast majority of print shops have made some point-of-purchase signage in the life of their business.
For Providence, RI-based Renaissance Creative Imaging it was the downturn in the professional photo finishing market beginning with the introduction of digital photography that thrust the store into commercial and POP printing, says Judy Wilson, president.
"When I bought the business 15 years ago, we slowly pushed into POP both because photo finishing had dropped off and because POP got much more attractive," Wilson continues.
In addition to its Hewlett-Packard DesignJet 5000 and Epson Stylus Pro 1000, the firm recently added a VUTEk six-color PressVu UV 200/600 flatbed by EFI, Inc. to its business, making it one of the first firms in New England to own one. The purchase has led Wilson’s business to be more aggressive in the POP market especially for the more demanding, high image quality displays for Reebok, Tweeter, and Bose. "We knew we couldn’t get by with a four-color machine, getting the flesh tones right is very important for us," Wilson notes.
"We save a lot by not having to mount and laminate, particularly on personnel," Wilson says. "We’re a small business to begin with and we save a lot on the overtime."
At Rock-Tenn Company’s Alliance Group division—one of the nation’s largest producers of POP displays—the push for more targeted retail ad campaigns has led the firm to carefully evaluate its equipment. "You ask yourself, how do you fulfill orders with the traditional processes," says Tom Cooper, manager of digital printing technologies. The answer, he says, is digital. "The traditional processes will remain, but the pie-share will shift to digital."
The firm, which produces and assembles POP and display packaging for a number of Fortune 100 companies including the country’s single largest advertiser, Procter & Gamble, is helping to educate their customers to help them "understand what digital brings to the table," Cooper says. Specifically, the ability to customize POP for different regions of the country, such as changing languages or even dialects by region of the country, and produce it on-demand.
"This isn’t one-to-one marketing, it’s still a mass marketing tool, but it’s getting more specific," Cooper observes. The move toward regionalization is helped both by firms, like Rock-Tenn, who is proactive in explaining to its clients what new technology can achieve, but also by a growing awareness of digital’s flexibility among agencies, Cooper notes.
The company recently purchased an Agfa :Dotrix digital press with an eye toward capitalizing on more customized, high-quality POP business after an intensive five-year search.
Digital printing in the POP market is still relatively new terrain and the, "front end still needs work," Cooper says. "How do we automate the front end, the prepress?," Cooper asks. Tracking the business, monitoring spoilage, color management, and copy checking—particularly as ad content become more variable—are all issues still awaiting refinement, he observes. Still, Cooper is confident that digital—specifically the combination of single pass printers with grayscale capability and UV inks—will rule the day in the POP market.
"The stability of a single pass system and the quality you can get with grayscale are really the wave of the future," he says. "I don’t know where you draw the line" between phasing out the old in favor of the new, Cooper adds.
In her 25 years of experience promoting brands like Polo/Ralph Lauren and Estée Lauder, Mary Pugh developed an understanding of how to leverage POP for maximum effect. "POP won’t help a company or product land distribution but once they’re in a store, it’s essential, especially for companies with limited ad budgets," Pugh says.
POP still plays a very prominent role in marketing campaigns despite the rise of e-commerce and online advertising, according to Koslow and Pugh.
"The Internet is just another medium to get your message across" and POP will continue to be relevant, Koslow says.
What is intriguing marketers is digital signage. While still expensive and years away, interactivity is increasingly on marketers minds, Pugh adds. "There’s still a role for print here. You have to house that wireless display in something."