Point of Sale is broken. Here is 5 ways to fix it.
Updated: Jan 15
Recently, a member of my team accompanied one of our customers sales reps on a field trip to better understand their needs and get feedback on our software and service.
The sales rep took them to a storage unit where all of their Point of Sale (POS) materials were sent to and stored for her to distribute to her customers. To her surprise, the storage container was full of unused and out of date POS materials.
Unfortunately, this scene is commonplace in the FMCG industry. Both myself and many members of my team have worked in FMCG sales and we have seen this replicated across many organisations. In some cases, we’ve seen companies schedule an annual clear out day to enable sales reps to clean up their storage units and take redundant materials to be recycled or taken to landfill.
Why Does This Happen?
In short, this happens because generic marketing materials are pushed out by marketing teams to their sales people in the hope that they can persuade their customers to support specific activations.
The commonly held belief is that these point of sale materials are appreciated by customers and help to drive sales of that particular product or promotion.
So, what’s wrong with this you ask, it seems to make sense?
Well in theory it does makes sense, but in reality, it’s often a waste of time, money and has little impact on sales but does have a big impact on the environment.
5 ways to Fix POS Execution
There is a lot of research to show that most POS materials do not influence consumers at all. Most consumers see it purely as “noise”. It’s like wallpaper, you know it’s there, but you don’t really look at it (unless you are in the wallpaper industry!).
In the drinks industry where I work, there is a lot of research which shows that there are really only 2 key places to influence the consumers - the bar and the menu. If your brands are not visible at the bar or on the menu it’s most likely they won’t be purchased. This means that many of the other common POS items such as ice buckets, drip trays and posters that are delivered free of charge to bars have very little impact on the consumers thought process.
Here are five ways we think that POS execution can be significantly improved.
1. Measure and Evaluate ROI
Despite this research, FMCG companies continue to invest heavily in all manners of POS materials and spend millions on producing, storing, administering and distributing them. When I asked a Trade Marketing Manager recently why they did this, their response was “I’m not sure, I guess we’ve always done it. I don’t really know if it actually has a return on investment.”
It's critical to ensure that ROI is evaluated based on sales uplift rather than continuously focusing solely on the total number of outlets "activated" which results in sales people pushing marketing to outlets just to hit their target.
2. Invest in Great Content
One of the key reasons that these marketing materials are not used by the customer is that they are totally generic and standardised. To work effectively, the content needs to be relevant to the style of their outlet, customer profile, geography and marketing plan.
Brands can support their customers best through providing them with access to content that would otherwise be out of reach for the average bar owner. For example, one of our clients commissioned a well-known illustrator to create exclusive designs which their customers can now use to create standout menus and POS for their own outlets.
3. Enable Personalisation to Increase Relevance
In the age of personalisation this is the equivalent of sales reps distributing junk mail. These standardised materials aren’t relevant to the customer or the end consumer. I’ve seen first-hand a box of generic table talkers being dropped off at a bar by a major soft drinks brand for them all to be thrown immediately in the bin by the bar manager.
Therefore, it's critical that brands support their customers with POS that can be personalised specifically for the needs of that outlet.
4. Enable On-Demand Creation and Ordering
In the current process, marketing managers need to forecast their POS of requirements 9-12 months ahead of the activity. Not only does this tie up capital for a lengthy period of time and result in significant overprinting but it ensures that brands are unable to react quickly to opportunities. Take for example the recent Rugby World Cup Final where England played South Africa. This fixture would be impossible to predict more than 7 days out and therefore would be a missed opportunity to promote a specific activity with a relevant and authentic message.
With an on-demand technology such as MRM's Brand Creator platform the sales rep and/or customers can create customised marketing materials on the Wednesday and ensure they have it in their bar for the big game on Saturday.
5. Examine the Total Cost of POS
When looking at the cost of POS, the focus has traditionally been on the unit cost of the individual item being produced and how to reduce that cost by increasing order volumes or “value-engineering” cost out of the items. In reality, the unit cost of the item is only a small part of the total cost. In fact, much greater cost can be found in the design, administration, distribution, storage, over-printing and disposal of these materials.
However, the biggest cost is that to the environment. Mass printing POS, shipping it over from Asia, storing in warehouses and distributing via road has a huge impact on the environment, and that’s before you consider how much of these materials are plastic and end up going to landfill.
Therefore, it's critical that brands examine the "Total Cost of POS" rather than focusing solely on reducing unit costs. Only by doing this can they truly understand how they can improve the effectiveness and efficiency of their POS marketing execution.
It’s Time to Fix POS
At MRM Global, we see things differently.
We do not believe that generic marketing materials should be pushed out to the market in the hope that they are used and have a positive impact on sales. We believe that point of sale materials can have a big impact on consumer behaviour, but only if they are relevant.
This means providing technology to enable the sales reps to customise the materials so that they are relevant for their outlet while combining this with an on-demand fulfilment solution which means that sales reps only order what they need and have it delivered directly to the customer when they need it.
At MRM Global, we're passionate about enabling FMCG brands to solve this problem by empowering their sales teams to create personalised content and place on-demand POS orders for their customers.
If you want to know more about how we've helped our clients to dramatically reduce their POS spend and carbon footprint while significantly increasing their ROI then please get in touch.