By Richard Saysell at Creo
There is a lot of discussion in the retail marketing industry about the more strategic role POS should be playing in the marketing mix. For the most part, the assertions, ambitions and aspirations of the industry are all perfectly valid.
POS is being treated with more importance by some clients and senior staff are getting involved, demanding a more consultative agency type approach.
Some agencies are also getting involved earlier in the project process which should reap the client cost and efficiency advantages. Additionally, a truly cohesive brand strategy can be achieved if a more collaborative approach is taken from the various multi disciplinary agencies.
However, for every client opting for a more strategic approach, there is another conducting a cost reduction initiative, which usually has the effect of reducing the design and quality of the display collateral to the lowest common denominator.
Overall then the take up or compliance of POS materials as distributed to retailers is poor. A lot of money is wasted but how can this be avoided?
Our recent research seems to indicate that the industry needs to take a step back before it can move forward again towards these strategic goals.
We conducted a study with senior clients in the industry which revealed that the strongest drivers used when considering the appointment of their supply partners were: service reliability; production dependability; quality of product; speed of product delivery; and quality of creative.
Of these reliability was placed as being the most important and creativity as the least important.
The study covered three areas specifically: the key operational performance objectives of speed, dependability, flexibility, speed and cost; the service quality dimensions of: reliability, empathy, tangibles, assurance and responsiveness; and finally, more specific industry topics including knowledge of consumer behaviour, knowledge of retailers, technology solutions, locality and carbon neutrality.
What may come as a surprise to the industry is that knowledge of consumer behaviour and retailer knowledge were rated only 6.44 out of a score of 10(13th and 14th out of 18 answers) as opposed to the high score of 9.22 forservice reliability.
There is definitely an increase expected in three years but still not to the level that the industry perhaps would expect. The biggest movement (apart from the need to become carbon neutral) is the increase of importance of speed of delivery.
This also ties in to the qualitative aspect of the research with many clients expecting their negotiations with retailers to evolve.
If the standard of the so called ‘basics’ in the industry of reliability, dependability, speed and quality, were being successfully delivered, there might be more focus on the value-adds of consumer and retailer knowledge but this isn’t the case.
They represent the key order winning criteria and the first hurdle which needs to be overcome before a more strategic seat at the table can be taken.
Strategic partnering operationally needs to be the first step towards the goals outlined above. Depending on what you read, compliance in the POS industry runs somewhere between 55-80% meaning that circa 20-45% is available to save from clients? budgets.
Increasing speed of delivery so that retailer negotiations can be completed
before production commences, or packing displays with product are two ways to attain this target. Both areas need to involve suppliers at a more strategic level but with the supply chain first.
The result would align the goals of marketing, operations and procurement and then open the door to discussing brand and consumer strategies.
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