In our last issue, we carried a story, “How To Beat The Recession With P.O.P.” Since that appeared, the U.S. and the U.S. economy have suffered a dramatic blow caused by the horrific acts of the terrorists on September 11. Our industry, the P.O.P. Industry, had already seen a slowdown for the first ten months of this year, but September 11 had an even greater impact on consumer psychology, retail sales and P.O.P. sales.
We have always believed that point of purchase advertising is the most cost-effective and efficient media to help marketers move their products during a recession. Traditionally, point of purchase advertising sales gain during a recession as marketers use promotion to lift their sales. But now, many P.O.P. companies tell us that through they have worked on many campaigns providing art work, design and models, the orders have not come through. Many marketers are sitting on their hands and on their budgets. We are publishing this article, “How To Beat The Recession With P.O.P. - Part 2”, to give marketers some solid reasons for implementing their P.O.P. programs for 2002.
There is no hiding the gloomy news that the U.S. economy is in a recession.
The commerce Department reported that retail sales fell 2.4% in September which was the largest decline in nearly ten years of record keeping. The consumer Confidence Index which is reported monthly by the Conference Board, went down 11.5 points in October, which is the fourth straight monthly decline. The Index stood at 85.5, the lowest reading since February, 1994. Consumer outlook is becoming increasingly pessimistic because of widespread layoffs and rising unemployment. The fears which were triggered by the September 11 terrorists kept many consumers away from malls, restaurants and airports.
Many retailers hit by slumping sales began to lay off salaried workers and sales clerks. Department stores, restaurants and supermarkets have all laid off workers, decreasing their ability to service their customers. Yet, while department stores sales fell during the recent period, discount stores have held their own indicating that price and value are still important considerations for the consumer during this period.
Many analysts now believe that with the stock market moving up and the recent cut in interest rates by the Federal Reserve Board, that the U.S. economy will begin to recover some time during the first quarter of 2002. Despite all the negative news, we believe that there are some important factors which marketers should consider when planning their advertising campaigns for next year. Information Resources Inc. based in Chicago, has reported that despite the attacks on the World Trade Center, consumer spending on food, drug and mass market stores has remained stable. While airline, travel and hotels have been hit hard, the food, drug and mass market industries which are the core of the point-of-purchase display industry, seems to be on the road to stabilizing. Information Resources, which conducted a series of studies about trends in the consumer package goods industry, indicates that the terrorists attacks had minor impact on consumer purchasing behavior of these products. Consumer panel feedback indicates the intention to maintain shopping routines for these products in the future.
Other reports coming out during the past six weeks indicate the growing importance of point of purchase displays. Sears Roebuck said recently that it will cut 4,900 jobs and overhaul its stores to compete with discount stores like Wal-Mart and Target. Alan J. Lacy, the company’s Chief Executive, reported that the changes will include central checkout areas and more self-help displays. We are facing a period again where the reduction of sales help in all types of retail stores will resuscitate the use of the silent salesman - the P.O.P. display that can attract, inform and make the sales to the consumer all on its own.
The mood of many advertisers changed dramatically after September 11 and they found that they had to re-evaluate their messages on TV and radio and even magazines. Many advertisers and their agencies felt that their commercials were too frivolous, did not fit the mood of the consumer after the terrorist attacks and they have begun to study and plan for new themes and new commercials. Generally point of purchase advertising doesn't face these problems of adjusting to the new climate of the consumer because point of purchase advertising is product oriented and communicates with them as they are in the act of shopping. The cutback in TV messages even for a short period of time opens up the budget for point of purchase advertising. If TV marketers give up one of their “trophy TV commercials” they can have a $2 or $3 million point-of-purchase program which can have immediate, and an enormous impact on their sales. Even giving up one minute of their TV advertising on a top show, which costs $200,000 or $300,000, will buy they a substantial P.O.P. campaign. Point-of-purchase advertising, because it is in the right place at the right time. The last three feet of the selling cycle, can offer messages that position products offering real value and service and give a reason to buy right now.
We believe that there are many opportunities for the smart P.O.P. buyer because so many different types of point of purchase are available. Promotional displays, which are designed for a limited time frame, running from a few weeks to a few months, can be designed and produced quickly and economically using cardboard, corrugate, even vacuum forming and they can offer the unique opportunity for promotion which might include price offs, sampling, sweepstakes, premiums, games, etc. Point-of-purchase buyers will find that the upcoming year presents an excellent opportunity for intelligent marketing and creative merchandising.
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