Call it a slowdown, or a downturn, or a recession the first eight months of 2001 have hit the P.O.P. industry and sales are down for many P.O.P. producers. Traditionally, point of purchase advertising did well during a recession as marketers shifted to promotion to boost their sales. But the expected upturn in P.O.P. has not developed this time.
Many P.O.P. producers that we have talked to in recent months indicated that their clients had budgets for P.O.P. for the year but that they didn't spend it for the first quarter, for the second quarter or even in the third quarter. The advertising community as a whole has been hit hard this year and spending of TV, radio, magazines and newspapers is down substantially and P.O.P. has shared in this cutback.
When the current economic downturn began many corporations reacted in the same manner and they began tightening their belts on many of their activities including marketing. The headlines shouting about massive layoffs and falling stock prices reinforced their own declining profits. In past recessions, the consumer was always the one to pull in their horns, but in this recession consumer spending has continued stronger and it is the corporation who have lost confidence in their own activities and in marketing. Yet, most experts agree that during a recession the companies who continue to spend for advertising and promotion will continue their sales in the short term and will gain an advantage over their competitors who have curtailed their promotions, long into the future.
Point of Purchase advertising does more than create awareness and build brand identity. It is the only advertising medium which provides a direct link to the consumer and can actually make a sale son the retail floor. During a recession marketing dollars have to be spent wisely and creatively to generate sale sand point of purchase advertising can deliver more sales in a shorter period of time than any other media. In the past price/value promotions were often looked down upon by leading brands as cheapening their product but in today's market, almost everyone has become a smart shopper who is looking for the best price. The mood of the consumer today can be distilled from the sales of the leading retailers. Wal-Mart, Target and leading discounters continue to be well while traditional retailers find that their sales have slipped badly there is no doubt that this is a difficult consumer spending environment and the doom and gloom reports have also reacted on the consumer and indications are that they may be curtail their spending. Yet in reality, the employment rate is high, wages are going up and the consumer has the money to speed and they will continue to spend if they find the right products at the right price. Consumer buying psychology is fragile and wise marketers need to continue their promotional campaigns to keep the consumer involved with their brands.
The fourth quarter of the year is normally the strongest one for P.O.P. sales because it has three major selling occasions including Halloween, Thanksgiving and Christmas. Many marketers still have their P.O.P. budgets in place and in many cases display program shave been designed and are ready for the word to go ahead. In addition, many retailers have reduced their display budgets and their in-store sales staffs and this is an opportunity for marketers to generate extra display placements for their promotions. Marketers can increase the effectiveness of their display programs by working more closely with retailers to develop the product mixes, promotional offers and merchandising support that works best for different accounts.
Developing joint and promotions are one effective tool during recessions offering key opportunities to leverage spending with product exposure and display placements in new store or trade channels.
There is no question that mass media is no longer as effective as it used to be. The growth of the cable station shave fragmented the audience of the major TV station sand despite the fall out the cost of TV remains very high. At this point in time, point of purchase advertising has two major advantages. Display and promotional campaigns remain affordable and can now be produced in a short lead time. We are showing some of the types of P.O.P. displays which can be very effective during a recession including both stock display and corrugated displays. Display manufacturers offer a wide array of stock display sand modular display systems which are economical which can be customized and which are available in a short lead time. Stock displays are available in a wide variety of materials including corrugated displays, self stacking plastic modular displays, write display, etc. Stock display may include literature holders, spinners, specialty racks and gondolas. Many stock displays are product specific for books, videos, sunglasses, etc. Stock display are especially effective for regional, account specific or store specific programs requiring relatively smaller display quantities.
Corrugated displays continue to be one of the most useful and most cost-effective of the P.O.P. media. They are especially effective as a promotional tool during this period because corrugated displays which are self-shipper allow the marketer to ship the product in the display and have the product installed in the store in the same display. Over the past years corrugated manufacturers have developed important graphic resources and finishes to make the display more durable in the store. They have also reduced the time period needed to produce corrugated programs and some corrugated companies tell us they can produce a program from design to shipping in two or three weeks. We are showing a wide variety of corrugated displays including stock displays, self-shippers, mass merchandisers, power wings, etc.
On the following pages we present a selection of stock display products and corrugated displays which should help marketers in their planning for the next quarter.
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