INDUSTRY REPORT

PRESENTS:

The 2016 P-O-P Trends Survey

CPG merchandising executives weigh in on P-O-P
spending patterns, program management, tech innovation
and in-store merchandising’s future

Written by the Institute in collaboration with

EXECUTIVE n
One in four respondents report that current and predicted P-O-P
spending levels will increase; half say they’ll stay the same.
SUMMARY
n
If one needs a rule of thumb, respondents said P-O-P spending could
be allocated this way: 2/3 temporary, 1/3 permanent.
n
If no secondary display opportunity is available in-store, most
respondents will turn to digital path to purchase or e-commerce initiatives.
n
When asked for the typical sales increase from a P-O-P initiative,
respondents estimated 19% for permanent and 24% for temporary.
n
Nearly 85% of respondents measure P-O-P effectiveness in some way,
with half saying they track sales specifically by chain or region.
n
Almost one out of five respondents say they’d prefer to work with one
“turnkey” P-O-P vendor.
n
Perceptions of the most effective store zones have shifted; some
traditionally desirable spaces – store entrances, lobbies and center-
store promo areas – are now considered less valuable.
n
One in five respondents say they’re experimenting with some form of
digital shopper-content delivery that’s integrated with in-store displays.
Two-thirds say these experiments have been “very effective.”
INDUSTRY REPORT

by Bill Schober

W
hen P-O-P Times magazine conducted its first
Trends Report back in 1993, most marketers
couldn’t be bothered to measure display perfor-
mance, material costs were their biggest headaches, and
stores were packed with floorstands full of VHS tapes.
To say that in-store marketing has changed a lot over
the past 23 years is beyond an understatement.
As the charts on the following pages testify, P-O-P
practitioners face a world of changing technologies and
shifting performance expectations. To add a qualitative
aspect to our quantitative survey work, we assembled
a “virtual roundtable” of veteran CPG merchandising
executives and posed some of the survey’s questions di-
rectly to them.
One truism remains: In-store marketing still com-
mands a central position within the path to purchase.

SPENDING
Over the past year, how did your How do you predict your company’s Has your company’s P-O-P
company’s P-O-P budget change? P-O-P budget will change for 2017? budgeting changed in recent
years?
STEVEN HECHT: I concentrate on
Increased Will increase Will permanent and semi-permanent
24.4% Decreased 26.2% decrease merchandising where I have not
14.6% 14.3%
seen any restrictions on spend. If
the ROI is there, the spend is vali-
dated. I give our marketing people
options and they decide how many
No change Won’t change
59.5% they are executing.
61.0%
Very often suppliers will ask me
if I have a budget, and sometimes I
don’t. But I know from experience
Average Increase: +16.1% Average Increase: +11.82% how much things should cost.
Average Decrease: -14.6% Average Decrease: -9.17%
BOB MYERS: Budgets have contin-
ued to go up for us year-over-year.
How is your company’s P-O-P How is your company’s P-O-P budget They’re primarily going up because
budget changing relative to the changing relative to the money it
we continue to go after different
money it spends on digital? spends on traditional advertising?
markets: e-commerce, natural and
organic, drug or discount, for ex-
Increasing Decreasing ample. We’ll look at our toolbox
Increasing relative to
relative to and pull out a new capability that
relative to digital advertising
advertising
30.0% 24.4% we can use to go in and sell them.
Decreasing 12.2%
relative to We are increasing our budget again
digital this year to support some of those
32.5% strategy changes around the tactics
Staying the same
Staying the same of merchandising in-store.
63.4%
37.5% MAUREEN MARRONE: Our P-O-P
budget is getting larger because we’re
trying to gain more control over how
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016) our selling environment looks in the
INSTITUTE ANALYSIS: While much has changed over our 23 years of industry retail store.
survey work, P-O-P spending patterns have not. Except for recession years, one
in four merchandising executives typically report that both current and predicted We are putting more money into
P-O-P spending levels will increase while approximately half report that they’ll stay digital than we ever have before.
the same. Not a ton, but it definitely has in-
Probably more notable is the indication that significant in-store display budget
dollars are being redirected toward digital. That is in line with the observation that
creased and it gets incorporated
many leading-edge P-O-P practitioners are beginning to integrate digital into their into our merchandising budget as
display work. we try to figure out what’s best. Al-
The data shown for spending relative to traditional advertising should be taken
though sometimes I think that digi-
with a grain of salt as many respondents said they do not have access to their com-
pany’s above-the-line spending data. tal may be a little bit overrated for
what we sell.
2
 ALLOCATION
How do you allocate your Do you plan to shift your P-O-P If a secondary display opportunity
P-O-P display spending? spending by type of display? isn’t available, and we can do only
one, we’ll put more effort into:
Yes, by using
Display
more signage
packaging
13.9%
Temporary/promotional 25.7%
60.3% Yes, shifting
from temporary
to permanent Digital initiatives E-commerce
16.7% 34.3% 20.0%
Not shifting
Permanent/ongoing our spend
39.7% 69.4%

Note: “Shift from permanent to temporary” Primary packaging Print in-store media
was asked but received no mentions. (label, bottle, (coupon dispensers,
can, etc.) floor graphics, etc.)
2.9% 11.4%
Electronic in-store media
(digital signs, TV networks, etc.)
5.7%
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: Obviously, the ratio of temporary-to- secondary display opportunities in-store, marketers say that
permanent display allocation will vary significantly by com- they’d either amp up initiatives along the digital path to pur-
pany, brand and even event to event. The first chart (above, left) chase or redirect that spending toward e-commerce.
therefore should be viewed as merely providing a rough rule When a version of this “No Secondary Display Allowed”
of thumb for P-O-P spend: 2/3 temporary, 1/3 permanent. And question was asked 10 years ago, more than half of our
maybe more of a “guesstimate” than a rule. respondents said they’d first throw all of that effort into their
Of more interest will be the “forced choice” chart (above, primary packaging.
right). If we hypothetically prohibit your brand from having any Today, virtually no one would.

BILL SMITH: It’s more about how it’s being spent as op-
posed to the total dollars. Everybody’s cost per display
has gone up because everybody is having to spend more
on customization than they did before.
What’s the single most important reason for using
P-O-P in your category?
RANDALL RODRIGUEZ: To bring our brands to life in
store; we want to match the “mental availability” we cre-
ate through advertising with physical availability. We
want a world-class in-store experience that breaks down
the barriers of “Don’t think of your product” or “Can’t
find your product.”
RICK STRINGER: For us, it’s introducing the consumer
to a new product and driving conversion. Creating aisle
ambience through semi-perm and perm to help with

OUR VIRTUAL ROUNDTABLE SURVEY METHODOLOGY

n Steve Hecht, Senior Manager of Visual Merchandising Design,
Johnson & Johnson Consumer
n Bob Myers, Director, In-Store Design Team, General Mills
n Maureen Marrone, Director of Visual Merchandising,
Hunter-Douglas
n Bill Smith, Principal, Display Coach LLC / 1996 Hall Of Fame Inductee
With P&G
n Randall Rodriguez, Senior Merchandising Manager, Mars Chocolate
North America
n Rick Stringer, Vice President of Customer Solutions, Crayola
n Jill Andersen, Director of Marketing, Menasha
In June 2016, several hundred U.S.-based CPG merchan-
dising executives were emailed a questionnaire to be
completed online.
The names were drawn from Shopper Marketing
magazine subscription and Path to Purchase Institute
membership lists, with an emphasis on those with director,
manager and vice president titles.
From those emails, 63 CPG marketing executives sub-
mitted full or partially completed surveys. Each respondent
was entered into a drawing for an Amazon Echo device.
The data was compiled and cross-tabulated by Irwin Broh
& Associates, Des Plaines, IL.

3
INDUSTRY REPORT
In your category, what is the single
most important reason for doing P-O-P?
Short-term
sales lift New product
30.0% introduction
23.3%
Activate a
Brand building promotional
26.7% message at retail
20.0%
Note: “Provide legal cover for retailer payments (slotting fees)”
was asked but received no mentions.
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: The “Why Use P-O-P” chart (above,
left) is another forced-choice question; truth be told, any of
the four options are probably equally correct.
However, as the chart on page six confirms, traditionally
product marketers say that P-O-P is most essential (and
retailers are most receptive, as well) when it supports a new
product launch.
One respondent, in fact, posted this comment anonymously:
“The marketing folks and account teams usually come to me
and say, ‘We need this and we have $100,000 to spend. What
can you do with it?’ But other times, they’ll just say, ‘We’re do-
ing a launch’ – and then I don’t even hear about a budget.”
wayfinding and navigation is pretty important as well.
In a multi-segmented category, P-O-P can be very help-
ful in improving shoppability.
Another area where P-O-P is really impactful is with
co-branding and co-promotion where you can make
merchandising assets work harder. You may have two
brands that may not turn enough to warrant an entire
endcap on their own, but together can provide a shopper
solution and work economically for the retailer. That’s
really powerful. No one wants to exit a merchandising
event with heavy inventory.
MARRONE: To communicate the breadth of our product
line. We have 26 different products and each one has
myriad options, fabrics, colors, etc.
MYERS: Shopper connectivity and building our brands.
Has your rationale for using P-O-P changed
in recent years, and where do you see things
heading?
STRINGER: The rationale hasn’t changed but the ap-
proach has probably become more simplified, both from
4
WHY USE P-O-P
How much do typical P-O-P How do you measure
programs increase sales? P-O-P effectiveness?
Permanent displays: 19.0% Track sales specifically
(i.e., by region, chain, time period)
52.8%
Track sales generally
Temporary displays: 23.8%
(i.e., overall sales increase)
47.2%
Compile feedback from field staff
27.8%
Track retailer acceptance/reorders
16.7%
Never/rarely measure
13.9%
0 10 20 30 40 50 60
Note: “Measure via technology (i.e., sensors) that deliver
content to shoppers while in purchase mode” was asked
but received no mentions.
While we asked for an estimated sales bump (above, middle)
from a typical P-O-P initiative, we recognize that no program,
product or brand is ever really typical. So use those figures
judiciously and don’t bet the kids’ college fund on them com-
ing through every time.
BTW: If you don’t like the answers to our sales bump chart
(above, middle), be aware that we asked the same question in a
slightly different way:
“Generally, for every $1 invested in in-store marketing, our
company generates at least $____ in incremental sales.”
The median answer: $2.50. Again, feel free to use this but
do so judiciously.
a costing standpoint but also in trying to simplify the
messaging to the shopper. There’s so much to engage
shoppers in terms of what they see in the store and what
they’re looking at on their screens. Sometimes just a big-
ger, bolder message is easier to drive that capture. So
P-O-P is still a big focus of what we’re doing.
HECHT: I’ve been doing more permanent executions
than corrugated, and I see it heading toward more of
a holistic approach that incorporates technology and
media. We’re trying to do 360° executions where every-
thing links together – a smartphone interacting with dis-
plays, for example. That sort of a thing.
MARRONE: We do mostly permanent, and the rationale
behind that has not changed. But for signage and non-per-
manent P-O-P, our rationale lately is less is more. We want
to create things that are more substantial and sophisticat-
ed. We don’t want to overload the store with tchotchkes.
MYERS: Our rationale has not changed. Displays are
not a strategy; displays are a tactic by which we support
our in-store objectives to deliver against an overarching
strategy of a brand or a go-to-market.
 When we were trying
to grow distribution in “ Things might change with smart
c-stores, it wasn’t about
merchandising; it was
displays, but you’ll still need the
about using the units to get P-O-P vehicle there. I can’t imagine
the items into the c-store. it’s ever going to go away.”
We’d build a baseline of
sell and basket ring for the Steve Hecht, Senior Manager of Visual Merchandising
retailer, move less-profit- Design, Johnson & Johnson Consumer
able SKUs off the shelf, and
put General Mills items on
the shelf. Merchandising was the mechanism. focus on: speed, cost and innovation. We’re willing to
SMITH: People are becoming more aware that shoppers pay more if it’s innovative and will drive business. But
have a lot of ways to engage with the things they want we’re also looking at speed-to-market. You can bring us
to buy, whether on the phone, on the internet or in-store. a great item, but if it takes three months to make, it falls
With all of these triggers, the need to have a consistent outside our framework of 7, 14 and 21 days. Speed-to-
message across the board is more critical than ever. market, cost and innovation.
But you need to get things right on the primary shelf JILL ANDERSEN: While it’s nice that we’re on a lot of
first. That doesn’t mean you can’t boost sales with a dis- retailers’ “approved vendor” lists, you still have to earn
play, but your primary area is where people are going to it every day. And that comes down to a team that un-
be buying 80-90% of the time. derstands internal processes and can manage a project
all the way through a retailer’s system to speed develop-
Which qualities do you find to be most important ment, approvals and execution.
in a P-O-P producer? HECHT: Being honest and responsive. Cost is always a
MYERS: There are three pillars that we and our partners big consideration because we’re a big company, and when

PICKING A VENDOR
What factors do you use to select a full-service P-O-P producer? When selecting a P-O-P vendor, does
your company prefer to work with:
1: “Producer offers best design/quality” Just one
turnkey*
2: “We have an existing relationship with P-O-P producer” supplier
18.5%
3: “Producer offers lowest cost”
Four or more Two or three
4: “Producer offers fastest service” suppliers suppliers
25.9% 55.6%
5: “Producer is suggested by retailer”

*Turnkey suppliers offer a range of services from displays,

graphic packaging and signage to assembly, pack-out
and distribution. 

INSTITUTE ANALYSIS: The answers to our “How do you Pick
Vendors” questions have always varied greatly; it all depends
on which side of the table is being asked.
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
CPG marketers usually opt for “Design/Quality” (as seen in
the chart, above, left). Had we asked P-O-P producers, however,
it’s likely they would’ve claimed that “Lowest Cost” is a much
bigger factor than their clients are willing to admit.
The factor “Suggested by a Retailer” trailed the other four
options by a fairly significant margin, indicating that chains
today don’t exactly have a mandate in this area.
If the chart (above, left) is to be believed, familiarity may
actually breed loyalty. “An Existing Relationship” was the
second-highest-rated factor in vendor selection.
Turning to the vendor preference chart (above, right) we
see that most merchandising executives prefer to work off
of a short list of two or three vendors or rely on one turnkey
supplier. This is a far cry from 20 years ago when it was
almost customary to see every project start with a dozen or
more vendors thrown into a brutal price shootout run by the
purchasing department. That’s because typically, the first
things shot in a shootout were design flair and engineering
quality.

5
 INDUSTRY REPORT

RETAILER RELATIONS
Which store zone is most effective How do you conduct What percentage of the displays
for driving sales with your RETAILER RELATIONS
compliance audits? your company sends out do you
Whichvendor-supplied P-O-P?
store zone is most effective How do you conduct believe
What are actually of
percentage setthe
updisplays
in stores?
for driving sales with your compliance audits? your company sends out do you
vendor-supplied P-O-P? believe are displays
Permanent actually set up in stores?
On the 86.5%
perimeter Reports from sales
22.2% force/personnel Permanent displays
End of aisles On the Temporary/corrugated displays 86.5%
51.9%
37.0% perimeter Reports from sales
Reports from 78.4%
22.2%
Within aisles force/personnel 3rd-party
End of aisles 51.9% Temporary/corrugated displays
14.8% merchandiser Signs
37.0% Reports from 78.4%
Within aisles 25.9% 73.3%
3rd-party
14.8%
Checkouts merchandiser Signs
14.7% 25.9% 0 10 20 30 40 50 60
73.3%
Center Checkouts
14.7%
store/promo Lobby/entrance 0 10 20 30 40 50 60
We don’t/rarely Mobile/crowd-sourcing*
3.9% 7.4% audit service
Center
store/promo Lobby/entrance 11.1% 11.1%
We don’t/rarely Mobile/crowd-sourcing*
3.9% 7.4% audit
*For service
example, Field Agent, Quri, Gigwalk, etc.
11.1% 11.1%
Which factors are most important in affecting*For example, Field Agent, Quri, Gigwalk, etc.
a retailer’s Are the following chains accepting fewer
decision to accept vendor-supplied P-O-P? or more displays than in the past?
New product introduction
Which factors are most important in affecting a retailer’s Are the following
Fewer chains accepting
Same fewerMore
decision to accept vendor-supplied P-O-P? 56.7%
Kroger or18.2% more displays
27.3% than in the past?
54.5%
Customized
New productfor their stores
introduction Fewer Same More
46.7%
56.7% Albertsons
Kroger 11.1%
18.2% 44.1%
27.3% 44.4%
54.5%
Coordination with
Customized for seasonal
their stores events
36.7%
46.7% Walmart 45.0%44.1% 15.0% 40.0%
Albertsons 11.1% 44.4%
Additional price
Coordination reductions
with seasonal events
33.3%
36.7% Target 18.8% 45.0% 50.0%15.0% 31.3%
Walmart 40.0%
Construction/materials
Additional price reductions
23.3%
33.3% Meijer 7.1% 64.3% 28.6%
Target 18.8% 50.0% 31.3%
Cross-promotion with other products
Construction/materials
16.7%
23.3% Costco 8.3% 66.7% 25.0%
Meijer 7.1% 64.3% 28.6%
Fees provided forwith
Cross-promotion placement
other products
16.7%
16.7% Walgreens
Costco 18.2%
8.3% 63.6%
66.7% 18.2%
25.0%
Collateral (signs,
Fees provided forprice cards, etc.)
placement
13.3%
16.7% Ahold
Walgreens 11.1%
18.2% 77.8%
63.6% 11.1%
18.2%
Manufacturer/third-party setup
Collateral (signs, price cards, etc.)
10.0%
13.3% CVS
Ahold 11.1% 36.4% 77.8% 54.5% 9.1%
11.1%
Size/weight
Manufacturer/third-party setup
3.3% Sam’s Club
CVS 14.3% 36.4% 78.6% 54.5% 7.1%
10.0% 9.1%

0
Size/weight
10 20 30 40 50 60 0 14.3% 25 50 75 100
3.3% Sam’s Club 78.6% 7.1%

0 10 20 30 40 50 60 0 25 50 75 100
How well do these chains perform in terms of chain-wide How receptive are the following chains to
executionANALYSIS:
INSTITUTE of programs they accept
Perceptions of theatmost
corporate?
effective new
Another break orpast
from unusual P-O-P
practice ideas?
is that it is becoming
How well
store do (top,
zones these chains perform
have shifted
Excellent/Good
left) in terms of
significantly
Average overchain-wide
the past
Poor/Awful How receptive
almost routine are the
Veryfor
(top, middle) CPGfollowing
Receptive marketers chains
Not to to
conduct
Receptive
10-15 years. This
execution of is probablythey
programs due to advances
accept at in technology
corporate? some kind of compliance
new or auditing.
unusual P-O-PThe compliance
ideas? percent-
Costco 70% 20%
(cart tracking, etc.) and increased use of research methods
10% Albertsons 100%
ages (“actually set up”) reported in the chart (top, right) may be
Excellent/Good Average Poor/Awful Very Receptive Not Receptive
such as shopalongs. What’s most notable here is how low- more aspirational than actual, however. According to some
Sam’s
ratedClub 66.7%
some traditionally desirable
Costco 70% 33.3%
spaces – store20%
entrances,
10% Kroger 80%
recent research conducted by POPAI,
Albertsons 20%
100%“properly” executed
lobbies and center-store promotional areas – have become. levels may be closer to the 40%-60% range.
Kroger
Sam’s Club 44.4%66.7% 55.6%33.3% Target
Kroger 62.5% 80% 37.5% 20%

6 Target
Kroger 42.9%
44.4% 42.9%
55.6% 14.3% Meijer
Target 61.5%
62.5% 38.5%
37.5%

Meijer 41.7% 50% 8.3% Costco 54.5% 45.5%

 14.8% merchandiser Signs
25.9% 73.3%
Checkouts
14.7% 0 10 20 30 40 50 60

Center
we’re quoting out things it does comes down to cost. But What do you think of working with just one turnkey
store/promo
when I personally am working, I want folks
Lobby/entrance who do not
We don’t/rarely P-O-P supplier?
Mobile/crowd-sourcing*
make 3.9% 7.4%
me keep hounding them to see if they’ve
audit gotten RODRIGUEZ: service The advantage of working with one turn-
my emails. That’s the most annoying thing. 11.1% key11.1% supplier is consistency in quality and value deliv-
I’ve had to have talks with people’s bosses: getAgent,ered.
they Field
*For example, Thisetc.allows you to have a partner rather than a
Quri, Gigwalk,
the initial order, and then they disappear and I can’t get supplier, and one that is invested in your mutual success.
a response! MARRONE: When you work with one turnkey vendor,
Which factors are most important in affecting a retailer’s Are the following chains accepting fewer
MARRONE: The qualities I find very important are they get to know you, there’s little learning curve and
decision to accept vendor-supplied P-O-P? or more displays than in the past?
honesty, turnaround and the latest in packaging account management
goodintroduction
New product
is expedited
Fewer
more efficiently.
Same More
Basi-
technology and manufacturing processes. Cost is not 56.7%the cally, they react to requests and issues more quickly.
The Kroger 18.2%
disadvantage to27.3%
that is that things 54.5%
can become
most important
Customized thing.
for their stores
STRINGER: We deal with vendors that help us with 46.7%de- complacent, and you’re affected by their internal issues.
Albertsons 11.1% 44.1% 44.4%
sign work. We
Coordination also
with eventsour corrugate from them: If they go out of business or fall out with their freight
purchase
seasonal
they cut it, stack it and ship it to us; we then build it, 36.7%
and company Walmartand can’t45.0% ship your stuff, 15.0%you’re at40.0%
risk. I don’t
doAdditional price reductions
the pack-out and shipping pretty much all in-house. believe in putting all my eggs in one basket.
We want a vendor to take the time to understand the 33.3%ob- Target 18.8% 50.0% 31.3%
Construction/materials
jectives we’re trying to achieve from a shelf-back or shop- The more traditional way is to manage a stable of
23.3% Meijer 7.1% – what are 64.3% 28.6%
per standpoint, as well as the way we and our cross-func- P-O-P vendors your views on that?
Cross-promotion with other products
tional partners operate. That type of intimate knowledge 16.7% is STRINGER: We don’t have a large stable of providers, but
Costco 8.3% 66.7% 25.0%
absolutely critical. And all of that then flows into the design we have a couple. We like that model because you have
Fees provided for placement
work, which is the biggest thing. That’s a big, big deal. 16.7% contingencies,
Walgreens 18.2% but you’re also getting
63.6% fresh thinking 18.2%and
Collateral (signs, price cards, etc.)
13.3% Ahold 11.1% 77.8% 11.1%
INSTITUTE ANALYSIS: A caveat is in order here. The charts as conversation starters with your team members to see if
Manufacturer/third-party setup
gauging how well individual chains do or don’t perform on there areCVS
any problem areas to be addressed or opportunities
10.0% 36.4% 54.5% 9.1%
certain tasks (opposite page and below, left & right) are included being missed.
Size/weight
here merely as “indicator” research. Our survey respon- The “receptivity” chart (below, right) is a good example:
dents don’t always have comprehensive, chain-by-chain 3.3% Sam’s Club 14.3% 78.6%
Albertsons may indeed be more open to “new or unusual”
7.1%
knowledge, some may answer based on a perception, and ideas as its management has been shifting in recent years;
0 sometimes
10 the most
20 knowledgeable
30 respondents
40 50 shy away60 this rating may
0 also just reflect
25 the fact
50that Albertsons
75 tends 100
from answering altogether. We’d suggest using these charts to accept a lot of displays in general.

How well do these chains perform in terms of chain-wide How receptive are the following chains to
execution of programs they accept at corporate? new or unusual P-O-P ideas?
Excellent/Good Average Poor/Awful Very Receptive Not Receptive

Costco 70% 20% 10% Albertsons 100%

Sam’s Club 66.7% 33.3% Kroger 80% 20%

Kroger 44.4% 55.6% Target 62.5% 37.5%

Target 42.9% 42.9% 14.3% Meijer 61.5% 38.5%

Meijer 41.7% 50% 8.3% Costco 54.5% 45.5%

Walgreens 33.3% 44.4% 22.2% Walgreens 44.4% 55.6%

CVS 33.3% 44.4% 22.2% CVS 40% 60%

Walmart 23.5% 64.7% 11.8% Walmart 36.8% 63.2%

Albertsons 14.3% 71.4% 14.3% Sam’s Club 23.1% 76.9%

Ahold 100% 0 25 50 75 100

0 25 50 75 100

Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)

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INDUSTRY REPORT

DAMAGE For semi-perm and perm, I use competitive pricing.

Where in the supply chain do you encounter We design it internally, so we own the IP, and then send
the most damage to your P-O-P? it out for pricing and prototyping. I can then compare
and they all know they are competing so the prices tend
to be competitive. It keeps everyone on their best game
and I also learn, over time, who is good with what types
At the store level of execution.
52.2% SMITH: Personally, I felt it was always helpful to have a
stable of vendors. The balance we always tried to achieve
[at P&G] was to find enough single-sourcing for a cam-
In transit paign. Give each vendor three or four campaigns each,
39.1% because displays might have different qualities and dif-
ferent vendors are better suited for different things.
At the DC There were big launches when we’d give two or three
8.7% guys a chance because we were talking $2 million-plus
INSTITUTE ANALYSIS: There have been anecdotal
campaigns. But I didn’t like to bid stuff out to save
reports of more damage occurring to P-O-P displays out $10,000 on a $50,000 project because you really wouldn’t
in the field in recent years. There’s little in the way on con- save that much.
sensus about where it may be happening other than the
Look, the P-O-P business isn’t rocket science, but it
fact that distribution centers seem to be off the hook.
When we asked survey respondents at which chain the becomes difficult because we have to please shoppers,
most damage
Source: is encountered,
P2PI.org/Shopper Walmart
Marketing P-O-P was (June
Trends Survey named
2016)most retailers and a lot of marketing, sales, finance and pur-
often, and by a large margin. However, this may simply be chasing people. It’s the number of people involved that
a function or byproduct of its massive scale and reach.
Other chains mentioned briefly: Albertsons (Safeway), makes it so hard.
Best Buy, Costco, Food Lion (Delhaize), Home Depot,
Publix and “the dollar stores.” If you could change one thing about P-O-P
producers, what would it be?
HECHT: Get out of the 1980s sales mode. That’s the
a couple of agencies to pull from. We feel it keeps every- worst. Older guys who come out with a big sales talk and
one on their toes while enabling everyone to do enough no substance to it. We joke about it, and sometimes I just
to invest in our business. cringe when I get those calls: “We’ll take care of it all!” I
RODRIGUEZ: Managing a stable of P-O-P vendors al- get the same presentation every time – it’s horrible.
lows you to choose the best company for each specific MARRONE: My biggest request for any P-O-P producer
project and produce a better cost structure. If you have a would be to have one person on their end manage my
robust set of internal resources, this model can help you account: design, production, inventory, shipping, issues
excel as it drives competition. that come up, maintenance problems, repairs and ongo-
MARRONE: You also get competitive pricing because ing maintenance.
they know they’re not the only fish in the sea. Be proactive. Come up with new ways to do the same
HECHT: We operate with both of these models: turnkey old thing. If you have one person dedicated to you – and
and a stable of vendors. For corrugated, we just use two I’ve experienced both – it works so much better.
or three suppliers; that’s it, and each supplier works on STRINGER: I’ve had really good experiences. We do most
different franchises (although the prices have been going of this stuff in-house, and I work with a lot of the creatives
up and up). upstream. It’s very thought-provoking. I guess the key
is truly understanding what
works for the [retailer] custom-
“ We want to create things that er and how they’re all different.
are more substantial and It’s important to understand the
different aesthetics that play in
sophisticated. We don’t want different customers.
to overload the store with SMITH: I used to tell our sup-
tchotchkes.” pliers, “If I know more than
you do, we have a big prob-
Maureen Marrone, Director of Visual Merchandising, lem.” I may not need them to
Hunter-Douglas understand the sophistication
8
of the shopper as much – that requires CPG marketing
research – but they’d better be very familiar with the
requirements at Walmart, Target and Walgreens... and
then go from there.
We’re hearing that brands seem to be
encountering more damage to their P-O-P displays
than in years past? Is that your experience?
MARRONE: We’ve always experienced it, but I have not
seen a recent increase. Since they are permanent displays,
some go on a dedicated truck and are handled with kid
gloves – almost like furniture. But with other systems
we have, we'll go with a common carrier, and if I had to
guess, I would think it happens in transit. Generally, if it
arrives at the retailer in good shape, it stays in good shape.
ANDERSEN: It means that design teams have to be extra
thoughtful these days and account for factors such as du-
ration, level of customer interaction, floor maintenance,
heat/humidity and intended uses. We were asked recent-
ly to design a Walgreens wine & spirits program around
a corrugate display that could support the weight of the
Have you integrated any of your
in-store displays with technology
(i.e., sensors) that delivers content to
shoppers while in purchase mode?
Yes
21.4%
No
78.6%
Source: P2PI.org/Shopper Marketing P-O-P Trends Survey (June 2016)
INSTITUTE ANALYSIS: Welcome to the future of P-O-P. This
question was asked in a way that was both broad (“technol-
ogy,” “sensors,” etc.) and specific (“in-store display,” “shop-
per in purchase mode”) to tease out some huge possibilities:
What’s the potential for one-to-one messaging between a
CPG brand and a chain’s shopper inside the brick-and-mortar
environment?
This area is in its early stages of development and merits
an in-depth research effort of its own. But here are some
preliminary findings that should raise a few eyebrows:
product for four months. Engineering came up with a
unique clip structure to handle that kind of sustained
load; design elevated the bottom of the display and speci-
fied a special coating so that floor maintenance wouldn’t
impact the integrity of the display. Details matter.
MYERS: We’re not experiencing that, but a lot of it is
built upon our excellent supply chain capabilities. We
have end-to-end touches that ensure we’ll have good
quality on the front end and all the way until it hits the
retail floor.
RODRIGUEZ: We have not experienced that, but we do
constantly look to reinforce packaging materials to en-
sure we minimize in-transit damages.
STRINGER: No, I haven’t and we track that. We’ve
done a lot of work around continuous improvement as it
makes its way through the supply chain, from our truck
to the customer’s DC and to the store. It’s one area where
I think Crayola has done a pretty good job.
SMITH: There could be an issue because as retailers have
had to cut back on labor, there’s a lot of turnover in that
area. You have to be clever in your designs and account for
TECHNOLOGY
How effective was this What was your primary
content-delivery technology objective for doing this
at increasing sales? technology integration?
Very effective Product education
66.7% 66%
Somewhat To increase
effective sales in the
33.3% short term
18%
To reach consumers with
out-of-home messaging
16%
Note: “To satisfy a retailer mandate” was asked but
received no mentions.
• One in five of our respondents said they were already
experimenting with some form of shopper-content delivery
in-store.
• Two-thirds said that their experiments could be rated as
“very effective” from a sales building perspective.
• The broader purpose behind the experiments, however,
seems to be “product education.” This is significant, as it
means that brands are starting to view in-store displays in
an omnichannel marketing context rather than merely as a
sales-closing opportunity. Stay tuned.
9
INDUSTRY REPORT

pending on who’s approach-

“ We want a world-class ing the display. That’s the only
thing that I can think of that
in-store experience that would be game changing.
breaks down the barriers of STRINGER: Probably the most
impactful will be geo-targeting
‘Don’t think of your product.’”
via smartphones and under-
Randall Rodriguez, Senior Merchandising Manager, standing where shoppers are
Mars Chocolate North America in-store to understand behav-
ior patterns and then commu-
nicating with them. I think
that; never assume that things will be handled correctly. we’re going to get there sooner than we think; maybe
And let’s face it: when CPG purchasing people are un- the next five to 10 years.
der pressure to lower costs, sometimes they put pressure What’ll be interesting is where the shoppers go and
on suppliers to see if they can get by with lower-weight who do they trust? Do they build it through a retailer
materials. That’s always penny-wise, pound-foolish. like Target has done with Cartwheel? Do they have oth-
er third-party sources they trust?
Does damage seem to more of an issue in any SMITH: You’re going to see a lot more digital content and
particular channels? solutions simply because retailers are trying to manage
SMITH: If I am worried about damage, I’d look first at their costs. Labor is two-thirds of operating cost.
the drug, convenience and dollar channels simply be- MYERS: The dynamics of our markets and our cus-
cause they turn fewer units. In these channels, they tomers are changing, so it’s really all about being agile
don’t have loading docks, they can’t move things in-store and supplying something that goes beyond the stan-
on pallets because of floor space, and they have weight dard toolbox of offerings. Take brick-and-mortar and e-
limitations, so sometimes you have to ship two or three commerce, for example. Can you tie it all together with
things together. From a handling standpoint, when you solutions in-store and with connectivity to the shopper
ship things out in smaller numbers, they are putting up whether at home, pre-store or in-store?
things in individual pieces as opposed to a whole case. There are now multiple things that will help us do that.
The more individual handling that’s involved means It’s how do you print-on-demand, for example, and re-
more potential for damage. gionalize things all the way down to the customer. Most
CPGs have a requirement with customers about taking a
Are there any in-store display technologies that minimum of 50 shippers. Well, the model really should
you find provocative? be about giving them 50 shippers, but five of them will be
ANDERSEN: The greatest benefit identified by our re- customized in Spanish for the Miami market, which has
tail and CPG partners has been the ability to track the a high population of Hispanics, another five in a different
presence of their displays throughout the promotional market, and so on throughout the country.
supply chain. Now they not only have the ability to see
exactly when their display hits the store floor, they can Are the chains asking you to experiment this way?
also measure its performance. They also come to under- MYERS: No, the retailers aren’t making us do this; it’s
stand the size of the lost opportunity when a display is a capability we’re offering them. Yes, it’s driving incre-
not timed properly with promotional campaign media. mental sales, but here’s what it’s really doing: We all talk
RODRIGUEZ: I’m intrigued by solutions that place a about the importance of connecting the perimeter of the
camera on your display
to measure how and for
how long shoppers interact “ P-O-P is really impactful with
with your displays while
safeguarding privacy con-
co-promotion to make assets
cerns. These are potential- work harder. No one wants to
ly game changing. exit a merchandising event with
HECHT: Targeted market-
ing by gender recognition. heavy inventory.”
Changing your message to Rick Stringer, Vice President of Customer Solutions, Crayola
target the consumer, de-
10
 ADMIRE
Whose merchandising do you admire most?
1: Procter & Gamble
2: Coca-Cola
3: Anheuser-Busch InBev
4: Hershey
5: (tie) Colgate, Johnson & Johnson, Samsung, Nike, L’Oreal,
Mars/M&M’s, General Mills
Source: P2PI.org/Shopper
INSTITUTE MarketingHaving
ANALYSIS: P-O-P Trends Survey
a big (June 2016)
P-O-P
to get noticed. But if you can execute consistently with high-quality
merchandising vehicles, you tend to be admired.
store to the center store, but we have no mechanisms to
help the retailer accomplish that. So by drilling down
to store-level customization, you’re able to tap into their
community and/or regional strategy of merchandising.
You’re able to overlay and build a stronger plan for them.
Have you experimented with smart displays and
in-store sensors that deliver digital content to
shoppers while they’re in purchase mode?
RODRIGUEZ: Yes. It allows consumers to interact with
our products in a way that truly captures the essence of
our brands.
STRINGER: Not yet. The closest we’ve come is through
Cartwheel. That has been a good experience. It just
helps us drive a trip to the aisle.
HECHT: None as of yet. We do skin analysis for sun
care, but that’s not really a “smart” display. I’ve worked
on LCD touchscreens, but that doesn’t really qualify,
does it? I’ve seen demos on that kind of stuff, but we
haven’t incorporated it yet.
footprint means you tend
Where’s the market headed in 2017?
MYERS: We know that footprints are shrinking in-store
and we need to bring them different solutions. We keep
talking about challenges in the center store but have not
done anything as radical as what pet food has done in
their category. Bread did it; coffee and the beverage in-
dustry have done it too, but it’s been stagnant within
primary foods categories. I think that’s our new green
field site. That’s where we can build something very dif-
ferent and tie it into the total store.
RODRIGUEZ: As we look ahead, we hope to create addi-
tional points of disruption and connections to brand ex-
periences that leverage digital content and social media.
HECHT: Nothing but sky! Even when Walmart tried
their clean store, they had to bring merchandising
back eventually. It’s nice to have it somewhat clean in
the aisles, but P-O-P will not go away. Things might
change with smart displays, but you’ll still need the
P-O-P vehicle there. I can’t imagine it’s ever going to
go away. n
11
About Menasha
Menasha is North America’s largest independent packaging and merchandising
company focused on optimizing the retail supply chain. As market leaders within the in-
store merchandising industry, Menasha combines an unmatched understanding of the
retail sector with a proven methodology for developing efficient, sustainable offerings to
meet customer specific goals.

With a network of over 50 locations that include design centers, manufacturing plants,
contract packaging and pack-out and fulfillment service centers, it is our mission to
integrate the merchandising strategies of retailers & CPGs. Our solutions are backed
by an experienced team of 100+ designers, over 70 project managers, and dedicated
account directors who utilize our proprietary merchandising model, retail audit and
promotional planning tools to provide innovative solutions that allow our customers to
win on and off the shelf.

Menasha continuously invests in the most efficient technologies and capabilities to

ensure we are providing the best solution the industry has to offer.

The Path to Purchase Institute is a global association serving the needs of brands,
retailers, agencies and the entire ecosystem of solution providers along the path
to purchase. The Institute focuses on the forward-looking challenges and issues
confronting our members and the shopper marketing industry at large. We facilitate
industry interaction and foster best practices and a deeper understanding of all
marketing efforts and touchpoints that influence and culminate in purchase decisions
in-store, online or anywhere along the path to purchase.