Say you have a new product line that you are trying to sell through brick and mortar retailers. You’ve been selling it online with good results. So now you are thinking about taking the next step and trying to land some big retail accounts. Based on preliminary discussions with some target retailers, you think your product can get placed inline on the retailer’s new plan-o-gram. The good news is that you won’t have to spend much to get your product on the shelf. The bad news is that your product is likely to blend in with all the other products on the shelf and might be missed by shoppers who might otherwise be interested in your product. So what about pushing the buyer to go off-shelf? Creating custom POP displays would require more upfront cash. Is it worth the investment?
In the overwhelming majority of cases, the answer is yes. There are a number of important considerations:
1) Evaluate a custom POP display as an investment, not a cost- It’s worth doing the analysis. Run the numbers. Look at low, medium, and high potential sell-through numbers. Be sure to calculate your return on investment and your payback. An upfront display investment will surely cut into your profit margins in the early part of your program, but you sales will almost certainly be higher so once the display is paid off your margins should really start to improve.
2) Analyze your program from the perspective of the retailer- Granted, you need to start by understanding your own economics to make sure the program you are proposing makes sense for you. However, you will also need to figure out the retailer’s economics. View your custom point-of-purchase display as a profit center. Calculate the amount of profit the retailer stands to make by allowing you to have a freestanding display and supporting your program. Communicate the economics to the retail buyer and show them why it makes sense for THEM.
3) Get the retail buyer to commit to placement and timeframe- Before making an investment in a custom display program, make sure you understand the space you are being allocated. Will your freestanding display be placed in the front of the store or in a remote, dimly lit back corner of the store? Display placement makes a big difference to the sales performance of your product. Also, make sure you get a commitment with regard to the time your display will be permitted to stay in the store. If the retailer can only commit to a 90-day trial, you should be careful about how much you are investing in your display. On the other hand, if the retailer gives you a 2-3 season commitment, then your chances for getting a high return on investment on your display go up.
4) Make sure your custom display is effective- Be sure your display has a tight footprint since your program will likely be judged on its ability to drive sales per square foot. In addition, make sure your display provides an effective way to merchandise your product, promote your brand, and connect with the customer to drive sales. There is a world of difference between the results that a good display can generate vs. the results that a great display can generate. Make your display a great one.
There are many other things to consider when deciding on a custom display program, but in almost every case if you approach it thoughtfully and analytically, your chances of generating an attractive return on investment are good.
Jim Hollen is the owner and President of RICH LTD. (www.richltd.com), a 35+ year-old California-based point-of-purchase display, retail store fixture, and merchandising solutions firm which has been named among the Top 50 U.S. POP display companies for 9 consecutive years. A former management consultant with McKinsey & Co. and graduate of Stanford Business School, Jim Hollen has served more than 3000 brands and retailers over more than 20 years and has authored nearly 500 blogs and e-Books on a wide range of topics related to POP displays, store fixtures, and retail merchandising.
Jim has been to China more than 50 times and has worked directly with more than 30 factories in Asia across a broad range of material categories, including metal, wood, acrylic, injection molded and vacuum formed plastic, corrugated, glass, LED lighting, digital media player, and more. Jim Hollen also oversees RICH LTD.’s domestic manufacturing operation and has experience manufacturing, sourcing, and importing from numerous Asian countries as well as Vietnam and Mexico.
His experience working with brands and retailers spans more than 25 industries such as food and beverage, apparel, consumer electronics, cosmetics/beauty, sporting goods, automotive, pet, gifts and souvenirs, toys, wine and spirits, home improvement, jewelry, eyewear, footwear, consumer products, mass market retail, specialty retail, convenience stores, and numerous other product/retailer categories.