POP Display Budgeting- 5 Tips for Getting the Best Results

Posted by Jim Hollen on Nov 22, 2016 2:30:00 PM

If you are contemplating your next POP display project, you might not be too enthusiastic about spending time coming up with a realistic budget. A lot of our customers find the creative process very engaging. They enjoy combing through Pinterest in search of design inspiration for their display project or gathering pictures of what their competitors are doing. But when it comes to discussing the budget for a display, there is often radio silence.
 CCO FL01  POP Display
There are several reasons why the majority of customers don’t have budgets when they are ready to start the design process for a point of purchase display program. First, they don’t know what POP displays cost. Second, they believe that if they give a POP display company a budget, they will end up paying more than if they were silent about the budget. Third, they don’t have a clear idea of what level of spending is appropriate to achieve desired results for their merchandising program. When we ask about the budget, we typically get answers like, “I have to provide the display for free,” or “just make it as inexpensive as possible.” We see examples of people who overspend unnecessarily on displays because it’s their first big launch in a major retailer so they want to make sure their brand is properly represented. Conversely, we’ve seen customers cheap out on their display and suffer poor results.
 ABBT POP Display
We’ve had more than our fair share of experiences with customers who don’t have a budget for their display program prior to starting the design process. In those cases, we use our best judgment to design something that we think will work given the information we have. After presenting our concepts to the customer, it’s not uncommon to hear “That’s way over my budget.” It’s an interesting response from a customer who didn’t have a budget. The point is that most customers have at least some idea of a general budget range that makes sense for their product so it’s best to share that with your display provider upfront so the design process can be streamlined and made more efficient. Without  budget, it’s not too different than going shopping for a car and having no idea if you can afford a Mercedes or a Ford Escort. It’s a waste of time.
 
BIG-B POP Display

So here are 5 tips that can be helpful in establishing a budget for your display project prior to starting the design process:

Tip #1: Find out What Similar Displays Cost

Asking your POP display provider to give you examples of similar displays they have recently manufactured along with the cost. This type of benchmarking is one of the quickest ways to get an idea of what you will have to pay for your display. Make sure you get enough specifics about the size of the display, materials used, quantities quoted, etc. to ensure the comparison displays are close to what you are envisioning for your display.
 
RG POP Display

Tip #2: Consider All Costs Required to Execute Your POP Display Program

To ensure your display program is economically viable, you need to consider all of the costs that will go into the program. It’s not just about the cost of the display. If you are a brand, you need to think about the cost of shipping the display and your product to the retailer or distribution center, the cost of compensating a distributor or sales agent if there is one involved, the cost of servicing the display if required, the cost of any adverting allowances if appropriate, financing costs if you have to use factoring, and a variety of other potential costs. Make sure you consider all of the costs involved with executing your program and evaluate your margins in the context of the full program costs. Looking at the big picture will help you determine how much you can afford to spend on your display.
 
CABO POP Display

Tip #3: Understand the Key Cost Drivers of the Display

Understanding the key cost drivers of a POP display will help you get to a realistic budget more quickly. For example, if you are considering a corrugated display, make sure you are considering cutting die fees, plate charges, quantity-related discounts, etc. For permanent displays, get familiar with the cost of different materials such as MDF vs. plywood, laminate vs. melamine finishes, wire vs. sheet metal, and PVC vs. acrylic. If you are considering a floor shelf display, for example, be sure to consider material yields if you are using sheet goods like MDF or plywood. Your display provider should be able to offer guidance on how to size your display so as to maximize material yields.
ACH POP Display
 
Tip #4: Research Retailer Expectations and Competitor Display Programs

Knowing what retailers expect when it comes to POP displays can help you establish a realistic budget for your display. Some retailers don’t permit corrugated displays. Others have upscale store environments that might require displays with higher finish levels. You can get a pretty good idea of what is expected by visiting stores and talking to store managers or the visual merchandising team at the retailer. It’s important to understand how long you will be able to have your display in stores since that will determine the sales period over which you can amortize the cost of the display.
Similarly, it’s a good idea to familiarize yourself with the types of displays your competitors are offering. If the competition is offering diamond-studded logo blocks, be ready to up your game.
 
play POP Display

Tip #5: Think of your Display as an Investment Instead of a Cost

Our final tip involves a shift in mindset. Almost all of our customers think about their POP displays as a necessary cost. Their objective is to minimize the cost. But, that thinking is similar to buying a $100 stock and thinking about it as an expense that you are trying to minimize. Sure, it’s a good idea to try to buy a stock as cheaply as possible, but buying a stock should be viewed as an investment rather than cost. The same is true for displays. Yes, a POP display requires an initial outlay of cash, but it’s really an investment that should generate an attractive return. That’s why it is so important in Tip #2 above to understand all the costs involved in your merchandising program. Your goal is to create a positive, attractive, and measurable return on investment for your display program.

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