Saving money on POP displays seems to be on the minds of brands and retailers alike these days. As we all know, there are many factors that influence the cost of a point of purchase display such as type of materials, quantity of displays, shipping costs, etc. Whether you are a POP designer, a visual merchandiser, a brand manager, or a member of a store operations team, it is important to understand the key cost drivers of a display program. Knowing the economic relationships underlying the design and manufacturing process of a POP display is extremely helpful in the value engineering process and ultimately in creating cost-effective displays. In today’s blog, we’ll reveal a trade secret that can be valuable in reducing costs of metal and acrylic displays.
We analyzed data from 20 recent metal POP display projects using China manufacturing costs. These projects involved a number of different types of metal, including metal tube, wire, and sheet metal. The study included parts and accessories such as wire baskets and sheet metal brackets but also included complete displays that were made out of a mix of metal materials. To ensure that our analysis was representative, we included data from 5 Chinese factories so no one factory’s pricing methodology could skew the results.
What we found was that there is a positive and strong correlation between the weight of a display and the cost. You can see from the scatter diagram below that you can draw a line that is essentially straight between the dots beginning in the lower left corner to the upper right corner. Simply put, what that means is the lighter the display, the cheaper it will be. Conversely, the heavier the display, the more expensive it will be. Because the correlation between weight and cost is so strong, the relationship has significant predictive value when trying to determine the cost of a display.
So what? Well for one, our analysis suggests that the weight-cost relationship is likely to be more important that other variables like labor rates, number of welds per unit, and a variety of other factors that might be considered. In other words, the weight-cost relationship holds even for displays that have dramatically different degrees of labor intensity (as measured, for example, by the number of welds or amount of grinding or polishing required to achieve a certain level of finish).
How can an understanding of this relationship help you on your next display project? First, if you can find ways to reduce the weight of the display, you can save money. From a value-engineering standpoint, that might mean lightening up the gauge of sheet metal, increasing the space between the wires on a wire shelf, or switching from a 1” tube frame to a ¾” tube frame. Second, it can help you do better job of comparing apples-to-apples with suppliers who are supposedly quoting the same display since it’s likely that different suppliers will make different assumptions that can affect the weight of the display. Third, it can be helpful in the budgeting process since it can help you estimate if you can afford to add an extra shelf to each side of your display, for example. Finally, it can be helpful in the design process. If you have a limited budget and you know that sheet metal is heavier than wire, you can save a lot of time by forgoing the sheet metal in the initial design phase.
In addition to analyzing the relationship between weight and cost for metal POP display projects, we also looked at the same relationship for 10 recent China acrylic display projects. Not surprisingly, we found the same positive and strong correlation between weight of the display and cost as shown in the scatter diagram below. The weight of the material is the key factor in determining the cost of the display. If, for example, you designed a counter acrylic display that was to be made out of 3MM clear acrylic, but you decided you needed to beef it up to 6MM clear acrylic, you can expect the display to roughly double in cost.
Despite this relationship, it is important to keep yields in mind for sheet goods. What that means is that material yield is not really important when it comes to materials like metal tube and wire. However, when using materials such as sheet metal, acrylic, MDF, and plywood, it is important to keep in mind that standard sheet sizes are typically 4’x8’. Therefore, designing a shelf that is 23.5” wide is considerably more cost-effective than designing a shelf that is 24.5” wide since the number of shelves you can get per sheet could possibly double in the case of the 23.5” shelf.
On your next POP display project involving metal or acrylic, try to keep the weight of the display as light as possible (while making sure your display is strong enough to avoid damage in shipping or breakage from in-store abuse). A lighter display will likely help you achieve a better return on investment on your display.
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.