FERO OPINION PIECE - MAXIMISING ROI FROM POS

Do retailers and brands truly understand the return on investment (ROI) they are achieving through their POS campaigns?

We conducted a survey with leading brands and retailers and asked them to rank out of 10 how well they understood the ROI they were achieving from their POS, where 1 equalled no understanding and 10 equalled high understanding. The results were somewhat surprising with an average score of just 4.3 out of 10.

Despite the lack of understanding of ROI, participants felt POS was still an important part of their marketing mix. Using the same scoring mechanism where 1 is low and 10 is high, respondents recorded a mean score of 8.6 for the importance of POS within the marketing mix.

As part of the research, we thought it was important to learn more about why brands and retailers felt they did not have a good understanding of their ROI and what the barriers to measurement were. An oft cited reason was being too time poor and feeling the pressure of delivering the next campaign or project. Some felt the responsibility lay with a different job role or department in the business. A few were concerned that conducting trials may actually have a detrimental effect on sales in stores where certain POS was removed. Also, many were not really sure about the best way to go about undertaking the research, or what metrics were already available to them, given the many variables in the retail environment leading to difficult to record ‘opportunities to see’.

With budgets under ever increasing scrutiny and constraint, surely it makes good sense to invest in activity which is proven to drive sales and increase overall return. This would enable budgets to be reduced in certain areas and allow for time, money and effort to be invested in, and focused on, POS that works best.

As we saw from the reasons preventing retailers and brands from undertaking ROI research, time is a big barrier. As research projects are embarked on, it is often the case that the initial brief grows arms and legs in terms of scope and people/departments involved. This slows the process down and often means the final brief becomes too complex – and expensive – resulting in inertia and projects stalling.

We want to ensure we are helping our clients to drive genuine continual improvement and best practice in POS. To that end we have designed some simple, bite-sized research options which provide marketing teams with immediate, useful and actionable feedback. This suite of options are quick to deploy and affordable, ultimately enabling informed choices on POS campaigns and ensuring budgets are targeted and maximised to deliver a greater return.

Options include test and control stores to measure the effectiveness of location and/or evaluate the best POS combinations. Compliance checks can identify which POS adds the most or least value, with shopper intercepts building a clear picture of what is capturing shopper attention.

We aim to make a genuine difference to the management of POS – understanding all areas of process, supply chain and effectiveness to significantly enhance ROI. We have seen that POS it is important within the marketing mix – let’s ensure it is always working as hard as it can be.