Point of sale promotions go high tech

llANY home centers use the prelUl recorded videotape monitor as a point of purchase marketing device, but technology is opening up new opportunities for electronic marketing.

The use of new r-co-based shelf edge systems is expected to more than double in the next five years. Relatively inexpensive and product specific, they can be placed next to the products they promote. The sales impact is easily determined.

Almost 500/o of the 10,300 home centers surveyed plan to use this type of point of purchase device in the future. It is expected to be second only to the videotape monitor. The manufacturer typically pays for the unit with the retailer providing space.

The primary goal of electronic marketing is to increase sales by converting shoppers to buyers, according to Linda Hyde, author of In Store Promotion Power: Electronic P-O-P Communicatiors. She says this can be achieved in several ways.

One way is providing information to enable the customer to make intelligent purchase decisions. Another is increasing multiple item purchases by cross selling related merchandise and add-ons. Other ways stimulate impulse purchasing and attract or create interest.

In addition to videotape monitors and lco-based shelf edge system, in-store customized radio networks have been successful for retailers selling related categories of merchandise where the consumer is likely to shop nearly the entire store on a given shopping trip, Hyde points out. These should work well in large home centers where a customer can be directed to a special promotion.

Interactive kiosks which provide information about products will be widely used in the future. Approximately 500/o of 10,300 home centers surveyed and 250/o of 13,400 lumberyards expect to use them by

Story at a Glance

A review of electronic sales aids... prerecorded videotape monitor is most effective in home centers. LcD shelf talkers. in-house radio, kiosk uses to increase.

The Merchant Magazine

1995. Transactional units (those where the customer can actually complete a sale) are in the minority, but are expected to increase about l5ol0.

Informational kiosks have been widely tested. In many cases the manufacturer sponsors the electronic kiosks as an advertising tool and a customer service function offering product information. The retailer simply provides the space.

Home improvement centers can use interactive kiosks to provide video demonstrations of d-i-y projects and information about products. With store staffing problems becoming more severe, the use of information systems for how-to applications will gain greater acceptance, Hyde said.

"Electronic marketing cannot be used only for the sake of applying a new technology with little thought to how it will affect the selling process," Hyde said. "Customers are buying merchandise, not new ways of marketing. Unless the merchandise is right for the retailer's target customers, it doesn't matter ifit is marketed in traditional or non-traditional ways. Marketers must focus on good fit electronic merchandising strategies that are appropriate to the type of merchandise, to the sales environment and image of the outlet, to the target audience and to the consumer's shopping process and buying habits. "

The economics of electronic marketing must be carefully planned and understood. Intangibles, such as increased customer service, need to be factored into the analysis. Even for systems available at no out-of-pocket cost to the retailer, there is often the cost of space to consider. Regardless of cost issues, however, retailers will likely limit the number of electronic p-o-p systems they will use due to space, in-store clutter, and sensoryoverload. Consumers should feel assisted, not assaulted, by the volume of messages being sent in-store.

Retailers must distinguish truly helpful electronic marketing devices from fads or gimmicks. Successful applications focus on convenience, information, advice, entertainment, and other real consumer needs, not on the potential of the technology.