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Is your company’s investment in POS display worth it?

POS-Display (Point of sale) is a standard part of all BTL marketing budgets for retail. Essentially POS-branding relates to all activities done inside the retail store, closest to where the consumer makes the purchase decision.

These could include standees, signage, banners, posters, danglers, free standing units, shelf decorations and other different kind of units which brand the outlet. These displays are responsible for communicating offers, information about launches and most importantly the brand image.

It’s a long established fact that POS display is vital for retail marketing, so let’s not reinvent the wheel here. The point to consider is whether you’re choosing the right display that correctly connects consumers with your brand. In a recent discussion with Mr. Suresh Narayanan, MD of Nestle India, he mentioned how to attributed the rise of the Maggi brand in 1983 due to one correct POS move. Since Maggi was unknown back then, retailers were not ready to give additional space for POS. The team then created hanging basket displays which took no floor or shelf space, and hung them from the ceiling. This appealed uniquely to the consumers, and after this breakthrough point the brand never remained the same again.

There can be some serious short term and long term consequences of choosing a sub-optimal strategy for POS marketing. In the short term, we could see a wasteful investment and no rise of sales. But choosing incorrect POS display can result in long term deterioration of a brand and erosion of the image of the brand.

Let’s see what are the most common mistakes brands could make in their POS display process:

  1. Not staying up to date with technology, and paying too much: POS manufacturing technology evolves really fast. But faster than that, are ideas and solutions from creative POS makers that solve pain points in the industry. Being slightly immodest, I will quote our own example – we have developed outdoor-grade POS display stands which are knock down, and sturdy and end up saving companies more than 50% as compared to their traditional wooden counterparts (www.amitoje.com for more information)
  2. Inferior quality, due to pricing restrictions: This is one of the most dangerous mistakes to be made. A lot of companies do not understand the wide-ranging implications of being only price focused when discussing POS. Instead, changing mindset to ROI focussed can do a lot of good. Consumers judge the quality of the product even before buying it, and associate it with the quality of the packaging, the display it’s kept in, the branding done around it. Imagine entering an electronics showroom with a signage having faulty tubelights having your brand name. Imagine what you’d judge about the store, and the products that carry your brand. There can be books which can be written on the psychology of buying and first impressions, and let me recommend you one: To further understand the impact of priming consumer mindsets, I suggest you read Pre-suasion by Robert Cialdini.
  3. Evaluating POS display in isolation: Since your displays are kept in a competitive retail environment, it always makes sense to test them in such an environment. Even while approving designs in 3D, a real environment with accurate retail depiction will help one understand how, and if, the display will hold out against competition.
  4. Not doing pilots: The method of scientific discovery suggest testing hypothesis before declaring them as theory. In the same way, it is essential to do a pilot and see how a piece of POS performs before rolling it out. It is tempting to trust our gut, and save time and money and planning, however the consumer space is a complex plane riddled with unpredictabilities and pilots are the only way of being more certain your investment will not go waste.
  5. Following established trends and not exploring alternatives: This applies to almost everything. We have sadly seen a lot of companies following old established methods, that cost more and provide little impact, instead of exploring a lot of new possibilities which save cost and increase visibility. The POS branding game is one of psychology. It is advisable to associate with partners who understand marketing and it’s psychology – and these partners will deliver the results.
  6. Not measuring ROI: After all is said and done, POS is meant to increase profits. If you’re implementing displays year and year, not measuring the impact, playing blind might have you pay a big price someday. This is one of the most difficult, and most essential aspects of POS display.

The purpose of this article is to help you determine whether you’re making any of these mistakes. The verdict however, will only be realized by measuring ROI. That being said, one must be cautious that ROI can be short term (and measurable) and long term (and not immediately measurable), so we need to factor that in our ROI calculation.

Amitoje India provides POS solutions to some of the largest retail companies in the country and produces them in bulk. Living in the retail branding business day and night has made us see clients making all these mistakes. Sometimes we have been able to help, other times our clients are themselves entangled in corporate process chains and bad decisions propagate through generations of marketers.

Contact us to know how we can help with effective POS branding.

Fully foldable triangular standee (or table)

triangular_standee

We present to you this time a fully foldable and collapsible triangular standee. Made from sunboard with digital printing, this is a 3 sided stand that is transported flat but can instantly transform into a full blown table. With a top cover that fits easily, it’s convenient to keep lightweight items on it.

The print quality is breathtaking and the ease with which the literally product installs itself is exemplary. This could also be used as a POPup stand since it can be easily folded and moved to a different location.

Innovation: Flat-pack modular POP display that cut down cost by 50%

Innovation: Flat-pack modular POP display that cut down cost by 50%

We at Amitoje India care about innovation, do you?

Watch the concept video here:

The total cost of getting a product stacking unit to market includes
1. Fabrication cost
2. Packaging cost
3. Shipping cost
4. Installation cost

We’ve developed a range of FSUs (Free standing units) and CTUs (Counter top units) which reduce all these costs and can save more than 50% on your total cost to company. Some features are:

Fully Modular and flat packed

Cutting packaging cost: The whole FSU comes packaged in a 3″ deep corrugated box as shown in the video below.
Cutting shipping cost: Since the unit is flat packed, this cuts the shipping cost by more than 70% since a fully fabricated unit is shipped on a volumetric basis. Moreover, chances of breakage are high and we need a good quality expensive wooden packaging for a non-modular unit. This however, cuts the packaging and shipping costs since now it’s very sturdy in transit and is charged on weight basis by logistics providers.

Easy assembly without tools

Cutting installation cost:This unit can then be assembled on-site without the help of any tools and by any person without any kind of special training. We’ve made it so simple, that a 10 year old can assemble it within 2-3 minutes. The side panels click fit into the back and shelves fit into pre-fixed grooves.

Much cheaper

Cutting fabrication cost:Since this is an automated printing and die cutting system, no labour is required to fabricate the unit thus saving huge costs. Our talented product team has optimized material thickness in such a way as to make it extremely sturdy but still lightweight and cost efficient.

Outdoor friendly

We’re using a special material called Moonboard to print and fabricate these stands. Moonboard is extremely sturdy and rigid and allows us to print directly using UV flatbed technology. The material is fully waterproof and fire-resistant, and UV inks are fadeproof even when placed outdoors. We can now directly replace metal wire stands with such displays.

No peeling or scratching

Since the UV print is done directly on the material instead of pasting a layer of printing self-adhesive vinyl, there are no peeling or scratching problems observed over time and the print is permanent.

Extremely sturdy

We’ve tested for a load of more than 10-12 kgs per shelf, however, if your product is heavier than that, we can make adjustments on demand and increase the loading capacity without damage to the unit.

Elegant and aesthetically appealing

Even though we’ve provided all these benefits, we’ve made sure that the product unit still looks as good and neat as any other custom made unit. It is not flimsy like corrugated displays and much more appealing than a metal wire display.

6 Reasons why demo units and highlight units are an excellent sales mechanism

At Amitoje India, we help retail clients with customized fabrication of demo and product highlight units. . But why are they so useful in generating sales ? Let’s find out.

1. People don’t have time to read.
It’s a busy, fast moving world. Nobody has the time or patience to read catalogs, posters or compare notes. Your branding might carry 20 points which makes your product the best, but you need just one or two to appeal and help make a purchase decision.

2. Highlighting your USP appeals to your niche
Every product has a USP – Unique selling proposition. Instead of fighting competition on all points, it’s better to just highlight what you’re best at. The people who really care about that will choose only your product. You will capture that niche if you can show them immediately that you understand what they care for.

3. Demo units make consumers curious
Surround a product with a highlighter or a demo unit, and people will want to see whatever you tell them because they find it different. They will want to see the results your product produces.

4. People never forget what you demonstrate to them
It’s easy to forget features, specs and offers. But if you demonstrate something to someone, they will never forget it. That creates a permanent branding in your consumers mind and even if he/she does not buy your product immediately, this is still a win-win situation.

5. Excellent ROI – demo and highlight units
A signage is a sizable investment. A lot of times, signage look really good the first day but their aesthetics deteriorates with time. As an end-user, you will not be able to tell just by the look which sign will last long and which one won’t. Only the manufacturer has that information. Make sure you rely on a good company, which offers good quality signage so that they look attractive for years and not months.

6. What if you can’t demonstrate your product? Highlighting it makes it look premium and special.
Not every product can have a demo unit. But a great replacement for a demo unit is a highlight unit. Sure, it takes up more space but it’s worth it because highlighting your product separates it from the clutter. Just have a custom built unit around your product subconsciously portrays it’s importance to the consumer.

We can help you with customized fabrication of such units and elements. Have your team think of an innovative design to showcase your product and come to us to get help on how it can be made.

 

 

Acrylic fabrication customized

Orient Power Saving fan unit
What better way to show the power saving feature of a fan than a unit which measures power consumed by two fans in comparison. Anyone who cares about their monthly bill will be convinced to go in for this fan.

 

 

Acrylic fabricated custom unit for Samsung

Samsung S5 Demo unit
We helped Samsung with this very innovative demo unit for their Galaxy S5 phones. This demonstrates the HDR function which greatly improves pictures in contrant lighting.

 

 

Acrylic display fabrication

Signature 8PM highlighter unit
This is a LED lit highlight unit for a bottle of signature 8PM whisky. This immediately sets this product apart from everything else in the cluttered store and conveys that we’re selling a premium product.

 

What happens when you push our double sided cutout

You’ll see.

We’ve launched these a while ago, our customers have loved it and thousands have been made by us. But this is the first time we’ve made a video showing how stable our novel design of a self standing cutout can be. Click below to watch the video.

Problems faced while switching from retail to online retail (ecommerce)

E-commerce is trending but what seems like a “low-investment-fast-growth” business idea to entrepreneurs might not be an accurate assumption. Treat this not as discouragement to start something new, but as a caution note from a person who has faced/seen people facing such problems. If you do have time and money, invest it into something everyone else is not doing. E-commerce is becoming cluttered very quickly and this creates only problems. Read on to understand the major pitfalls of e-commerce as it exists today. These simple points will help you understand the problems a novice entrepreneur or a retail will face when stepping into e-commerce.

1. Capital Intensive: E-commerce is retail in disguise. In fact, it is a bigger, hungrier form of physical retail and all the troubles like warehousing, inventory and supply chain come along. An e-commerce store is expected to have a larger range and as well as cheaper prices. Plus delivery times are always an issue so stocking inventory becomes a must in most cases – and here comes in the role of capital. So either start looking out for investors (which is not an easy task unless you’re a big-shot) or get ready to invest huge sums of your own money. But wait, if you have huge sums of money, why are you throwing it down the e-commerce drain? Buy some gold.

2. Low profit margin: This comes as a shock to anyone outside the e-commerce industry but is obvious to people inside – everyone in India (where I am from) is currently bleeding investor money. Everyone is making a loss. Even the biggest names you hear in the industry (yeah, all the karts, marts, hearts etc) are burning millions every month to acquire customers, reach a massive scale and waiting for others to die out before they can start making any profits. They’re taking returns, replacing products and pampering the consumer while bearing all these expenses just to become larger. There are several reasons why good profit margin is a far-fetched dream for companies:

a. Unit economics: The biggest mistake any uninformed entrepreneur could make is the negligence of contributions like payment gateway cost, packaging cost, shipping and handling cost and effective cataloging cost of articles to the overall margin. In e-commerce, the sourcing margins and effective margins are very different mostly because of these costs. Thus some articles are a better fit for e-commerce and some are not since even on very huge volumes, unit economics don’t work out to be positive. If the selling price of the item is low (and hence absolute sourcing margin is also low), the gateway charges, packaging, shipping and cataloging cost will easily overpower the margin and hence lead to a loss in the transaction.

To head one’s head around this, I coined a term called profit density defined as the ratio of sourcing margin to the additional e-commerce costs incurred in selling it (a major contribution of which is usually shipping cost). Profit densities are different for different categories of products. Books and beauty products have an extremely low profit density and real jewellery and apparel have a relatively high profit density. But since the universe has the habit of leveling things out, items with high profit densities are slow movers and harder to sell online and one’s with low densities are quicker and easier.

b. Cash on delivery: Since it has now become almost necessary to offer a cash on delivery service, it is very counter intuitive to know that all logistic companies actually charge to collect cash on your behalf. They actually charge a huge fixed amount (could vary from as Rs. 30 to Rs. 150 (that’s 0.5 to 2.5 USD) or sometimes even more per package depending on the provider, total volumes offered and also package value) to use your cash! This strongly degrades the unit economics.

Secondly, we all know how valuable cash is for a startup and in such an arrangement a lot of your cash-flow is stuck with the logistic company because they will take a certain amount of time to remit the money they’ve collected on your behalf.

Thirdly, almost always the logistic service provider will actually owe you more money (the cash they collected) than you owe them for delivery, thus making dealing with them a little more difficult (read hell).

Fourthly, customers are much more likely to return packages in cash on delivery cases since they haven’t paid for it. Post which the business has to incur double the shipping cost, lose out on precious inventory for a long time and still maybe end up with something that cannot be sold again, and a customer who will never buy again.

c. Lost, damaged articles: Business owners forget to take into account lost and damaged articles – which neither the service provider nor the customer will be liable for. Who else is left to bear the burden of lost/damaged inventory? This is especially harmful when you’re counting on low margins with huge volumes.

d. Competition: Consumers expect you to be the cheapest. Since you’re on the Internet, you save on the rent of a physical storefront and can pass on that benefit to the customer (very faulty premise which every customer carries in his/her mind). Moreover, pricing on the internet is very transparent so you have to keep a rock solid heart and offer the lowest margins humanly possible. In fact, cash rich competition will also sell at a loss just to drive you out of business. Competition will do everything – low prices, expensive advertisement, relaxed return policies, free shipping etc and these things start becoming must-haves instead of differentiators.

3. Logistics co-ordination and reconciliation: Since you cannot deliver everywhere all by yourself (at least initially), you will need to be dependent on logistic service providers. Fortunately or unfortunately, the performance of your service provider will determine the goodwill you create with your customer. It is certain that you will lose good and loyal customers due to a 3rd party’s poor performance and there is nothing you will be able to do about it. Customers will call your company and your operators will be recipients of heavy verbal abuse from disgruntled customers. Your operator will have no answer because they don’t know what has become of the package after it left your premises. Account reconciliation with service providers is also a similar harrowing experience wherein every kind of case and exception that can arise, will arise. Moreover, each provider will have its own format of reconciliation and reporting which you will need to adapt to.

4. Super strict IT requirements: If one of your founders is not a tech genius, quit right now. IT is the backbone of an e-commerce company and you will need it at every nook and corner of your business. The tech team will need to understand the entire business from end-to-end and develop technology to support every operation along the way. This is one section where mediocrity will fail you badly. An e-commerce company is not just “a website” which firms will make for a few thousand rupees. If you have any intention of making it big, don’t ever think of outsourcing this.

5. Marketing and SEO: Are you a marketing genius? Are you full of ideas on how to sell your product? Can you see how the current companies are doing it wrong? Think again. Marketing for an e-commerce company is a completely different ball game. It requires more of tech knowledge than anything else. You will hear terms like SEO, SEM, SMM floating around in the market and you might not understand them completely, but since you trust your marketing gut you’re brave enough to venture out into an unknown territory. The smarter choice is to keep someone who’s experienced in the field of online marketing close to you or of course to experience and learn yourself. The even smarter choice is to understand that it’s not the same as regular marketing! There are many ways of getting traffic and sales on your site, but they will require a lot of expertise, experimentation, analytics, research and dollars. Ranking #1 on google is like snatching flesh from a hungry lion – it’s hard!

In e-commerce marketing, there are only two aims to fulfill. Generate trust (by highlighting USPs and being persistent) and make yourself discoverable (bring traffic). The former will need time and effort, the latter needs money. In the competitive market out there today, advertising online has become so expensive recovering your spend seems utopian. Again, if you just started up without investor money you will face huge problems in this regard because today the online consumer has unlimited choices to buy from. If you already have raised investor money then there’s no point reading this – you can’t back out now.

6. Vendor management: If you’re thinking of sourcing from various vendors, you might be fine in the short term but this becomes a huge issue when the numbers increase. Every brand/manufacturer/distributor will have their own styles of packing, logistics, billing and measurement. Reconciling all of them is not insurmountable but a very cumbersome task. It is not possible to have everything in stock and usually you will end up accepting orders for items not in your inventory. Vendors in India will never be able to provide a synchronization system wherein you will be able to understand if item is actually in stock even with your supplier(s) for a long time to come. Moreover, manufacturing defects will then become your headache since you’re the seller and your goodwill is at stake now.

If you are a manufacturer and want to extend your physical store, this might not apply but the other problems still live unscathed. But even in that case since you cannot produce everything, you will ultimately end up sourcing from other suppliers. The better solution might be to become a vendor to already established e-commerce websites.

7. Distribution networks: If you want to sell grocery, pharmacy or other items wherein you plan to tie up with retailers, be aware that you will always end up with a very rough experience for the customer. The operations are hugely manual and hence cumbersome and delivery time is of utmost importance.

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E-commerce is currently booming and everyone wants to start a website to sell stuff. What people miss are some subtle points that make e-commerce a difficult creature to rein. A genuine question that arises is that if no one is making profit, why are people continuing, why are investors investing and why are new e-shops opening everyday. The truth is everyone is playing the top-line game – not worrying about the bottom-lines at this moment. Companies want to increase their top-lines to a very large scale and rule their respective markets post which their marketing spend would decrease and a huge customer pool would have been accumulated. Beyond this point profitability would be possible but there would only be a handful survivors.

The only exit strategy that remains for e-commerce companies is either an acquisition or an IPO. Fire sales and shutdowns happen all the time but they’re not noticed by a lot of people – examples are Letsbuy and Taggle. So if you’re fully convinced that e-commerce is your life path, best of luck but be very cautious of the problems described above.

What’s your opinion?

 

By |August 27th, 2014|Business|Comments Off on Problems faced while switching from retail to online retail (ecommerce)|
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