Placement variances: An empirical study on point of purchase (POP) displays

Abstract

Over the years, advertisements have created a clutter in the consumers’ minds making it very difficult for brand recall and recognition. With the increasing number of modern retail stores, the significance of promotion at the store level has increased. These kinds of promotional activities vary from employing staff personnel to engaging the customers at the store through various events. One of the simpler ways of communicating about a brand is by the use of point of purchase displays at the stores. Point of purchase displays constitute the last mile advertising opportunity used for promoting a brand. Point of purchase displays are vehicles that aid purchase decisions of customers. Their unique characteristics can help make them stand out of the clutter and enter the consideration set of customers. They also act as information sources and help in making cognitive decisions on the product. With 76% of purchase decisions of a customer now being made in store1, point of purchase displays assumes greater significance than ever before. As a logical consequence, efforts are on to identify factors which make a particular in store display successful in fulfilling its purpose: be it in terms of driving purchases, switching brand loyalties, maximizing period sales or increasing brand awareness. Conventional research so far has enumerated various factors for the influencing capability of a POP device. One of the key variables identified and isolated for the effectiveness of an in store display is the location that it is present in, inside a store. It is quite natural that when a customer enters the store setting, the reaction of the consumer to POP displays seen at the start, in the front of the store, will be vastly different from the reaction to similar displays at the back of the store. This makes particular sections and zones of a retail outlet more valuable than others. From the marketer’s perspective, efforts are now being undertaken to identify the optimal touch points for its brand in the retail environment as opposed to random placement of offer boards and display devices inside a store. From the retailer’s perspective, use of real estate inside a store for the placement of in store displays, in order to drive category sales assumes great importance. Knowledge of which categories sell where goes a great way in driving impulse purchases and hence the retailer needs to understand where a POP device could have maximum impact. This two-fold benefit accruing to both the product firm as well as the retailer, results in certain areas of the store, such as billing counters, hotspots for placing point of purchase displays. However, considering a multiplicity of retail formats currently in function in the Indian marketplace, we also see significant variations in the use of point of purchase displays across these store formats. An in store brand display in use for the supermarket inside a mall may not be the same as the one used for a mom-and-pop store or a Kirana store. Hence, in addition to the generic location of a POP device within the store environment, the context that the device resides in, also assumes significance. In this paper, we investigate the placement of point of purchase devices across different store formats and analyse the reasons for differences and similarity in placement statistics (By ‘placement’, we refer to the location and hence, dispersion of POP devices across the retail layout). The ‘Literature Review’ section provides an overview of secondary research articles relevant to the issue at hand and also points out the need for the integrated perspective (location + retail format) that the paper discusses. The ‘Data and Methodology’ and ‘Results’ sections details the procedure followed to establish the importance of location in various retail formats and discusses the results of the experiment. Finally, we discuss the ramifications of the results in the ‘Managerial Implications’ section, outlining the key learnings and takeaways.