Gucci point-of-sale. Image credit: Gucci, Communisis
By Lynne Laba
Assessing return on investment (ROI) when it comes to point-of-sale (POS) is never easy, particularly in retail environments.
You need to monitor in-store displays to see if they are actually engaging shoppers. You have to understand nuances – for instance, if a consumer did not buy today, was she moved enough to shop the brand in the future?
Also, there are areas from procurement and supply chain logistics to evaluate and factor in as well.
POS ROI is not just about totaling the units sold off an in-store display, especially when results may influence future placement and investment.
Even understanding how much to invest and where – if bold displays are needed or money is better spent elsewhere – only addresses performance issues.
Brands also want to understand such things as the best POS approach for a given store, daily purchasing fluctuations and performance by product type.
Many fast-moving consumer goods companies only have necessary data on two points: knowing what POS was distributed to a store and its cost, and how much product has been sold and the income derived.
Lynne Laba
Tuning in
You can effectively measure ROI, if it is done correctly. There is a lot going on at the POS, so you need to filter out unnecessary noise and tune into the right data.
To that end, start by making sure the POS display made its way to the store, onto the floor and was stocked appropriately. Was it ready to go at the planned time?
Then, look at aspects such as if the display had the creative draw first imagined.
Was it successful in getting consumers to engage with it? Did it prompt shoppers to enter the awareness, consideration or purchasing phases?
This is the deep data that retailers want most but is difficult to unearth at scale. It requires a lot of effort from a retailer, particularly if it involves a number of stores and a variety of markets.
ROI and the impact of AI
It is not very difficult or expensive to track the delivery of a POS display to a store.
Proximity-based technologies, such as ibeacons or QR codes that help shoppers interact with brands, can enable ROI tracking. That is, if the user is up-to-speed on using her mobile devices to do so.
Artificial intelligence (AI) is offering tantalizing possibilities.
One company is using the technology to shape policies for safe and reliable automated transportation.
Using closed-circuit television as input data, the behavior of drivers and their decisions can be interpreted at scale, enabling the AI system to apply what it learned.
Retailers already have security cameras in place that digitally show in-store activity and inventory. Some can crowd-source imagery of POS displays and consumer interactions.
When linked to product sales, retailers can associate investments of what consumers saw along with generated income.
With such a dataset, the AI solution can deliver whatever you need when it comes to performance metrics.
Measured approach
There is no one way to determine ROI on POS at scale, but rest assured, it can be measured.
For instance, a company could select a few stores to start and do a deep, isolated research project, which could then provide a baseline for measuring the behavior of other stores.
Technology such as AI could also enable large-scale measurement, but then again, it would require huge data inputs at the moment.
A measured approach is required. Still, be sure not to follow ROI on a quarterly basis – t must be evaluated over a greater period.
Also, many feel an arguably more effective guide is customer lifetime value, which encompasses the profit made by a brand from a customer over a lifetime of interaction.
REMEMBER, A ONE-OFF campaign will not show ongoing sales produced outside of the effort. It also will not reflect further shopper purchases driven by the campaign.
Whatever the approach, understanding POS placement can help a company save money and make investments in stores that will produce greater sales, while delivering consumers a much better shopping experience.
Lynne Laba is head of U.S. for Communisis VOX, Chicago. Reach her at lynne.laba@voxsp.com.