The point of sale comes to life

Going shopping on an empty stomach isn’t a good idea. And this has even been scientifically proven: In an article published on the scientific platform PNAS, researchers reported that people who are hungry spend more money than those with a full stomach. Shopping without a prepared shopping list can also be expensive: According to a study by the University of Pittsburgh, people without a shopping list make more impulse purchases—and spend more at the register than those who have written down what they need.

«You have to find a way to stop shoppers in their tracks and pique their interest (…).»

This is good news for brands that want to reach customers at the point of sale (POS), as they can be particularly effective with hungry impulse shoppers. But marketing activities at the POS appeal to all shoppers, whether they’re hungry or not—and they do so successfully. André Henneboh, Managing Director of Frankfurt-based Serviceplan Activation, is convinced «that today, more than ever, the POS is the ‚point of truth,‘ since this is where the actual purchase takes place—a fact of enormous significance in times of price pressure, inflation, and economic uncertainty.» (see also the interview below).

Special prices are popular

The fact that price plays a key role at the point of sale is also confirmed by the 2023 POS Marketing Report from Medialog, POS Pulse, and UGW. According to the report, promotional prices have the greatest influence on purchasing behavior—even more so than loyalty card bonuses, special-size packages, product samples, bundles, flyer offers, multi-buy promotions, and coupons. «Direct monetary benefits trigger the most impulse purchases,» explains Gernot Lingelbach, managing director of the marketing agency UGW, who initiated the report. The expert notes that promotions at the point of sale must overcome three hurdles before the purchase decision is made in order to be effective: «They must manage to stop shoppers in their tracks, pique their interest, and then help them overcome the barrier to purchase.» If this succeeds, a product is highly likely to end up in the shopping cart. The survey shows that shelf stoppers, in particular, influence shopping behavior. For 44 percent of respondents, they are the advertising tools with the greatest influence on purchasing, followed by posters and billboards in the entrance area (36 percent) and offers displayed on screens (34 percent).

The POS Is Going Digital

And it is precisely this last figure that is likely to have increased in the report’s new survey, which will be published in early 2025, as the importance of digital POS measures continues to grow. All customers carry the bridge to the digital world—such as a QR code—right in their pockets in the form of their smartphones, giving them access to sweepstakes, games, or other digital offerings. This creates added value, fun, and loyalty among customers, while providing companies with a wealth of relevant data. «Data-driven approaches and retail media enable brands to address target audiences directly at the POS with relevant content based on real-time data. By linking in-store experiences with digital tools such as apps or gamification, targeted activations are created that serve the needs of both consumers and retailers. This ‚thinking from the POS into the digital extension‘ offers brands effective alternatives to price wars.» A campaign by Serviceplan Activation for Bitburger demonstrates how this can work in practice: A concept for the UEFA European Championship used tournament tickets as an emotional draw, featuring clear messages and geolocated prize distribution. Flexible setups and a digital extension within the Bitburger app created a strong, targeted presence at the POS and ensured lasting customer loyalty.

Retail Media as a New Building Block

One relatively new segment of POS marketing, in particular, is booming: retail media—that is, advertising that runs directly on retailers« inventory, at the point of sale, in marketplaces, and in online stores or apps. According to IAB forecasts, the European retail media market could reach a volume of 25 billion euros by 2026. »Retail media is evolving into a distinct media genre—the course is being set now,« states the latest EHI study, »Retail Media in the German Retail Sector.« »Retail media is becoming more important,« confirms Gernot Lingelbach. This is because it serves as another touchpoint for brand messages. »And the more touchpoints there are, the greater the chance that the message will get through.« Retail media enables targeted, relevant, and measurable advertising right where customers are on the verge of making a purchase decision. »Private-label brands can use it to address specific target groups directly at the POS. For brands, this creates a direct link between awareness and consideration: Customers often make their purchasing decisions based on targeted incentives in apps that can be displayed directly at the POS. Retail Media uses retail as an interface to precisely target consumers in their shopping environment. This increases efficiency and improves the ROI of POS campaigns,” explains André Henneboh.

«Retail media is evolving into a distinct media genre—the course is being set right now.»

Artificial Intelligence at the POS

Artificial intelligence is also making its way to the point of sale (POS): For example, the Teekanne brand uses the AI-based platform Brainsuite to optimize its POS materials and aims to target consumers more effectively. With the help of AI, the company tests various design options and analyzes factors such as attention-grabbing appeal, simplicity, and emotional impact. UGW also uses AI and even won an award for it at the Best Retail Cases Awards 2024: In a promotion for the probiotic drink Actimel, uploaded receipts were automatically checked by AI against various eligibility criteria, and the purchase price was refunded upon successful validation. 50,000 customers participated, and the use of AI made the process significantly more efficient.

In addition, technologies like augmented reality are turning the point of sale into a digital experience: For example, this past spring, Publicis Groupe Germany used AR and VPS technology to transform a supermarket in Düsseldorf into a real-life Pac-Man maze for the Oreo cookie brand. Customers could scan a QR code to play a game on their phones, collect giant virtual cookies, compete against ghosts, and enter a contest. The supermarket became an immersive Oreo world.

360-Degree Campaigns

It’s important that the POS promotion aligns with the brand and its other communication efforts—as a component of a well-planned 360-degree campaign, rather than simply aiming to «engage shoppers louder, faster, and cheaper,» according to UGW Managing Director Lingelbach. «Many promotions are too focused on hard selling. But it shouldn’t just be about some random contest; rather, a POS promotion should truly stem from the core of the brand.» For many today, «brand activation» means “above all, activation—and too little brand.”

Interview

«At the POS, success goes to those who understand retailers and customers»

André Henneboh is the managing director of Serviceplan Activation.

m&k: What does a well-executed POS campaign need to have these days to be successful?

André Henneboh: Several factors come into play here—awareness plays a central role: The campaign must not only stand out, but also be relevant and emotionally engaging. The added value should be immediately apparent. Simplicity is also essential. The message at the point of sale must be understandable in just a few seconds; more complex mechanics can then be incorporated into the digital extension. Interaction with customers is equally important. Elements such as gamification or contests actively engage them, which fosters lasting loyalty and ongoing dialogue. Feasibility also plays a role. Campaigns must be practical and implementable to succeed in retail. Close coordination between marketing and sales is essential here to make optimal use of all touchpoints.

How important is POS marketing in the marketing mix—and which companies should take action in this area?

The point of sale is where purchasing decisions are made. The winner is whoever understands retailers and customers. Brands that fail to draw attention to themselves through promotions and campaigns will go largely unnoticed by customers and ultimately won’t be purchased. This is especially important for brands that don’t have a large base of loyal customers, as well as for those operating in a highly competitive environment.

What role do digital POS measures play?

Digital campaigns bridge the gap between brick-and-mortar and digital worlds, offer a seamless customer journey, and enable continuous interaction and data collection. However, traditional POS promotional materials and well-thought-out placement strategies remain an integral part of the mix and play a crucial role in brand visibility and sales promotion.

This article first appeared in the m&k print edition 11-12/2024.