To say measuring the return on investment at the point of sale (POS) is difficult in retail is an understatement. It's not as simple as counting how many units a brand sold from an in-store display. You also have to track factors like display engagement to gauge if consumers are noticing. You have to consider nuances, like if a purchase wasn’t made today, were shoppers intrigued enough to consider the brand in the future? Then, of course, you have to take into account procurement and supply chain logistics.
Indeed, measuring POS ROI can be challenging, particularly when the results could impact future placement and investment. Knowing how much to invest and where — whether big, bold displays are needed or if a brand should focus efforts elsewhere — are essential questions but only cover overarching performance. Ideally, brands want to go deeper and learn things like which POS works best in which type of store? Does performance differ on specific days? Does it vary by product type or is it a luxury vs. commodity scenario?
The ability to effectively measure POS ROI is possible if you approach it in the right manner. Unfortunately, most fast-moving consumer goods (FMCG) organizations typically only have needed data depth on two points: What POS was sent to a store and its cost, and what level of product has been sold and its associated income.
Finding the Data in the Noise
There’s a lot of noise at the POS level, so it’s important to find and pull out the right data. When trying to truly get a grasp on ROI, be sure to consider such things as:
- Did the POS display actually arrive at the store and make it onto the show floor?
- Did it get stocked adequately and at the time anticipated?
- Did the display have the creative appeal first envisioned in the concept stages?
- Did consumers seem to interact with it?
- Did it cause them to enter the awareness, consideration or buying phase of the shopper journey?
Culling such data isn’t a new challenge but it’s always been hard to do at scale. That’s because it’s labor intensive, difficult to quantify, and tough to measure across multiple stores in various markets.
Boosting Your Ability to Measure ROI on POS
It’s relatively inexpensive and easy to track the delivery of POS into a store. Proximity-based technologies — e.g., ibeacons or QR codes enabling consumers to buy and interact with brands — can open up a wide range of ROI tracking. Still, this is limited to people comfortable with using their mobile devices in that way.
Some brands are turning to artificial intelligence (AI). An example can be seen in one company’s efforts to manage autonomous cars. It's now using AI to inform the policies and regulations needed for safe, reliable and socially responsible automated transportation services. By using CCTV as the input data, images can be interpreted at scale showing how people make decisions and behave when driving. The system then identifies and applies that learning.
Retailers have security cameras and can already see in-store activity related to their merchandise in a digital format. Other organizations are capable of crowd-sourced imagery that views POS stands and the consumers interacting with them. By connecting that with product sales, you can associate the actual investment of what people really saw along with its generated income.
And once you have that dataset, you can ask the AI whatever you like regarding performance metrics.
Measuring the Unmeasurable
There’s no one answer for calculating ROI on POS and tracking performance on a mass scale. However, make no mistake, the unmeasurable can be measured. One way is for brands to pick two or three stores, do a deep-dive, one-off research project, then use it as a baseline for predicting how other stores behave. Then again, they could use technology like AI for mass measurement, but that also requires massive data inputs.
Overall, try to avoid tracking ROI on a quarterly basis; it should be measured over a much longer period. A more meaningful guide is customer lifetime value (CLV). A one-off campaign doesn’t show the ongoing level of sales outside of it. Nor does it reflect other shopper purchases that were a result of the campaign, commonly known as the halo effect.
Regardless of the approach, learning about POS placement can help a company print less, save more and apply investments to the right stores in order to generate more sales. Furthermore, it gives consumers faced with various choices the right information and a much better experience.
Lynne Laba is head of U.S. for Communisis/Vox, a global permanent point-of-sale specialist, partnering with the world’s biggest brands to deliver value, resilience and sustainability from display and merchandising supply chains..
Related story: 5 Proven Strategies to Attract High-Value Customers and Maximize ROI
Lynne Laba is head of U.S. for Communisis/Vox. Communisis acquired VOX in 2021, which continues to trade under the Communisis banner in the U.S. The combined organization, recently acquired by Paragon, is a leading outsourced services provider. Partnering with some of the world’s biggest brands, we excel in creative engineering, quality management, production, and procurement, underpinned by a deep understanding of our clients, their customers and their operational environments. We operate in key markets around the world with a network of over 600 strategic production and supply partners, enabling us to source globally and deploy locally.