Digital Point of Sale: Early Movers Can Seize Big Opportunities

Point of sale marketing has been around since the very earliest days of retailing. It involves showcasing products at the precise moment that a shopper is prepared to make a purchase.

In physical retail stores, this means negotiating amount of shelf space your products will get in the aisle or displaying goods at the checkout stand or the store entrance. It can also mean securing strategic shelfspace right next to a specific brand, printing ads in a weekly circular, or starting a sample program within the confines of the retail store.

It is well known that point of sale marketing drives actual sales, and that no piece of marketing can be as effective as the packaging in which a product comes. So, merchants typically want to have as much product as possible in a store, where customers can see it, and let the package explain what the product is.

Because it’s so effective, U.S. brands spend hundreds of billions of dollars each year on point of sale marketing. But until now, most of that money has gone into physical stores and not digital. As the eCommerce industry continues to grow, it’s time to take a look at just how much more point of sale can accomplish in a digital world.  

Today, about 1 in every 10 retail dollars gets spent online. Though it’s much smaller than physical retailing, the digital marketplace generates fantastic data – what products get purchased together, what pricing drives the most sales, reviews showing what customers think of your products, and your competitors’.

All of that data can be analyzed, often in real time, helping marketers make better choices about how and where to buy online ads for maximum returns. Advances in machine learning and data science and sophisticated new software platforms are generating learning behavior from algorithms, driving optimizations for specific outcomes.

This adds a new layer of accountability to point of sale marketing spend that simply wasn’t available in physical stores. It helps companies make better use of channels like Amazon and separate themselves from the rest of the pack by capturing shoppers that they have not been able to reach previously.

Still, we're just starting to see the adoption of new tools focused on digital point of sale opportunities. There’s a lot of inertia to overcome, and a lot of perceived risk in taking a different approach form what’s been working for decades. They don't fire people for doing the same thing everyone has been doing.

In fact, we’ve seen this pattern before, pretty much every time a new advertising medium comes along. When radio was launched, it took time before ad spending caught up to the audience size. Marketers were more comfortable with newspapers and other print options. The introduction of TV was no different.

More recently, we saw this kind of reluctance to embrace search advertising. In the internet’s early days, most brands spent their money on portal and display ads. They didn’t realize that search advertising was a different opportunity, and that customers were utilizing search to consider new products to buy.

Today, the shift in consumer behavior is too large to ignore. We’re seeing larger and larger percentages of consumers shopping online.And we’ll eventually see an equal percentage of those budgets moving into online, including point of sale marketing -- once brands understand how it works, and how it leads a shopper on the journey through finding, researching and ultimately purchasing a product.

That means there’s an enormous opportunity ahead of us.Merchants can now place their products on the digital shelves of ecommerce and get instant presence to the more than one hundred million customers each month and drive sales. And for some categories, online sales are well above that overall10 percent benchmark. Diapers, for example, are big online sellers, because it turns out that busy parents really appreciate the convenience of having them shipped to their house. Online point of sale ads, combined with the convenience of free two-day shipping like Amazon Prime offers, are very effective for products in general.

Companies that haven’t yet made the investment switch of their point of sale marketing budgets should remember a few things:

One: Don't throw away your knowledge of point of sale when you embrace digital. All of that knowledge will be instrumental to driving your business online. The difference is the new tools, platforms and data that will be available.

Two: Don’t confuse eCommerce marketing with branding -- it’s much bigger. eCommerce is about moving product at the point of sale. You need to think at scale to grow your business through eCommerce.

And three:There’s plenty of advantage in moving first while your competitors are dragging their feet. You can reach customers at Amazon and other digital marketplaces while rivals are still only targeting Google or Facebook. Digital point of sale marketing is the fastest way to reach customers where they are actually spending their money.

The physical retail world has shown us the value of point of sale marketing. Its track record of driving sales is impossible to ignore. Now it’s time to put that knowledge to work with cutting edge technologies that will drive eCommerce to new heights in the years to come.

Bobby Figueroa
CEO