Magazine Article | December 1, 2002

IT Department To Marketing Department: Who's Buying?

Source: Innovative Retail Technologies

Before your next customer display or receipt printer upgrade, consider whether your marketing department deserves a say in the buying decision.

Integrated Solutions For Retailers, December 2002

Marketing is everywhere. You can't avoid it, and if you work in retail, you shouldn't. You want to take advantage of every opportunity you have to keep your image in front of the customer. Vendors of retail IT products know this, and the products they sell reflect their desire to get the attention of retail marketing departments and technology buyers alike. Presenting customer displays and receipt printers as marketing vehicles is a no brainer for many vendors of customer-facing technology. Stuart Siegel, VP of sales and marketing at point of service display maker IEE, Inc. (Van Nuys, CA), and Jim Stetson, EVP of sales and marketing at receipt printer manufacturer TransAct Technologies, Inc. (Wallingford, CT), are among them.

1. How can receipt printers and customer displays help a retailer's marketing effort?

Siegel: Pole displays and price checkers that can display graphic information offer avenues for increasing sales at the POS, or further promoting allegiance through customer loyalty programs. They can help promote upcoming events, sales, and special offers. The trick is to do it without disrupting the store's traffic flow. You want to leave a favorable impression without being lumped in with the intrusive dinnertime telemarketing call.

Stetson: Printing color coupons and brand messages on receipts is far more effective than most print marketing vehicles. We found that the redemption rate of circulars and coupons mailed to consumers at home is less than 3%. The redemption rate of coupons given to customers at the register is well over 50%. This redemption rate is achieved at an expense much smaller than that of mailed collateral. Retailers are already spending the money on printing receipts. Printing them in color and with messaging gets more bang for their buck. We found that only 31% of customers actually look at receipts printed in black and white, whereas 81% will take a second look at one printed in color.

2. What retailers can benefit most from marketing through receipts and customer displays?

Siegel: There's lots of demand for graphic-capable displays from grocers and department stores. It's the forward-thinking, high-tech stores who buy them. Otherwise, there is plenty of resistance to the cost from the retail market. But grocery and department store suppliers have a big stake in this type of marketing. They can provide advertising for the display or promote compatible products at the point of purchase, for example. Private labelers also have a stake. If a customer walks up to a price checker with a Stanley hammer and scans it, the display might tell him the hammer costs $19.95. The retailer can program the display to list its own private label hammer as an alternative purchase. But retailers have to be careful in situations like this if they plan to sell advertising space on the display to suppliers. In the case of the hammer purchase, Stanley probably won't be buying advertising on the display if you're underselling them. It benefits the retailer though, because while the private label hammer might be a lower dollar value sale, it will often offer a higher margin.

Stetson: Specialty retail is a very good market for color and graphic receipt printing. The roadblock we most often face is finding retailers whose systems are able to support it. The whole POS mechanism needs to support it. Getting a brand on receipts isn't just a function of the printer. The message needs to travel through the POS system before it is applied to the receipt that prints. Therefore, color receipt printers most often get implemented simultaneously with new POS systems.

3. What kind of bottom-line result statements can retailers make after deploying receipt and display marketing solutions?

Siegel: A fast-food company we work with has software that determines likely additional sales for customers based on what is ordered. For example, let's say a customer orders a combo meal. Before he pays, the display will offer an upgrade, like extra-large fries or a milkshake. The software determines the best add-on based on the order. This client has determined that the display feature has increased sales 3% to 5%. That resulted in a pretax profit change of 30%. You've done it when the customer is there already, you don't have to pay for advertising to get him in there again, and you're maximizing your profit on the added sale. He's likely to take the deal, and that's a high-margin add-on. It's the same concept as having gum and candy at the checkout stand. It's impulse.