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At the Point of Sale

At the Point of Sale

You know how it is . . . you're standing in line at the supermarket checkout. By the time you get served you've added another five items to the trolley. Such is the power of a good point-of-sale displayWhile the customer is in the store, there's always the chance of a sale . . . even when they think they've finished selecting what they need.

While a printer, for example, might be the "cake", there's still the icing on the cake to be considered. In the case of supermarkets, the icing is chewing gum, bags of lollies and the latest edition of Reader's Digest: the impulse buys. It's those products that the consumer picks up at the point of sale as they wait patiently in line for their goods to be scanned and paid for.

Increasingly, IT resellers are learning valuable selling and marketing techniques from their counterparts in other industries. The display of products at the point of sale is just one of those concepts which is starting to be picked up on and popularised.

Trend related

Point-of-sale products in an IT reseller's store need not be overly inexpensive, but can definitely cost more than a packet of PK gum. From a customer's perspective, another 50 dollars on the Visa card doesn't mean all that much when they've just put themselves in hock for a $1,000+ printer.

The majority of resellers nowadays have already been in business for a number of years and are all too aware of what products are moving well. Put that knowledge to a greater use than simply determining which products to bring in for stock. If you're going to establish a point-of-sale display of sorts, then it makes sense to have it relate to the fast-moving products.

A good historical example is the release of Windows 95. It certainly wasn't just the product that was selling by the barrowload. Sound cards, mice, speakers, CD-ROM drives, all suddenly enjoyed a revived status of high turnover products.

Even though some of those products aren't ideally suited to point of sale, the less pricey items certainly are. Books in particular are popular items. Software companies such as Microsoft have for some time now been adopting a policy of on-line documentation rather than printed manuals. From a reseller's perspective this policy represents the chance to make money. After all, nothing beats a book which the user can have open beside their keyboard. As a point-of-sale item, particularly when the title relates to popular products, books equate to profit.

For the past several years, IDG Communi-cations' Maggie Saunders has been in charge of distributing the highly successful IDG range of " . . . for Dummies" books. According to Saunders, books have become increasingly popular with resellers as products which represent consistent turnover. "The main ones we're getting demand for currently are those dealing with Windows 95, Microsoft Word and Powerpoint," she said.

When ARN asked Saunders whether the increase in demand for books coincided with the decrease in packaged documentation, she said, "It's fairly difficult to gauge that, but there has certainly been a steady and significant increase in demand for books at all levels, from end-users and resellers alike."

Saunders believes that as a point-of-sale product, books are an ideal item. "Over the years, I've seen books take on a large role in resellers' product lines," she said. "Customers perceive them as being excellent value for money.

"Another benefit of books from the reseller point of view is that they need little explanation to the customer, unlike the majority of other products they're selling. They really do sell themselves."

Even magazines have become popular in some stores as point-of-sale products. Just as Woolworths strategically positions publications such as Family Circle and New Idea by its checkouts, a number of resellers are doing the same with IT magazines such as PC World.

During a recent visit to one of the Games Wizards stores, I saw first-hand the success that company was experiencing by having magazines near the point of sale. In this particular case, they had one of the best ranges of games-related magazines I've seen anywhere. And they were selling well!

Sure, magazines have long been within the purview of newsagents, but you're also in competition with them, not just the IT reseller in the next suburb. Don't doubt this. Think back on how many newsagents you've seen over the last couple of years displaying racks of shareware.

Many newsagencies have also been providing their customers with consumables such as printer paper and ribbons for more years than you've been in business. Take business from them if you can. Don't let them make a profit which could just as easily be yours.

Get 'em back

While the most obvious goal of any reseller with a customer in the store is to relieve them of a portion of their money, there is also the need to ensure that the customer will return to spend another day.

Without doubt, the most important and crucial element of a computer reseller's point-of-sale display is the mouse that roars . . . the business card. It's that small piece of cardboard which -although it often gets lost - helps ensure the customer returns to your store.

Even though it brings with it no immediate cash return, it's an inexpensive product which has proven its worth time and time again.

Even less expensive than the business card are product brochures. Sure, the customer doesn't have to pay for them at the counter, but then, again, they haven't cost you anything either.

To take full advantage of brochures, either stamp them with your company details, or staple your business card to them. Always ensure the customer thinks of you whenever they look at the brochure. Both the brochure and business card have the power to form the anchor of your point-of-sale display.

Along the same line, yet somewhat more expensive, are mouse mats. Most resellers already stock a variety of mouse mats and for good reason: they're a relatively high turnover product and tend to take little shelf space. If you're really keen on ensuring your company name is constantly on your customers' minds, you might also consider having mouse mats screen-printed with your own company details.

Profit per square inch

In most cases, a point-of-sale display is likely to have little room devoted to it. Because of this, more profit per square inch should be one of your main aims. A stand or rack of CD-ROMs may be just the answer.

Kylie Loughland, sales and marketing co-ordinator with CD-ROM publisher, Softkey, told ARN that resellers are gradually taking advantage of low-cost CD-ROMs for use at the point of sale. "While resellers are certainly coming to grips with the use of inexpensive CD-ROM titles in point-of-sale displays, many are still to realise the full potential," she said.

"Already we have our racks in nearly every Harvey Norman computer superstore in Australia. Now, other resellers are seeing the CD-ROM rack as an ideal point-of-sale stand which takes up minimal floor space."

According to Loughland, it's the end-users themselves who are providing much of the driving force behind the success of low cost CD-ROMs. "At just under 20 dollars, users see these products as great value."

Buying 'try before you buy'

One of the stalwart point-of-sale products still remains shareware. It's inexpensive, quite often attractively packaged, and is available in an amazing variety of "flavours". Possibly Australia's most successful shareware publisher and distributor is Brisbane-based Manaccom.

The company's managing director and founder, Ian MacKay, told ARN that while many of the "good" resellers have picked up on shareware as point-of-sale product, a number are continuing to overlook its sales potential.

MacKay explained that the big seller in shareware is entertainment software. "Shareware for non-entertainment purposes has pretty well had its day," he said. "Now, when most people purchase a PC, the vendor or reseller will already have bundled a suite of applications, so there's no great demand for the shareware alternatives."

According to MacKay, the older style plastic "clams" hanging on a carousel have also lost their appeal. "It's now a case of the small box measuring about eight by five by one inches gaining popularity. The perception of value is there, and it's a perception which is supported by the product itself.

"Duke Nukem 3D, for example, which was released in early March, has already sold over 9,000 copies in shareware form. With a retail price of $14.95, the reseller is getting a 100 per cent profit on the $6.97 buy price. So, even though it's a relatively small dollar purchase, they're still doing well out of it."

To a certain degree, shareware has similar properties to the business card and brochure; it has the potential to bring customers back. MacKay quoted a figure of approximately 95 per cent of registered (full-featured) shareware products as being sold through the channel. "The shareware version is very much a drawcard for the customer to return to the reseller to purchase the full version," he said. "So there's a double sale in it for the reseller."

In search of ideas

What we've been looking at here are really only a few of the possibilities for establishing the point-of-sale "icing". Even though you may already have all of these items on display in your store, you need to ask yourself whether they're in a truly advantageous position.

Having them positioned at the back of the store, or inconspicuously placed in a far corner, is doing little more than enforcing the impression that the products are of little importance. By placing the bins, stands or racks in prominent locations, you'll considerably increase the chance of a higher turnover.

Considering that many of these products are in high demand and have retail prices upwards of 100 per cent on your buy price, they really do deserve a great deal of consideration.

Let's face the truth! In the IT reseller industry it's an accepted fact that a sizeable number of businesses trading today will be closing their doors within the next 12 months. Make sure it's your business which survives. Examine what your competition is doing. Make the effort to visit one of the larger superstores such as Harvey Norman and consider applying some of their practices to your own business.

In preparing this article, I spent several hours lurking in the aisles of the Auburn Harvey Norman superstore, observing the popularity of the bins containing outdated product. It was an eye-opening experience to see many customers make their entire purchases based on products from these areas. As the saying goes: "Money for jam".

If you're still running short of ideas, take a trip to just about any supermarket or large department store such as K-Mart. Have a close look at their point-of-sale stands and apply some of those same principles to your own business. These are the companies that know the true value of point-of-sale. Do you?

IDG Communications

Tel: 02) 439 5133 Fax: (02) 439 5512

Manaccom

Tel: (07) 3870 4900 Fax: (07) 3870 9440

Softkey

Tel: (02) 9979 8518 Fax: (02) 9979 8718


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