Best practices: Retail displays

Manufacturers and distributors are being asked to provide store-ready displays for their retail customers. Here are some tips to do it right—without bringing your operations to a halt.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 5/1/2008

Walk into any major retail or grocery store and you're likely to find promotional displays. They may be as uncomplicated as four flavors of soda on a pallet at the end of an aisle or as elaborate as an aisle-wide corrugated display of chips and dip for the Super Bowl.

Retailers and manufacturers alike love displays for a simple reason: They increase sales. “It's Marketing 101,” says David C. Kinney, president of WSP Inc. (479-636-9602, www.wsp-inc.com), a third-party provider of displays and store fixtures in Rogers, Ark. “If you can get a prominent display in a store environment, your sales will increase.”

While the concept is simple, there's nothing simple about getting those displays from the warehouse to the right store floor location in time for the promotion. That is especially true for manufacturers whose operations are designed to produce and ship their products in volume. “A major manufacturer is not set up to fill a 40-inch by 48-inch display with pretzels or minty-fresh toothpaste, especially when they might do just one promotion a quarter,” says Kinney. “That puts a real kink in their operations.”

1. Outsource it. What's the easiest way to get the job done? Turn it over to a third-party logistics provider (3PL) that specializes in displays. “One of the challenges of doing a promotion is orchestrating the delivery of the display materials, promotional materials and the product itself,” says Bryan Jensen, vice president of business development for St. Onge (717-840-8181, www.stonge.com). “That's a lot more complicated than shipping out a pallet of shampoo.” What's more, given that promotions are relatively infrequent for any individual manufacturer, there isn't enough volume to justify a manufacturer investing in machines, like stretch wrap or banding equipment, which might only be used a few times a year. “If you're a manufacturer, this is primarily a manual business,” says Jensen. “If you're a 3PL doing displays for a number of manufacturers, you have the kind of steady volume that can justify an investment in technology.”

2. The rainbow connection. Rainbow pallets, or pallets with more than one SKU, are increasingly popular with retailers. “Big box retailers, like Costco, Sam's Club and Wal-Mart Supercenters, want to move a group of products for a short period of time and sell it for less than anyone else can sell it,” says Robert Lyon, a senior solution consultant with HK Systems (800-457-9783, www.hksystems.com). The trick to building a rainbow pallet for an end-of-aisle display is to create columns, rather than layers, of product. That way, customers don't have to take the pallet apart to get the product they need. The solution, says Lyon, is a robotic palletizer. In low-volume operations, the robot picks cases from multiple pallets to build columns of product. In high-volume operations, multiple conveyor lanes deliver the product into the palletizing area where the robot picks cases from each lane. Either way, with enough volume, the robot can reduce the cost of manually building pallets.

3. Use voice. One way to streamline display operations is to approach it like a kitting operation. “We have a customer that fills pre-made kiosks with batteries for delivery to retail stores,” says Steve Hoffman, a technology specialist with Dematic (616-913-7700, www.dematic.us). “The batteries are slotted in a forward pick area, and the operator pushes the kiosk down an aisle on a cart.” Picking instructions are delivered through a voice recognition system that routes the associate in a prescribed order to pick the right assortment of battery sizes for the display.

4. Use software. It's not enough to deliver the displays to the stores on time. Someone has to move them from the stockroom to the location on the selling floor designated for that promotion. “Retail circulars hit the newspapers on Wednesday,” says Noel Goggin, vice president of execution management for RedPrairie (877-733-7724, www.redprairie.com). “If a customer goes into the store, circular in hand on the weekend, they expect to see those products on the end caps. If it's not there, it causes all kinds of consternation. Software solutions can take space-planning applications, including end cap locations, and feed that information into a store execution system, and then deliver the right tasks to the associates who can make sure the displays are ready for the promotions. Similar information can be delivered to store managers, who can then make sure the displays have been positioned according to the instructions.

5. Track it with RFID. Sometimes, statistics tell a story. Research has shown that having products on display at the start of a promotions lead to a 19% sales lift; research has also shown that nearly 50% of stores don't do that on time. “Manufacturers are spending a lot of money to get displays shipped to the store that never move from the back room,” says Paul Cataldo, vice president of marketing for OATSystems (781-907-6100, www.oatsystems.com). The solution: Add an RFID tag to the display if you're shipping displays into a retailer with RFID-enabled stores. 
   
   “With a tagged display, we can notify a manufacturer when their display arrives at the store, when it leaves the back room and when it hits the sales floor,” says Cataldo. “That gives a manufacturer the visibility to focus on those stores that aren't in compliance.” The reward for the investment is a measurable increase in sales. “Kimberly Clark has been able to increase its promotional compliance from 50% to 75% using this solution,” says Cataldo.

   Shipping platform saves space for WSP Any third-party logistics provider (3PL) shipping displays into a big box retailer has two big challenges: How to find enough room in the DC to handle the volume of product and how to store the shipping materials needed to get the job done—especially when shipping to a large retailer. “If you're making displays for a small retailer, you don't need a lot of space because they don't have many stores,” says David C. Kinney, president of WSP Inc. (479-636-9602, www.wsp-inc.com). “If you're doing them for a big box retailer with several thousand stores, that can take up a tremendous amount of space.” WSP solved both problems last July by replacing wooden pallets with a new shipping platform made from recyclable plastics (OptiLogistics, 405-751-2898, www.optiledge.com) for displays going to Wal-Mart. The displays were created for Outdoor Cap, a manufacturer of headgear for sporting and hunting activities. “For this roll-out, we had to build several thousand displays which normally would ship on pallets,” Kinney says. That kind of volume called for four to five truckloads of pallets. To keep them dry, the pallets needed to be stored inside WSP's 200,000 square foot warehouse; otherwise, moisture from the pallets could damage the corrugated displays. A retailer like Wal-Mart had to dispose of the pallets after the promotion was over—that had an environmental impact. In place of the pallet, WSP used an L-shaped loading ledge to streamline the unloading of its container shipments. The lightweight ledges, which resemble a corner board with feet to accommodate forks or pallet jacks, fit around the perimeter of the load. To unitize the shipments, WSP inserted the ledges through die cut holes in a corrugated cap and then banded the displays to the cap. Since the ledges nest, they took up very little storage space in the warehouse. “We needed to store about three pallets worth of ledges for the whole job versus several truck loads of pallets,” says Kinney. “Meanwhile, instead of disposing of wooden pallets, Wal-Mart had just two lightweight strips of plastic that can be recycled.”