By Published on .

Private-label products, a thorn in the sides of many package goods marketers, could be a growth opportunity for the $15.7 billion point-of-purchase industry.

POP executives say the competition is likely to make their medium more attractive to both brand names and upstart private labels. The battle could help the momentum in the POP industry, which from 1990 to 1992 grew 6.1% to $15.7 billion, the latest available figures.

"As brands have to fight harder, promotions rise and marketers will use more innovation to appeal to customers," says Richard Nathan, president of RTC Industries, a supplier of POP materials. That in turn should be good for the POP industry, he says.

"Not only are private labels going to cut into the shelf space but the promotional space in the store as well," says Marc Rubner, manager-research and information systems for the Point-of-Purchase Advertising Institute.

"Right now, packaging is a key element in premium private labels. And what comes after packaging is display promotion," Mr. Rubner says. "As this progresses, we will see a demand for high-quality POP to accompany the packaging because people don't want to buy something that looks cheap."

Mr. Rubner heads a study conducted jointly by POPAI and Progressive Grocer covering attitudes of supermarket retailers. The survey found that as private labels grow, the POP industry needs to develop a better relationship with retailers.

According to the survey, retailers became more critical of the performance of POP providers in 1993, compared with '90.

Retailers say they want POP suppliers to provide more and better follow-up, more timely deliveries, better communication with store personnel and to better understand the retail business.

The survey also found fewer managers use permanent displays but a greater percentage plan to increase their use of promotional POP. "Private labels give POP another client to teach about the industry and build a relationship with," he says.

Most Popular
In this article: