POP and POS segment facing major growth challenges

Growing commoditization

POP point of purchase
Saurin Shah of Viraj Prints. Photo IPP

The demand for printed material used to support in-store brand promotion, more commonly known as point of purchase (POP) and point of sales (POS) solutions, in India, especially in bigger cities, is facing significant slow-down due to the growing popularity of online retail stores and shrinking floor space dedicated to such solutions in physical stores. Retail stores, both stand-alone and in malls, are the biggest consumers of POP and POS solutions.

“Due to growing acceptance of online shopping, a lot of brands have cut down their physical store promotional budget and hiked digital advertising budget. This has impacted the demand for POP and POS solutions in recent years. Another reason that has resulted in slow-down of demand is the fact that retail stores have been cutting down the floor space dedicated to various in-store promotional items in favour of stocking more products. This is due to the sharp rise in the number of consumer brands being produced in India,” says Saurin Shah of Mumbai-based Viraj Prints.

Viraj Prints has been a leading print house in Mumbai specializing in rigid board packaging and POP materials such as floor-standing units, display units and countertops. The company was incorporated in 1982 as a letterpress shop, and soon evolved into an offset printing house. Viraj Prints got involved in the Mumbai entertainment industry and began printing materials for music and film companies such as CD and DVD inlays.

A shrinking industry

According to Shah, in the last few years nothing major in terms of innovation and ideas has happened in the POP and POP segment, and there has been growing commoditization.
“Budgets have been cut; smaller printers have exited the industry while some have diversified into other verticals,” he says, adding that this trend is likely to continue. “Above the Line (ATL) marketing is the future while Below the Line (BTL) marketing is receding into the background. This development will have a significant impact on demand for POP and POS solutions,” Shah adds.

He says that major application of POS and POP solutions will be restricted to usage during initial brand launches and these solutions too will need to be very innovative. “These will be very limited and very niche,” he says.

Viraj Prints’ focus on development of ideas

Having spotted this trend in the POP and POS segment early, Viraj Prints has not been aggressively investing in its hardware department. Its last big investment was five years ago when it installed a Komori Lithrone LS 429 with coater and HUV technology. According to Shah, the company’s focus will be on the creative side of the business than on the production side. Viraj Prints has a division that deals with advertising and design.
“More effort will be put towards the creative side of our business as this is what creates intellectual property. Since we do not see any major growth in the POP and POS segment going forward, we will channelize our energies on content creation. Also, we will not be making any major investment in machinery for another couple of years,” Shah concludes.

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