Over the next three years, POP signage prices are projected to rise further in response to continued increases in consumer spending, total advertising expenditure and the number of businesses.
Los Angeles, CA (PRWEB) December 29, 2014
Point-of-purchase signage has a buyer power score of 3.5 out of 5. Although buyers benefit from low market concentration and low price volatility, the low availability of substitutes cuts into buyer negotiating power. “This level of buyer power indicates buyers have slightly higher leverage than suppliers during negotiations,” says IBISWorld procurement analyst Kayley Freshman-Caffrey.
A shortage in viable product alternatives is the main factor that damages buyer power. Although other types of advertising can be used to promote sales and other events, they do not have the same access to buyers held by point-of-purchase signage. Because POP signage is located in the immediate vicinity of the specific store, it is more effective at increasing foot traffic than other types of advertising. “Different types of advertising offers comparable advantages and disadvantages, so they are often used together rather than in place of each other,” adds Freshman-Caffrey. “Additionally, stores can hire promotional staff to reach out to buyers to increase foot traffic, but this option entails high wage costs and can irritate consumers due to its intrusiveness.” Ultimately, buyers looking for POP signage do not have many reasonable substitutes to consider. This low availability of substitutes hurts buyers' ability to leverage product alternatives to negotiate lower prices.
Low market concentration partially alleviates this problem because it fosters competition among suppliers by making it difficult for individual suppliers to gain dominance and provides buyers with an array of suppliers from which to choose. Furthermore, low market concentration limits the extent to which suppliers can raise their prices each year out of fear that they will lose business to competing firms. Low market concentration, thus, supports low price volatility for POP signage, which empowers buyers to purchase their signs when needed rather than worrying average prices will spike or dip after their order is placed. The positive effects of low price volatility and low market concentration balance the negative impacts of the low availability of substitutes to give buyers a slight advantage when negotiating. For more information, visit IBISWorld’s Point-of-Purchase Signage procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of point-of-purchase (POP) signs. POP signs are displayed in retail locations to increase foot traffic and purchases. POP signs refer to a wide array of products, including floor decals, banners, fixtures and mobiles, among others. These products are used to designate a sale, store opening or promotion and can come in both electronic and nonelectronic forms. This report does not include way-finding signs, traffic signs or safety signs.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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