# Point of Purchase (POP): Definition, How It Works, and Example

![Person tapping their credit card against a card reader while sitting at a restaurant table](https://www.investopedia.com/thmb/sgtrj38SvOQnOp_n0mw4MKhx17Y=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-1486127040-2d871407d82744269fa20ef56224f5ef.jpg)

*— Getty Images / Olga Rolenko*

## What Is a Point of Purchase (POP)?

A point of purchase (POP) is the time and/or place that a retail transaction is made by a customer. Marketers and retailers use this term to describe a key touchpoint in the retail journey where they might aim to persuade the customer to complete their transaction or purchase additional products. Often, the POP is considered when planning the placement of consumer products, such as product displays strategically placed near the checkout of a grocery store aisle.

This term is similar to the [point of sale (POS)](https://www.investopedia.com/terms/p/point-of-sale.asp), which is the point at which a customer purchases and pays for products, such as on a website or at a store checkout. The POP is the area that surrounds the POS, in which customers often encounter promotional activities or other tempting "add-on" products.

### Key Takeaways

*   The point of purchase (POP) describes the time and/or place at which a customer makes a retail transaction.
*   Marketers and retailers consider the POP as a strategic touchpoint in the retail journey where customers might be persuaded to complete or add to their purchases.
*   POPs may be physical, as in the case of a brick-and-mortar store, or virtual, as in the case of an electronic retailer that sells goods and services online.
*   To aid brand owners in promoting their products and standing out from the competition, POP display manufacturers focus on aesthetic and innovative designs and technologies that suit their retailers' environments and goals.
*   The global POP displays market is expected to expand at a compound annual growth rate (CAGR) of 8.4% from 2023 to 2031.

## Understanding Point of Purchase

The point of purchase is the time and/or place in a customer's buying journey where all elements of the sale come together: the customer, the money, and the product. A point of purchase might be physical, such as a checkout counter in the case of a [brick-and-mortar](https://www.investopedia.com/terms/b/brickandmortar.asp) store, or virtual, as in the "basket" or "cart" of an [e-commerce](https://www.investopedia.com/terms/e/ecommerce.asp) store. 

In both cases, the point of purchase has been an area of focus for retail marketers in recent years, with different promotional strategies, such as cross-selling, discount codes, and impulse purchases being used to entice customers to complete or add to their orders.

> **POS vs POP**
>
> The term point of purchase (POP) describes a time and/or a place in which a retail transaction is made, whereas the term point of sale (POS) describes the point at which a payment is made.

## POP Marketing

Retailers, both online and brick-and-mortar, use various marketing and customer service strategies to influence their customers' buying decisions. These might include things like product display stands, printed brochures or displays, discounts or promotional coupons, advertising, or salespeople. A common example is selling gum, candy, and magazines near the checkout of a grocery store, but with the development of more personalized e-commerce experiences, strategies have become more sophisticated and targeted. For example, an online shopper might encounter a personalized offer designed to upsell them on additional products before they complete their order.

According to the 2024 POP Display Market Outlook, the global point-of-purchase displays market is expected to expand at a [compound annual growth rate (CAGR)](https://www.investopedia.com/terms/c/cagr.asp) of 8.4% from 2023 to 2031 and be valued at $19.5 billion by the end of 2031.

## POS Systems

The point of purchase includes the point of sale (POS) and its affiliated hardware and software systems. POS systems are usually tailored to the way a particular industry or business handles payment transactions; for example, restaurant POS systems are designed to account for food orders, whereas retail POS systems are designed to handle store inventories.

Although some small retailers use off-the-shelf cash registers to calculate payment amounts and issue receipts, most POS systems are computer-based, digital, and incorporate other devices or peripherals such as printers, barcode scanners, scales, and touch screens. In some cases, customers perform the duties that were previously performed only by checkout clerks, such as scanning barcodes, weighing items that are sold by weight, operating POS terminals by tapping their fingers against touch screens, and making payments by swiping their [credit cards](https://www.investopedia.com/terms/c/creditcard.asp) or inserting cash into machines.

Also, retailers use POS software for accounting, [warehousing](https://www.investopedia.com/terms/w/warehousing.asp), and management functions such as tracking inventory and revenue. The software may be used to manage [inventory](https://www.investopedia.com/terms/i/inventory.asp), alerting warehouses when shelves run low, or create purchase orders and automatically send them to suppliers. POS software may assist management in deterring theft and employee [fraud](https://www.investopedia.com/terms/f/fraud.asp). It may be integrated with a business’s accounting system to enter the day’s sales directly into the company’s books.

## POP Innovation

To stay competitive and aid brand owners in promoting their products, POP display manufacturers are focused on improving aesthetics, as well as creating innovative product designs. The intensifying competition in the retail industry, and the resulting use of POP displays to drive purchases, have encouraged retailers to demand different custom-made displays capable of serving specific needs across different retail facilities. Customization offered in terms of aesthetics, capacity, and mobility can [greatly impact a company’s brand identification](https://www.investopedia.com/terms/a/atmospherics.asp).

AI-powered POP displays are also enabling more customized promotions, messaging, and customer journeys by taking advantage of facial recognition and machine learning technologies. Meanwhile, digital displays allow for a more interactive and engaging experience with the inclusion of media such as video, animated, and augmented reality.

When it comes to the POS aspect of the point-of-purchase experience, modern POS systems are commonly programmable or customizable with third-party software programs. These systems can be tailored, often with AI, to collect data and meet specific retailer needs. For example, many retailers use POS systems to manage membership programs that offer retailers insight into customers' purchasing habits, while awarding points to frequent buyers and issuing discounts on future purchases to entice future purchases.

Touchscreen innovations and cloud-based software mean that customers can also interact directly with POS systems, particularly in the hospitality industry. Often referred to as location-based technology, these systems can process transactions at customer locations. For example, at many restaurants, customers can view menus and place orders on terminals located at their tables. In hotels, customers use similar terminals to place orders for room service or to pay hotel bills.  

## What Types of Point of Purchase (POPs) Are There?

POPs may be physical checkout counters or terminals, as in the case of a brick-and-mortar store, or virtual checkout stages, as in the case of online retailers. 

## How Does Point of Purchase Work in Conjunction With Point of Sale (POS)?

The point of purchase (POP) includes POS systems and experiences. POS systems frequently use hardware or software tailored to a particular industry or business.

## What Does the Future Hold for POP?

Competition in the retail industry is driving brands to deliver an ever more seamless and optimized customer purchase experience. Retailers are looking to AI and digital media innovations and continuing to develop marketing strategies that drive more purchases as well as the value of those purchases.

## The Bottom Line

The point of purchase is an important aspect of the customer journey that brands should incorporate into their overall marketing and customer service strategy. It includes but is not limited to the point of sale and its associated hardware and software.

Point-of-sale marketing can take many different forms, but advancements in AI and digital media are offering retailers improvements and new possibilities for influencing customer purchasing decisions in brick-and-mortar businesses and e-commerce stores alike.  

> **Article Sources**
>
> 1.  Transparency Market Research. "[POP Display Market](https://www.transparencymarketresearch.com/pop-display-market.html)."