Digital Signage Creates In-Store Buzz and Rings

Discussion
Dec 03, 2008

By George Anderson

A recent piece on the Investor’s
Business Daily
(IBD) website pointed out that Walmart’s new Smart
digital signage Network enables the retailer to tailor messages at the
shelf to provide consumers with content that both informs and drives
purchases.

The ability to alter
messages based on store location, time of day/year, and other factors that
influence purchases is a critical upgrade for Walmart over traditional
signage and even its previous in-store network.

"It’s
the customization that makes this key," Linda Blakley, a spokesperson
for Walmart, told IBD.

Eventually,
Walmart’s network will allow consumers to engage the network in two-way
communication.
"Shoppers will be able to react to the information and the network will
be able to adjust the messaging to ensure it is as effective as possible,"
Ms. Blakley said.

Retailers
are jumping on the digital signage bandwagon, seeing that it can generate
revenues in a variety of ways from ad sales to the lift associated with
promotional announcements. Proponents see other benefits, as well.

Mike Abbott, president of ADFLOW Networks, told RetailWire,
"It helps
you achieve a greater level of compliance in stores because all the displays
are managed on a network basis. You’ve also got great analytics. Retailers
get analytics showing where the customer is spending time on a touchscreen,
for example. So, they can identify where customers may be confused; where
the content is particularly effective. They can compare the keystrokes or
the touches on these screens with the point-of-sale data to see what screens
and what types of promotions were delivering lift."

The
current economy has many retailers using in-store networks to promote store
brand programs.

"If I go to (top
10 grocery chain) and pitch that they should invest in media for promoting
a national brand soft drink, they’re going to tell me I can go pound sand.
They’d say the brand can pay for it," Chris Riegel, chief
executive officer of STRATACACHE, told RetailWire. "If I go to them and say they
should focus their message on their store brand soda and tell them that
we can increase their sales by $200 a day; knowing what their margin is,
they’d see that they’d be able to pay for investment in just a few days."

Discussion Questions:
What do you see as the major benefits of in-store digital signage networks?
Do you expect retailers and suppliers to remain financially committed
to the technology in 2009 in light of the industry emphasis on shopper
marketing?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

13 Comments on "Digital Signage Creates In-Store Buzz and Rings"


Sort by:   newest | oldest | most voted
David Biernbaum
Guest
13 years 5 months ago

Digital signs that help drive greater sales also will help to stimulate the economy and in my opinion, if executed in good taste, the signs help make the consumer shopping experience more complete. POS impact is still the greatest of all and digital signs help to alleviate the concerns that many retailers have for clean stores and less clutter.

Lisa Bradner
Guest
Lisa Bradner
13 years 5 months ago
I love the prospect of digital signage for all the reasons highlighted here: it brings messaging to the shelf, it can change to meet the needs and interests of the shopper and it can potentially bring interactivity and responsiveness (and information) to the shelf. My concern for the industry is that a lot of the hardware has been subsidized by vendors looking to get a toehold. Not too many retailers have borne the costs of the system nor do they expect to in the future. To Chris’s point, there’s some conflict between private label vs. branded sales and who’s footing the bills for the system, the media and the analytics to push one vs. the other. To really grow substantially and quickly, digital signage needs to prove out its ROI. The Walmart initiative is compelling in part because of the inclusion of DSIQ’s analytics–the ability to understand by message, daypart and by region what is and isn’t working–is critical to the medium’s success. Unfortunately, a lot of networks out there today aren’t that smart. Retailers… Read more »
Marc Gordon
Guest
Marc Gordon
13 years 5 months ago

The key words here are “enable” and “accomplish.” The fact is that regardless of a media’s ability to tailor its message to the consumer, if that message does not lead to action, then it is a waste of time and money.

As for the interactive media screens, I would have to wonder how many consumers are willing to spend time pushing buttons in order to be fed more advertising messages.

These days, I am convinced that the strongest and most effective message that consumers want to see is the word SALE.

Dr. Stephen Needel
Guest
13 years 5 months ago

Interestingly, this article and the original Investor’s article say nothing about payout. The concept is a good one, but does it drive sales? Does it pay for itself? No data provided in either article. Traditionally, in-store media such as this has not been a sales driver (doesn’t mean this one doesn’t work).

James Tenser
Guest
13 years 5 months ago
In the first place, shopper media–digital and not–are one class of tools for shopper marketing. Almost any in-store message, measured in isolation in a controlled test, can deliver a sales lift. In this mode, the message does its magic by “activating” shoppers’ pre-existing propensity to select an item or a brand. Or to put it in crude terms–it helps them to notice the product, then buy it. Not rocket science. Retailers today can use very simple and low-cost digital display systems to promote their higher-margin store brands this way. They can measure the success of this activity at the POS and prove ROI. It’s a very valid and easily attainable use for digital shopper media. Walmart’s network provides a channel for brands. With 140 million shoppers per week, it claims network-sized audience numbers. No doubt it sells some incremental product, but it is profitable up front because what it really sells is audience access to advertisers. It’s got impressions by the megaton, which may seem attractive and familiar to advertisers, but not so much to… Read more »
George Anderson
Guest
13 years 5 months ago

Editor clarification: Chris Riegel at STRATACACHE wasn’t suggesting that retailers sell ads directly to brands. What he was suggesting was that for a brand to get time on a major retailer’s network would mean the brand (in most instances I can think of) would have to pony up dollars to a third-party provider get those spots up in stores. The rationale behind supporting a store brand is obviously different.

Bernice Hurst
Guest
13 years 5 months ago
Sorry, folks, but I’ve always thought this kind of technology was a poor idea. Nothing here changes my mind. If anything, it screams out “desperatation” in making any and every effort to get people to buy more. My reasons? Many shoppers, as we well know, just want to get in and out as quickly as they can. They do not want to be distracted by screens babbling at them and trying to encourage them to spend their money on things that they either know they want (so don’t need the ad) or know they don’t want (so the ad will have no effect). People who are trying to get on with their shopping may not be too thrilled to have to fight their way through bottlenecks of people who do want to see the ads and may be blocking the aisles. After all, one objective is apparently to see where people are spending time i.e. encouraging them to spend time. Finally, the idea of positioning the screens where people can get ideas for dinner seems… Read more »
Cathy Hotka
Guest
13 years 5 months ago

I’ve spoken with numerous CIOs who want digital signage, but who don’t want to bear the cost. They believe that digital signage will provide the kind of ancillary benefits that broadband brought to the store. There is significant pent-up demand…I’d assume that a mutually-beneficial business model will appear between retailers and visionary suppliers.

George Anderson
Guest
George Anderson
13 years 5 months ago

There’s got to be a reason beyond ad revenues for Wal-Mart to be putting so much emphasis on its network. Marketers such as P&G are not just doing it for brand image or even to placate their biggest customer. The sales generating opportunity is there and there’s real-world evidence to demonstrate it works.

Bill Gerba
Guest
Bill Gerba
13 years 5 months ago

Digital signs generate positive returns when implemented correctly and managed competently. Walmart knows this, which is why they’re re-investing in their network. They’re not using DS-IQ to find out if it lifts sales, they’re using them to *optimize* the performance of the network. If they didn’t know it already worked, they wouldn’t be plowing in the $90 or $100M that some estimates have pegged the project at.

One other comment: I think the StrataCache guy mentioned in the article is crazy–retailers cannot, will not, and most importantly, SHOULD NOT be the ones out there trying to sell the ads. It brings back the heady discussion of “retailers as the next networks” that we all heard a few years ago. A retail store’s job is to sell product. Being a network is orthogonal to that task.

Gene Detroyer
Guest
13 years 5 months ago
The digital signage topic is hot. But my observation is it’s being over-thought. This really is simple stuff. I will again use my often-used analogy. If a kid walks up and down the aisle in a supermarket yelling “Heinz Ketchup,” the store will sell more Heinz Ketchup and more ketchup overall. In the late 80s I was president of Site Based Media which became NBC OnSite. We had monitors in about 200 stores showing simple ads with and without feature pricing. We measure movement, pre-, during and post. We matched stores within and outside of the system. I don’t remember how many items we measured, fifty or more. All but two had significantly higher movement when they appeared on the system. While today’s systems are better and less capital intensive, no one should expect a retailer or brand to pay for the installation and operation of the system. The successful operator will pay for the installation, charge for the advertising and pay a “rent” to the retailer.
Matthew Spahn
Guest
Matthew Spahn
13 years 5 months ago

The most successful marketers today are the ones who have established a two-way dialog with customers. Some are making good progress at that outside the store but few do it well within the store.

Digital signage networks are a commitment and investment that will only improve with time. Marketers will continue to get smarter about bringing the right offers to consumers with analytics that companies like DS-IQ provide. More importantly, consumers will grow accustomed to interacting with the in-store signage just as they have grown more comfortable with other new media like PDAs, etc.

A short-term economic downturn shouldn’t affect long-term strategies that will ultimately improve ROI.

Anne Howe
Guest
13 years 5 months ago

Success will be dependent upon full disclosure of the real shopper learning. National brands will be reluctant to pay for growth in private label brands, so the balance issue here is very critical.

wpDiscuz

Take Our Instant Poll

How do you think spending on digital signage networks in 2009 will compare to the dollars invested in 2008?

View Results

Loading ... Loading ...