Sign language

Once reserved for billboards and sports games, digital display systems are popping in retailers’ stores across Europe. Next Generation Retail’s panel of experts give some insight into retailers can improve their digital marketing in-store.

Digital signage is becoming increasingly popular with retailers. What are the greatest challenges facing retailers in terms of implementing their in store marketing solutions?

Kai Mildenberger. The biggest challenges in digital signage for retailers include the current lack of content portability, deployment issues, the inability to perform scale changes, high IT requirements and the lack of appropriate business models. Currently, we see that the market is built around a heterogeneous distribution of endless small and non-interoperable software solutions. The heterogeneity means that for retailers, content cannot be ported easily across platforms and cannot be easily updated, deployment is difficult and capital expense is high. There is hope that with new open technical standards promoted by industry organisations, communication across digital signage networks made by different vendors could be possible. Interoperability across systems and media players could increase competition in the supply chain, significantly lowering costs and making the ROI on building networks vastly more attractive for retailers. Additionally, future consolidation of the value chain throughout the industry could potentially send new solutions to the retailer.

Nico Colijn. First of all, retailers need to consider the question: where do I as a retailer add value to my customer? Then, retailers need to define what they value the highest and why they want to implement digital signage. A good plan with clear goals and expectations about ROI is the first step towards a successful implementation. When implementing digital signage, it is important to find out how to integrate it in the existing marketing mix. In order to make it easier for retailers, we have divided the use of digital signage at retailers in eight different zones. A good example is the lunch area of a local shop which is a very interesting area. Here, local staff can be influenced from a head office that physically might be far away. The screens can show follow up of sales performances and benchmarking with other shops with a similar profile.  Campaigns can be launched in the same way across borders, and basic training can be offered.

Once you have decided to implement in-store TV, I strongly recommend you to ask your supplier to make a site inspection before implementation. And remember to leave a nice part of your budget for making relevant, professional content.

Denise MacDonell. One of the main challenges for retailers utilising digital in-store marketing technology is to make sure it is deployed as a part of their overall marketing campaign and not just as a standalone venture. Thought must be put into defining and measuring the success of the solution and using that data to rectify targeting as needed. 

Lack of scale across digital out-of-home networks has also been a factor in slowing adoption rates for advertising purchases.  For an advertiser to seek out a network, it must be measurable and have enough scale to provide significant reach and reliability of delivery.

Understanding the core differences between static and dynamic signage is also key - and a core part of the success of such a deployment. Planning the content so it stays fresh and relevant or planning the location of digital signs are all part of the challenge. There is a significant difference between static content (the historic store signage we are all used to) and digital signage - which allows endless possibilities when it comes to taking advantage of video content to maximise the value of the signage.

Finally, understanding and implementing the technology correctly is also key to success. This allows the retailer to ensure they are selecting the right tools and making the most out of the capabilities of the infrastructure whilst investing wisely with future growth in mind.

How are digital signage solutions evolving to meet retailers' marketing demands in this tough economic climate?

NC. In this tough economic climate, it is important for marketers to spend money where it generates the highest return.  A shift to using advertising money at the place of purchase is here to stay.  The return is easily measurable, and it has been proved that price product spots close to the product have a positive effect.  A consumer survey by the Nielsen research firm reveals that four out of five product brands experienced significant increases of up to 33 percent in additional sales through the use of DOOH media.

On top of that, prices of digital signage installations have gone down (half the price in comparison to five years ago).  I have seen calculations where selling three professional hair care products more per week paid for the installation!  This means that all the other effects like informing your customer better, branding and creating a better shopping experience actually comes for free.

DM. The digital signage market is maturing and becoming more flexible with solutions such as financing, managed services and other alternatives to capital expenditures. The technology is becoming increasingly integrated with existing systems such as point-of-sale (POS) technology.

There is also a far greater understanding of all points of ROI within the business nowadays, and a growing focus on advertising and campaign management. Tools such as Harris Punctuate can help understand and maximise the return on investment gained from running a dynamic marketing campaign.

KM. Solutions are currently focusing on content portability, so as to bring down the cost of content, and on the ability to scale up and down as required by the retailer. Given the economic times, solutions also have to be cost-sensitive. New solutions that allow content portability will provide completely new scenarios and marketplaces that do not exist today, such as third party content application exchanges for up-to-date content. At VIDERO, we are addressing retailers' needs with a new product that allows content to be considered as an application with deployment over the internet - VIDERO C4, a carrier-class content computing network. Low monthly fees for this software-as-a-service are a timely alternative to major capital investment, hard to come by at the moment.

Are you experiencing greater interest in digital signage solutions from some sectors of the retail market rather than others? Which types of retailers are using DS solutions and why do you think that is the case?

DM. We have seen great demand for digital signage solutions from sub-segments such as quick-serve restaurants (QSR) in the US; in Europe from shopping centres, convenience stores, mass merchandisers and increasingly from specialist stores (sports retailers for example. An excellent example of this is our recent installation at Stadium, the largest sports retailer in Scandinavia. Over 60 million visitors a year visit Stadium sports retail stores and they are using Harris InfoCaster digital signage across their 110 stores to enable dynamic communication on the shop floor.

In conclusion, retailers who experience national footprint, high audience count and visit frequency are seen as the ideal candidates for digital signage; advertisers can maximise reach and frequency at the point of purchase, so direct sales impact can actually be tracked.

KM. We see strong demand from truly 'next generation retail', seeking to provide a much more immersive experience for the consumer that is constantly 'fresh'. The area where we are seeing the highest activity is that of the 'immersive retail experience' where digital signage is present at the retail level but virtually hidden from view. The desired experience has theme park like elements that is all content driven. The entire retail store is becoming a virtual canvas for digital content with heavy use of interactive stations or experiences. Digital signage software can drive a multitude of in-store systems, which are all aware of each other, almost like a digital mesh. For example, a particular event might be triggered in one section of the store, affecting store-wide colour temperature, ambient sound and projection-based signage content change. After several moments, conditions might smoothly return to standard. We are seeing this type of approach to the retail environment not in just a single project, but as a larger trend. A second new interest seems to be a global approach to retail, even in the early planning of content: new concepts for global deployment are engineered into the project directly from the starting block.

NC. Supermarkets and kiosks are very interested.  This is the consequence of the importance of impulse buying in this environment. We can see that we have difficulties in getting fashion chains as customers.  Their interest is limited, primary due to a lack of a clear and large first mover in Scandinavia. I am convinced though that there are several good reasons for them to apply in-store TV.  From a brand point of view, portrait screens can inspire with recommended combinations of people dressed from top to toe, where details make the difference. This will for example increase consistency between stores and augment the sales of accessories.

It is our experience that other retail sectors show interest in implementing digital signage, specifically fast moving consumer goods stores, since they have in common that impulse purchases are likely.  A way to measure is to look at our customer base. We have customers within the following retail areas: supermarkets, DIY stores, health and cosmetics, shoes, furniture, toys, electronics, telecom, furniture and other speciality stores.  First movers within a sector often give us the blue print for that sector. 

Today, there is a long list of killer applications within different sectors that generates the necessary ROI in order to implement digital signage.  I am of course available for the discussion about the reasons why you should implement in-store TV in your store.

What further developments to digital signage can we hope to see in the future? The industry will be moving towards content computing to finally fulfil the original promise of digital signage. 

KM. At VIDERO, we believe that content computing will revolutionise the way retail and other customers deploy cutting edge digital media technologies in at least three significant ways. First, new technology is no longer seen as a burden, as the customer does not need to build and maintain an expensive organisation of rare skill sets in order to own and operate a digital signage system. Secondly, the concept of scale is no longer terrifying, as content computing allows industrialised roll-outs instead of custom implementations and the customer can scale from one to thousands of stores without any additional engineering. Finally, large capital expenditure is no longer required, replaced instead with low monthly operational fees. The VIDERO C4 system provides the first example of content computing available on today's market.

DM. Apart from an increasing ability to measure the effect of digital signage content on the behaviour of viewers, I expect to see digital signage become an important component of marketing campaigns, with inventory being sold as part of multi-medium campaigns.

IPTV streaming will become more commonplace and take on an important role as a source of content for digital signage displays, smartphone interactivity will expand and extend the engagement factor.

Finally, as digital out-of-home networks mature, additional automation in the production, management and delivery of content will be essential.  As with other media platforms, automation tools for digital signage will enhance network ROI not only through the operational efficiency provided but will also by enriching the customer experience through improved quality, reliability and automated targeting of content.

NC. In the near future, we will see an increased amount of engagement of the customer: touch, barcode and RFID scanning, etc. 

Also linking the 3rd, the 4th and the 5th screen via Bluetooth, QR codes or SMS will become a standard. Measurement is expected to be an integrated part of all digital signage solutions.

Mermaid sells free media space on DOOH screens.  This can largely ameliorate the ROI for some sectors, facilitating decisions.

Biographies

Kai Mildenberger is COO of VIDERO AG, Germany and President of VIDERO LLC in the US. A serial entrepreneur, he founded the IDEA Group, implementing and extending ERP solutions across customers worldwide. He also served in key positions heading the Engineering and Technology efforts at GLOVIA International, Access360 (now a unit IBM Tivoli) and others. Most recently, Mr. Mildenberger served as founding CEO of SupplyFrame Media.

Nico Colijn is Marketing Director at Mermaid. He holds an MSc in Business Studies. He was born in Belgium, but has been living in Denmark since 1998.

He started his career in banking.  In the past decade he has worked with sales and marketing management within hardware and digital signage.

As director and general manager of the Digital Out-Of-Home (DOOH) business for Harris Broadcast Communications, Denise MacDonell oversees global strategy and business direction, product development, partnerships and client service/support. MacDonell directs the growing Harris DOOH enterprise in the development of tools to help businesses leverage compelling content to operate profitable digital out-of-home networks.