The effect of digital signage on the retail environment has grown from a bright shiny object to a vital customer engagement mechanism, and retailers are getting better at it every day.

By Paul Flanigan

While working in retail, I was constantly asking (or being asked), “Will this __________ (insert retail initiative here) make the customer experience better?” Even though my core function was to deliver a digital signage experience, I was on several teams that carried different responsibilities: marketing, branding, merchandising, and store design. You can imagine the joy of four meetings a week where the same stuff was discussed but nothing was accomplished. As an agent of customer engagement, I was challenged with taking those four competencies and combining them on a digital signage network that carried on its shoulders the weight of visual appeal for the entire chain. Toes were stepped on, rules were broken, and forgiveness was requested because permission was ignored, all in the name of making the store a better place for the shopper.

Around 2001 (in digital terms, eons ago), the early stages of retail digital signage was more about the bright shiny object than of customer engagement. As digital signage evolved into different departments and disciplines, it was clear it had impact on the customer and the retailer. I spent countless hours in front of PowerPoint presentations that claimed digital signage could “deliver the brand promise,” and “create an intersection of all touchpoints across all channels designed as One Branded Experience,” and that we could “be the trusted perspective that inspired people.” I’m not making this up. Those are real quotes.

There is only one objective for retailers: Sell stuff. Lots of it. Lots and lots of it. And make money. Lots of it. Lots and lots of it. Retailers don’t do anything because it’s just cool. There is a business case behind every initiative. Retailers will freely spend enormous amounts of money on initiatives in an effort to get customers past the competitors and into their stores. Lighting, signage, carpeting, aroma, employees, all of it is designed to make the customer like where she is, so that she’ll spend more time and money there.  All the big ideas and clever signage and cool in-store marketing gimmicks swirl like a tornado around the fiscal bottom line. Digital signage is no different. It must justify its purpose.

So, at the end of the day, if I asked (or was asked) if I made a better experience, my answer was the question, “Well, did we sell more stuff?”

Digital signage has become a crucial channel of marketing inside the retail environment, and it’s often the bellwether for other types of venues considering digital signage because it’s one of the best laboratories for human traffic, digital screens, and interactivity. Almost every other kind of network keeps its eye on the retail sector to see what works and why. Touch screens? Big screens? Mobile? If it works at the local Stop-N-Shop, can we make it work in our environment?

The statistics on the performance of digital signage continue to be positive. Everyone wants to know what their ROI (Return on Investment) will be with a digital sign. I have seen positive results ranging from 2% to 149%. However, the dynamic nature of digital signage is comprised of myriad factors that can contribute or detract from that number, including the campaign, time of day, day of week, the month or season, promoted item, location of item in the venue, the location of the screen in relation to the location of the item, the age of message, customer demographics, customer navigation habits, customer mindsets, shopper marketing research and insights, and. . .you get the idea.

We know it works, but as our culture moves into an age of instant communication and interactivity, how has digital signage changed the way retailers market their products and engage their customers?

The bottom line is that digital signage has given retail marketers a new dimension of customer engagement with the venue, the brand, and the product or service; this dimension was simply not there in any other form beforehand. The dynamic nature of digital signage has enabled retailers to build relationships with customers. Customers still go to stores to buy stuff. But how they buy stuff has changed dramatically due to the impact of screens and video.

Just like window displays, end-caps, mannequins, and fitting rooms, digital signage is part of the evolution of retail marketing and communication. Here are some ways that digital signage has changed how retailers engage customers.

Digital signage keeps people in the store longer. This is especially true with interactive signage, such as touch screens and virtual reality. Proven time and again, the longer a customer spends in a store, the more likely he is to buy something there. Marketers can create immersive interactive experiences where customers can learn about and interact with products in ways not found anywhere else, including online.

The dynamic nature of today’s digital signage enables retailers to to engage customers on an individual level, not as demographic segments. The days of the “stay-at-home mom” demographic as a market segment are giving way to the “34-year-old-mom-with-three-kids-who-spends-three-minutes-in-the-produce-section-of-the-grocery-store-every-Monday-between-2:30-and-3:16 p.m.” demographic. Taking a page out of Marketing 101, relationships succeed when they are one-on-one.

Digital Signage helps customers with their purchase decisions. The old statistic flying around is that anywhere from 50% to 70% of purchase decisions are made in the store. But, those decisions are based on several factors, including in-store marketing and messaging. Digital signage has been able to combine these efforts into a tailored approach that refines the purpose of shopping. In one test, I put together a touchscreen interactive that allowed customers to choose different HDTV models on the display wall and determine what should play on them. So if you were a fan of baseball, you could watch baseball. If you liked nature shows, we had that too. The customer got to pick. The end result: Customers not only spent more time in front of the TVs, but bought more of them. Reports were coming back that employees were selling the units hanging on the walls. Digital signage and touch screens contributed to the customer’s desire to learn more about the product and make an educated decision. In other words, that decision to purchase is greater when digital signage plays its part.

Like real estate, it’s all about location. But, too many signs and you look less like you’re selling products and more like you’re a carnival. A research study done by POPAI’s MARI (Marketing at Retail Initiative) in 2007 showed that shoppers are subject to 1.5 pieces of marketing material every second, and that shoppers engage with a single piece of marketing material once every 4.3 seconds. The result is that a staggering 84% of marketing material is ignored. Digital signage has allowed retailers to reduce the noise and clutter by creating singular points of dynamic and compelling messaging. Instead of signs hanging everywhere, a single screen with the right message draws attention. For frequent visitors, it builds muscle memory. The customer doesn’t search for a message, it’s right where she wants it.

Digital signage has enabled retailers to create multiple points of sale. In some cases, you can purchase items at any touch screen kiosk located in a retailer. Think about the large department stores - Sears, JCPenny, Kohl’s, Macy’s, etc. - that have cash registers all over the store. But, now it’s a kiosk, not a huge counter with two utility tub-sized registers. And those touch screens are connected to the outside world. If you go to a store to buy and item and the store is out of stock, you can buy online from the retailer and have it delivered to you. Another ding of the register without a product changing hands yet.

Finally, Digital signage has made marketers better at understanding how customers want to be treated. The retailer doesn’t control the sales cycle, the customer does. Customers are bringing reviews and opinions into the store on their mobile devices, and shopping for items on their own time. As a channel in the ecosystem of interactivity, digital signage complements the customer’s experience. The data that can be collected from a customer’s behavior with a touch screen or interactive device is invaluable to a marketer that nowadays needs that real-time information to deliver a compelling shopping experience.

As we continue to steamroll into the next evolution of communication, the channels available to marketers will evolve direct proportion to the customer’s desire to use them. Instead of trying to alter a customer’s behavior, digital signage will support, and sometimes encourage, that behavior.

And then hopefully the marketers won’t need four different meetings a week to talk about the same thing. And they’ll get something done, like sell more stuff and make more money.

 

Paul Flanigan is a founder of The Preset Group, a digital signage consultancy. Formerly from Best Buy, he is a frequent speaker and hosts seminars on digital signage. He writes about digital signage at www.experiate.net and can be reached at paul.flanigan@experiate.net

Originally published on pages 24-26 in the November/December issue of Signage Solutions Magazine.