In-Store Drives Digital Signage Growth

September 20th, 2007 Nurlan Urazbaev

It is quite gratifying to see a confirmation of the trends that we at BroadSign have been watching emerge first-hand since 2003:

Here are some of them:

1. Retail is the fastest-growing segment of digital signage because it is fuelled by advertising and promotional budgets, and it provides direct and more effective access to the mass audience lost by traditional media. This article by advertising analyst Nigel Hollis quotes market research firm Frost & Sullivan as saying that by 2011, 90% of retailers will have in-store digital screens.

2. Once a network is conceived, it becomes a mass medium, so it should be driven by content strategy, not technology. Otherwise it will fail (as in Tesco example). Also see Lyle Bunn’s article Digital Signage 3.0 on the subject.

3. In areas with high foot traffic volume, longer ads will not work. I remember when three years ago we recommended 5-7 second-long ads versus 15- and 30-second ones to a big box retail network owner, they looked upon us as if we had escaped from a lunatic asylum. It is music to my ears when Nigel Hollis says: “In the U.K., the major grocery chain Tesco endured three years of lackluster results before figuring out what really drives in-store success: brevity. While online advertisers debate whether a pre-roll of 15 seconds is too long, Tesco’s marketing partner Dunnhumby recommends five seconds for screens placed in the main shopping aisles.” My feeling is that soon we may come across super-short, 3-4 second ads in areas with dynamic customer traffic.

4. Digital signage ads do not have to be fancy and expensive to make, as their power ”rests not in their creativity but in their proximity to purchase,” as Nigel Hollis puts it. They just have to be well-made, attention-grabbing and effective. We are seeing a whole new industry being born: digital signage content producers. These people will not offer you to re-purpose TV commercials, they will use your images or create new ones and produce digital signage-specific content tailored to your campaign goals, at a fraction of the price of a TV commercial.

5. Digital signage is not for branding. By its nature, it is best suited for boosting sales and generating cross-sell and up-sell. Why waste money trying to brand on digital signs, while you can actually move products off the shelves? According to Nigel Hollis: “The (in-store video) alerts reported to be most effective are those for price-off events and new or seasonal items.” And , he contines: “Because its (in store video’s) influence is concentrated at the point of purchase, it will be most successful for categories that are already impulse- or activation-oriented. Though useful for encouraging switching, in-store video is not as good at building long-term brand loyalty.”

For other recent insights into retail digital signage, see Retail Digital Signage research paper by digitalsignagetoday.com, and my interview with five experts: retail_digital_signage_from_niche_to_mainstream_nu_article_april12_07.pdf

Entry Filed under: The Big Picture, Uncategorized