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The Benefits of Digital Signage

To gauge the benefits that retailers expect from their digital signage investments, we spoke with several large retailers in different stages of implementation. The most important drivers for digital signage include the following –

Higher quality, More Compelling and Informative Content

At the very top of the list comes the opportunity to truly engage customers in the store – when they are most likely to be influenced – and enrich their shopping experience. Digital signage successfully draws consumer attention to key in-store promotions. The immediacy of digital signage is a powerful motivator. Many retailers told us that they saw a marked increase in sell-through of merchandise that was promoted via digital signs. Digital signage can be a particularly effective way for retailers to promote private-label brands that carry higher margins. Digital signage is also an excellent tool for high fashion merchandising and other lifestyle marketing because it engages the viewer with compelling video and audio effects (high fashion retailers are investing in high definition video for this reason.)

Because digital signage can very easily be customized, for example, by geography, time of day, season or demographics – it can be made more relevant to the consumer. Grocers, for example, can set up different play lists for morning food shoppers, after school snackers and commuters on their way home from work who might also buy beer or wine. Merchants can insert promotions for umbrellas when it’s raining, air-conditioners when temperatures climb, etc. Hardware chains can direct content about tractors and animal food to their rural customers, lawn seed and hand tools to their suburban customers and storage and space- saving products to their urban dwellers. Home improvement retailers can target content by merchandise area to help do-it-yourselfers choose the right products for their plumbing, painting or electrical projects and they can cross sell house plants in the winter and annuals and perennials in summer.

Digital signage – with directional audio – can also be especially useful in do-it-yourself (DIY) retail environments in which consumers need more “how to” advice to help them select a product. This can be particularly valuable in retail environments where staffing levels are a constraint or where sales associates are not experts in the use of every product the retailer carries. (Digital signage can also be used to train store employees during off business hours so that they can gain expertise).

Digital signage can incorporate local news, weather or other tropical information providing way finding or a public service to shoppers and can allow the retailer to be more a part of the community. Digital signage with community-interest content can shorten the perceived wait time at check out.

In addition, digital signage offers retailers the potential to integrate dynamic displays with other IT systems in the future. For example, digital signage programming could be tied to inventory levels. Play lists could be correlated with point-of-sales data and market basket analyses to evaluate the effectiveness of messages by time of day or location. Digital signage could be integrated with video surveillance to analyze buyer dwell times. It could be connected to sensors that make the viewer part of the equation, for example, sensors could read the radio frequency identified (RDID) tag on a garment that the shopper in front of the sign is holding cur the signage system to insert an ad for suitable accessories, or sensors could infer the viewer’s age and gender and cur the signage system to play content for the viewer’s specific demographic

Employee Communications and Training

Many retailers use their digital network off-hours for employee communications and training, particularly because traditional communications methods are inflexible and impersonal and because PC based training is inconvenient or impossible. Employee turnover and seasonal increases in part time staff can make training a significant issue for retailers, creating DVDs or other training materials and mailing them to the stores is a cumbersome, expensive and slow process.

With digital signage network, it is the perfect vehicle for updating sales associates chain-wide about new promotions, seasonal merchandise, and so on. Some retailers deliver a brief, daily program half hour before the store opens to provide corporate communications and new product training to reinforce selling messages for the merchandise they want to move the most. This approach leads to increased sales employee productivity, higher job satisfaction rates, and a more cohesive corporate culture.

Marketing Speed and Agility

In addition to the flexibility to tune messages by store zone, location, season, customer demographic and potentially – as noted above – the individual viewer, digital signage gives retailers tremendous agility. Digital signage enables retailers to respond quickly to changing market conditions – where the time to deployment for a new promotion often means significant competitive advantage.

With traditional, static signage, it can take days or weeks to roll out a new promotion across all of the stores in a large chain. In-store printing certainly helps to address this challenge but most traditional signage is printed off-site, mailed and then hung up by store employees. In addition to the time this takes, managing compliance in this regard is often a big challenge (often, the signs don’t even make it onto the store floor or outdated signs are not taken down).

Digital signage also gives retailers a valuable tool for testing new promotions in a targeted group of stores – experimenting with sign placement, message and tweaking according to consumer response – before implementing them out chain wide. The ability to correlate what is played on digital signs to point-of-sale data gives retailers the immediate feedback they need to optimize their in-store marketing.

Finding just the right balance between the need for centralized control over promotions and flexibility at the local store level can be a challenge in many retail settings. Retailers may need to give their franchisees a measure of autonomy while also ensuring the consistency of their brands. Selected stores may have opportunistic inventories to sell that aren’t part of chain wide promotions. Promotions also may need to be adapted locally according to variables such as season and weather. Digital signage helps address this “tug of war” by enabling retailers to flexibly define roles and responsibilities as well as variable schedules for content play out.

Advertising Revenue

Digital signage creates more in-store advertising ‘real estate’ than traditional, printed signs. Digital signs can cycle several ads in the course of the average time a viewer looks at the sign. Because digital signs displaying video and graphics are so much compelling than printed signage, the retailer can offer a much high-impact advertising opportunity to its major brands.