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In a nutshell, digital signage can be defined as digital displays and content that can be remotely managed over an IP network. Digital signage systems provide centralized scheduling, management and publishing of digital media assets to on-premise digital displays and kiosks. Digital signage servers typically provide capabilities for content authoring and the creation of play lists, content management and delivery, and device (display) management. Displays are connected to the network via media players and the media players communicate with the digital signage server software to play out content.

Digital signage is sometimes referred to as narrow-casting because digital signage systems are generally all capable of directing different play lists to different displays. Not surprisingly, many of the early digital signage vendors had a background in broadcast or other TV technologies. In fact, a critical advantage of a digital signage solution lies in its ability to support video, in addition to graphics and text – video is far more compelling for the viewer.

Digital signage networks running over IP are only now starting to see broader adoption as bandwidth and storage have become more affordable and available as digital signage solutions have matured. Happily, we are well beyond the early experimental days when retailers attempting to replace static, printed signage with a more compelling display had to resort to a PC with a monitor and a DVD player (PC-based solutions were also fragile and prone to failure, and updating the content was a completely manual process). We are also beyond the days when digital signage represented such a large initial capital investment that only an advertising supported network seemed feasible. Today, retailers can implement their own digital signage networks as incremental cost.

But improvements in operational efficiency only go so far towards enhancing the top and bottom lines. To grow revenues and profits, retailers must increase inventory turns and boost same-store sales. Optimizing the marketing mix to achieve this goal is no easy task.