Retailers spend lots of money on advertising and marketing through traditional media, creating rich messages that reach consumers everywhere, except where they make the bulk of their buying decisions — in the stores. At the moment of truth, for the most part, customers are on their own when they make an impulse buy. They are guided solely by static in-store signage or are left to recall branding messages delivered by television, newspapers and magazines.

Now, retailers are discovering the impact of interactive visuals at the point of purchase, targeted to specific, personalized consumer interests and served up instantaneously across a digital network. These digital signage and messaging systems can be precision targeted to time of day, day of the week, store location, current weather conditions — whatever is key to connecting with customers at that place and time. And that flexibility translates directly into increased retail sales.

With a digital signage network (an in-store television channel, if you will), the possibilities are endless for capturing and focusing the consumer's attention. With the creation of in-store programming, marketers, store managers and brand manufacturers can capitalize on a powerful new tool.

Customizable, tailorable and automated, a digital signage network can deliver rich promotional messages featuring graphics, text and moving images, helping the retailer connect with consumers on both an emotional and needs level, persuade and ultimately, move them to make smart buying decisions based on the timeliness and relevance of the content. The beauty of such a system is the flexibility to stream eye-catching content and refresh it, virtually anytime, anywhere.

Digital Evolution

Point-of-Purchase Advertising International (POPAI) research shows that specific brands advertised on digital signs can see a 30-percent increase in sales, while overall store sales can increase as much as 12 percent. Even basic moving messages in a low-resolution dot-matrix display draw seven times the attention of printed signs.

Given such results, retailing digital signage is enjoying explosive growth. Dollars invested in this emerging advertising and marketing venue are expected to more than double over the next 24 months — to $1.5 billion by 2005. Savvy retailers will earn significant sums from marketers willing to pay handsomely to increase their exposure with such in-store promotions.

What's the real breakthrough with these new systems? In-store video technology has been available for some time. But it has been limited to isolated content, usually videotapes and DVDs that play the same content over and again. The information could not be adapted and repackaged based on regional preferences, lifestyle trends and buying patterns of a particular market. The result was a generic message void of any feeling of a one-on-one connection with the shopper.

But the new systems make it possible to quickly assemble creative programming. For example, when the weather warms up, a retailer can show full motion video of a new line of bathing suits, rotating each suit to show it from all sides. Demand for bathing suits — and for summer gear in general — can be induced by using the same screens to show video or graphic footage of accessories, such as beach towels, sunglasses and sunscreen, a cooler or other related items.

Similarly, a specialty retailer selling designer clothes can display an ensemble outfit, including the top, pants, shoes, chic new designer bag and scarf. Connecting and cross selling opportunities explode as digital messaging creates synergy between what would otherwise be individual purchases.

Other implementations emulate the role of a disc jockey at a discothèque. By observing the crowd at a retail location through remote cameras, a content controller operating from a remote location can focus on the audience to gauge their receptivity and reaction to the content being shown.

By extension, store managers and marketing managers at a retail chain can monitor and measure the effectiveness of the content by synchronizing with their computer system to see what impact it had on sales. Here, the boundaries between shopping, entertainment and infotainment dissolve into a new kind of retail experience. Here, this “enhanced shopping experience” comes to focus exactly where and when customers make impulse buys.

The real power of this emerging medium comes from combining electronics, entertainment and communication. This generates multiple benefits that are not available from static video messages. The new signage network allows retailers to connect directly with consumers, increase brand awareness and generate a new revenue stream from the sale of advertising space to manufacturers and brand marketers.

Who Walter Sebastian
Vice president of segment marketing for Sony Electronics' Business Solutions and Systems Co.