Digital Signs of Life in Retail in 2017

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Retail stores are under siege by online options, and the 2016 holiday season simply underscored the issue—online sales were up, Amazon captured more share than ever and store sales were flat or declining. Traffic to stores, forget about sales, was down. The leadership shake-ups within retail continue, with Ralph Lauren and Tiffany being the most recent to announce CEO changes, and Macy’s fending off rumors of an acquisition bid by HBC – all on the heels of poor store performance over the holidays.

Retailers across all sectors of the industry are talking about how to revitalize or transform the store experience, with “increasing digital’s presence in stores” at or near the top of the list for how to implement that transformation. That’s good news for digital signage, but it is by no means a slam-dunk for digital signage solutions. In this modern age of digital in stores, retailers need more than just screens on the walls, even if those screens might be connected to the Internet.

At NRF’s Big Show 2017, there were plenty of examples of signage solutions on display throughout the expo floor. Three big themes caught my eye, and these look to be themes that will play out over the rest of 2017 and beyond:

Theme #1: Multi-purpose

It is no longer enough for retailers to put screens in store with a set playlist of content, even if that content is updated frequently. Digital signage has to serve several functions at once, from eye-catching graphics that attract from a distance to detailed information that informs when a shopper is close.

Similarly, it’s not enough to measure the effectiveness of signage by comparing stores with signs to those without to see if there is some kind of sales lift. Retailers will always want to measure success that way, but when signs have to serve multiple functions, retailers will need more sophisticated and granular ways of defining and measuring engagement. Every implementation of digital signs I saw at NRF included cameras to measure consumer engagement from dwell time to identifying basic demographics to measuring the consumer’s emotional state—Happy? Angry? Neutral?

Theme #2: Interactivity, ideally with a mobile angle

I saw several examples of digital signage enabled for interactivity at NRF 2017, from big screens that would go in a retailer’s storefront window that provide interactive games accessed via a text message from a shopper’s mobile phone to in-store interactivity managed with an employee’s mobile device.

I’ve long heard digital signage strategies that embraced the idea of using a barcode or Bluetooth or a short code to connect a consumer directly to a digital sign. The use cases involved everything from letting the consumer use the phone as a remote control for the sign, to moving information off the big screen to the consumer’s small screen, for example to complete an order where the shopper would not want their address or credit card information up on a big display. I have seen very few of these applications out in stores in the wild, but as smartphone adoption rapidly approaches the saturation point, and retailers increasingly have mobile apps that would make those kinds of connections to in-store assets easier (and easier to track), I think we’ll start to see more of it in deployment.

The most interesting example of interactivity I saw at NRF 2017 was in Toshiba’s booth. The vendor demonstrated how a shopper and an employee could collaborate together to create an outfit by using the employee’s tablet to swipe through options, while integration to the big screen showed a life-size version of the outfit selected in real-time.

Theme #3: Value to the shopper

This theme of value to the shopper is nothing new. But it reinforces the idea in theme #1 of “multi-purpose.” Yes, digital signage can convey the retailer’s brand value or support or reinforce the retailer’s lifestyle expertise, and that has a kind of value. But that value alone is not enough to support the hardware and content investments that retailers need to make to ensure that digital signage stays fresh and relevant.

The key is in ensuring value to the shopper, and there are really only two kinds of value that are important: either some kind of entertainment value or some kind of utility. They don’t have to be mutually exclusive. You don’t have to focus only on one dimension or the other. But at least one of those dimensions needs to be there for the shopper.

On the entertainment front, a good example is the one I mentioned above, of controlling a video game with a mobile phone to interact with the retailer’s storefront display. It might seem simple or even silly on the surface, but think of it in the context of a fitting room lounge and the theme of multi-purpose. A husband waiting for his wife outside her fitting room could be entertained by a digital sign that can convert from lifestyle images to a simple and thematic game, which reverts back to lifestyle images when the gaming session is done.

Utility is the other key kind of value retailers should be looking to deliver to shoppers. Think of utility in terms of saving time, saving money or providing convenience. But the key is to think of it from the shopper’s point of view, not the retailer’s. Offering promotions or offers can save money, but only if the consumer sees the offer as relevant. Offering products that complement the one a shopper is looking at is convenient, but only if those products are ones the consumer actually likes. Of greater utility: offering to locate a different size or color of item, or offering to validate a new purchase against past purchase history, for example, validating if the blouse in hand is in the same color family as the pants she purchased a month ago.

The Bottom Line

If retailers can pull together all three thematic elements into their digital strategy in stores, they do have an opportunity to use digital signage as part of their effort to revitalize the store experience. But if they keep on with bad implementation practices of the past, like focusing on the value to the retailer at the expense of the shopper or implementing a digital signage installation that is inflexible and a one-trick pony or ignoring the opportunity for interactivity, then retailers will be back where they started when it comes to stores: searching for relevance in an environment where the store is increasingly out of touch.

About Author

Nikki Baird is Managing Partner at Retail Systems Research, an industry market intelligence firm specializing in the impact of technology on the extended retail industry. She focuses on trends impacting the consumer-retailer relationship, along with their supply chain and marketing implications.

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