Fitting Digital Signage into the Retail Strategy

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By Garry Wicka, Head of Marketing, Commercial Division, LG Electronics USA, Inc.

When it comes to generating traffic and conversion, few elements deliver as much value to retail as digital signage. However, its benefits are often not realized due to lack of consideration in either the digital or omni-channel strategy.

On the omni-channel to-do list, analytics and impact attribution, inventory visibility, customer visibility/insights and enterprise-wide e-commerce figure prominently. In-store digital signage is not usually included in the omni-channel program, despite its contributions to traffic and conversion. This may include its ability to drive patrons to the mobile app for engagement or to the retailer’s website for inventory visibility, product information, online ordering or browsing.

In other cases, digital signage is bundled into the overarching digital strategy for omni-channel engagement, which retail executives are challenged to support, according to Retail Systems Research.

The key benefit of digital place-based media is that it adds brand and promotional vitality to the facility to attract and hold shoppers while converting browsers to buyers.

Whether visible in the store window, from the exterior walkway or from a different department in the store, digital signage with strategic content attracts customers and generates in-store traffic. When placed at the back of the store, it deepens the shopper loop.

Using images that promise the fulfillment of needs and wants through the expression of the brand promise prepares customers for discovery and immersion into how the brand will better their lives. Attractive images and messages transition the shopper to conversion, aligning with and supporting supplier and merchant campaigns with product information and promotions.

Fitting Digital Signage into the Retail Strategy Dwell time in discovery, assessment and comparison is a long-standing signal for buying assistance. Digital signage can signal when customer assistance is needed to enable trial/try-on, final selection, up-selling, and cross-selling. Associate time is better utilized when digital signage provides initial information, and stores realize greater revenue and margin results when digital signage is integrated into the sales and service process.

Digital signage at check-out is used by Wal-Mart and others to reduce perceived waiting time and encourage product purchase as bounce-back.1 It also fuels future traffic and the propensity for future purchases. The visit experience is improved as checkout impatience is reduced, and the store benefits when baskets are not dropped, carts abandoned or items de-selected. 

Generating analytics in a category or at a point-of-purchase through anonymous viewer analytics can offer insights to messaging success and inform refinement of the display content.

So what is holding digital signage deployment back, especially when the digital signage investment can at times be funded by retail suppliers?

Retailers are obsessed with back-office technology investment. Applications such as point-of-sale, inventory management, payment processing and others require maintenance, and their upgrade can often be addressed under the omni-channel umbrella.

Unfortunately, digital signage is seen as a stand-alone or silo application. To gain the benefit of the retail fundamentals of traffic and conversion, the retailers must plan, install and leverage the digital signage medium. It is too often considered as just a property improvement or a supplier merchandising program, and not integral to improving the shopping experience.

In an August 30, 2016 discussion, RetailWire.com posed the proposition that “Retail executives have no clue about digital.” In the 30 comments that were posted2 by retail sector pundits, many pointed to the importance of executive support and change management.

Nikki Baird, Managing Partner of Retail Systems Research (RSR) and formerly a principal analyst at Forrester Research, noted in a summary article3 of a benchmark report the key finding that, “The disconnect is at the executive level, and it comes from having no clue what digital really means to the retail business.”

In citing that most retail executives fall back to the traditional merchandising or marketing learned in their retail experience, Baird said, “The bottom line is this: no substantive change is coming to a retail enterprise unless and until the executive team understands the nature of the digital transformation that is impacting their business. This isn’t about fixing the store, or even ‘creating a more seamless customer experience,’ a phrase I often hear thrown about.” She added, “This is about understanding how consumers are changing their own shopping experiences. This is about understanding how technology – consumer-provided, retailer-provided – will continue to change shopping experiences. And, apparently, until retail executives develop a deeper sense of empathy along those lines, traditional retail will continue to fail to meet consumer expectations.”

In end-user surveys that serve as the basis of reports such as the RSR benchmark study, digital signage is commonly not included as a response option for data gathering. It’s also worth noting that few benchmark surveys address the use or plans for in-store digital signage specifically.

The RSR benchmark report Retailers’ Omni-Channel Blind Spot: Digital4 states that, “In 2015, only 11 percent of retailers reported that the primary function of digital was to drive traffic to stores. In 2016, 20 percent of respondents agreed this is the primary role. The percentage of retailers citing digital’s primary role as creating brand awareness has steadily fallen over the last three years, from 20 percent in 2014 to 17 percent this year. On the other hand, the objective of educating consumers about lifestyle elements is a differentiator of the most successful retailers.”

The report says that retail winners have a different set of priorities when it comes to addressing the technology to-do list. It also distinguishes retail winners as “having an executive team that lives digital as much as store” and “a company that is dedicated to modernizing technology and process,” and “uses all the data it can.”

These are encouraging statements for consideration and use of digital signage within the omni-channel or digital framework for customer engagement.

In the same RetailWire discussion, Sterling Hawkins, co-founder of CART (Center for Advancing Retail & Technology), described the challenges of integrating new approaches, while noting that “Target, Home Depot, Lowes, and many others have learning labs or future stores to test and try out new technologies – the best of which are usually rolled out.”

The challenge for retail executives is to determine where leadership for digital signage consideration belongs in their organizations.

Executive briefings, experimentation, learning labs and visits to other customer-facing organizations can each improve awareness, comfort and competencies leading to investment in enabling place-based media. But nothing moves investment forward like designating a project leader to examine and report on the possible return on investment. 

When the in-store digital signage strategy finds its place in the retail organization, it also will prove its value in improving customer experience, revenue and margin achievement.

1 Bounce-back is the action of consumers to leave product pick-up or check-out to add additional items to their basket/order.

2 https://www.retailwire.com/discussion/retail-executives-have-no-clue-about-digital.

3 https://www.rsrresearch.com/research/retail-executives-have-no-clue-about-digital.

4 “Retailers’ Omni-Channel Blind Spot: Digital.” Benchmark Report by Nikki Baird and Brian Kilcourse, Managing Partners. August  
    2016.

By Garry Wicka, Head of Marketing, Commercial Division, LG Electronics USA, Inc.

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