08/08/11

By Hannah Prevett

After years of tentative testing and pilots, digital signage is finally coming of age. The figures would certainly seem to suggest as much: research earlier this year commissioned by LG (which, admittedly, does have a vested interest in extolling the virtues of digital media) found that the number of UK shops now using digital signage has quadrupled since 2007.

This certainly sounds impressive: a rise from 12,500 to 46,000 stores in four years (and a further 12,000 expected to roll-out schemes by the end of 2011,) is not to be sniffed at, but still represents a tiny fraction of the UK retail landscape.

That’s not to say it won’t become more mainstream - all the signs suggest it will, at least in certain sectors - but who are the trailblazers? One obvious (albeit non-UK) example is Walmart. The US retail giant is often cited as an example of a company
doing digital in-store media effectively, and claims to have boosted conversion rates as a result. But as with all nascent technologies, it’s taken several years to evolve and develop into its current form, under the watchful eye of the worldwide retail community.

The success of Walmart’s in-store media all boils down to clever targeting, says Simon Goodall, strategy director at retail marketing company Saatchi & Saatchi X. “Walmart has eye-level screens within every category, which means they can deliver much more targeted messages that are actually helpful for shoppers, rather than just generic advertising messages.”

The old ways
And that is, of course, what in-store media looked like in its first incarnation. Even to the untrained eye it was archaic, badly designed and ineffective. “One of the early failings of in-store screens is that many retailers were trying to replicate
the advertising model in-store - big screens seen predominantly as money-making opportunities rather than to help shoppers,” says Goodall.

Lisa Fretwell, head of retail at Cisco UK and Ireland, agrees that in-store media has undergone a change in direction - for the better. “The way consumers receive information has changed dramatically. They are now living with what we call the fourth screen life. They spend a lot of time with the PC screen, TV, their mobiles, and now public screens.” As she rightly points out, the public are rapidly becoming more au fait with screens, thanks to the ubiquitous nature of smartphones and the increasing popularity of touchscreen facilities in the public domain, such as check-in kiosks at airports.

But just because customers find the technology easy to use, that does not mean it’s easy, or cheap, for retailers to implement. Digital signage relies on a variety of hardware and software to deliver the content. The components vary from installation to installation, but will typically include one or more display screens, one or more media players and a content management server. Then there’s the cabling to link the component parts, unless it’s operated across a wireless network. The cabling can cause some of the biggest headaches, especially if the implementation is taking place in a store that was not built for purpose.

Luckily for Enda Kelly, operations director at new lingerie retailer Boux Avenue (which is owned by Theo Paphitis), in-store media was part of the company’s strategy long before its stores were fitted. “Because we planned it from day one, we created all the flexibility we possibly could, even to the point where the 65 inch screens in our windows can be flipped to be either portrait or landscape.”

For Boux Avenue, deploying screens across its six stores was a fundamental part of its broader multi-channel approach. “We’re operating a fully integrated, multi-channel business. So instead of seeing the usual PoS material, they’ll go in and be presented with images reflecting what they’ll see on the internet. It’s like bringing the web to life in-store.”

For this particular retailer, the screens aren’t just seen as a nice-to-have, but an absolutely crucial element of its strategy. “It’s been terrific; it’s definitely been one of the plus points of our brand launch.” Kelly also claims that it’s been easy to manage from an operational standpoint; however he does recognise that he was at an advantage because he was able to draw on the IT resources and expertise of one of Paphitis’ other businesses, stationer Ryman. “That’s probably where we’ve had a serious reduction in cost. If you have to rely on a third party to whom to outsource it all, that could be very, very expensive,” he concedes.

And he does have a word of warning for retailers considering making a similar investment: “Proper planning is key,” he says. “If you plan it well, execution is not difficult.” And Kelly doesn’t necessarily mean in terms of the technology: “There are always lessons learned and for us it was to plan our content further in advance. As a fast-paced fashion business, we’ve got to have the content ready in the right format when we need it.” And indeed, it seems to be living up to the challenge, as do a myriad of other fashion retailers, who seem to be truly leading the pack in this domain, with big name fashion brands from New Look, to Mango, to Guess, deciding they want a slice of the action.

But what may work for a major fashion house, may not work for a standalone boutique. “I think this will catch on and scale - but on the whole, it’s going to be the big boys. And the reason for this is content. Content is the make or break of digital media,” says Fretwell. This is why, she says, small or medium sized retailers may struggle to incorporate in-store screens into their digital media strategy.

But Boux Avenue’s Kelly disagrees, as does Goodall. “Small independent retailers have the ability to use screens to create a very different type of shopper experience - it doesn’t follow that they shouldn’t use screens.” And while he recognises that the cost will be driven lower in large organisations where they can build an estate of screens, “if you only have a few branches the overall cost is still quite low,” Goodall points out. “It’s about understanding the needs of your own customers and deciding what role screens are going to play. That’s your starting point.”