Opinion: Whats the Buzz on Digital Signage?
Alex Richardson of Selling Partners offers his opinion on trend in Digital Signage. Interview by Rick Redding of KioskCom. Alex is a leading self-service kiosk consultant.
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Ask Alex: What's All The Buzz About Signage?
Richardson weighs in on the industry's hottest topic
Alex Richardson is managing director of a consulting firm, Selling Machine Partners, which designs customer-facing strategies for cross channel retailers. Richardson has followed the fortunes of various self-service technologies for two decades, and is frequently sought out as an advisor by companies considering self-service initiatives including kiosks and digital signage.
KioskCom: What does the next year hold for digital signage?
Alex Richardson: It’s an overused metaphor to look to history in order to predict the future. I believe, though, we’ve learned two key points from our 50 year history with broadcast television: (1) Moving pictures create a mystical dog whistle for a consumer’s attention; and, (2) Product demonstrations on television increase the velocity of consumer sales.
Leading businesses have spent billions of dollars developing content for television, radio, print and web sites that extend their catalog of products and accompanying information to the home and office. Now, they realize that the same information and product breadth should be used to keep their bricks-and-mortar investment healthy. They also realize that the less knowledge and sales capability there is at the point of sale, the more valuable their investment in digital merchandising solutions. Digital signage solutions are one of the most cost-effective ways to deliver their message directly to the consumer when and where it is needed most, at the point and time of purchase.
A key challenge for the digital signage industry in the coming years will be how to raise their value proposition ahead of all the other retail technology initiatives. Retail technology executives face massive distractions as they button up core IT and ecommerce building blocks such as, Supply Chain Mgmt, Order Entry, CRM, Analytics, Pricing Optimization, just to name a few.
I don’t recommend a retailer initiate an in-store digital signage solution until: a) They ensure that their customer facing channels talk seamlessly to each other and b) Their B2B and B2C channels continuously rebuild their Knowledge Base (CRM).
KC: What is the most viable self-service application for digital signage?
AR: The core value of a great digital merchandising solution is relevance. I recommend that you start from the consumer’s point of view; turn off your computer, go visit the store and talk to store customers and store associates.
Every step that makes a message more relevant to the viewer, increases the likelihood of impact – that it will be seen, digested and, hopefully, acted upon.
Relevance is derived from:
Current business realities
* Time/day part
* Locations of Retail Store: Connecticut vs California
Being Opportunistic
* The weather changed
* Let’s mark this product down to pressure the competition
Legacy business systems and data
* Supply chain, CRM, price optimization, markdown optimization, POS transaction, HR /Associate Training Assets
Relevance is derived from the merchandising and promotional tools you use and infrastructure you build. The bottom line is that digital signage is a different medium, requiring a different set of software tools and merchandising functionality.
So the key question that the digital merchandising must address is: What problem does my retail consumer (or associate) want to solve in those specific five square feet of retail space, at that particular moment of time of day and time of year? Answer this question and you’ll make the cash register ring.
KC: What is the most critical role digital signage is playing/can play in various verticals?
AR: Digital Signage was born in the transportation vertical (airline, train) as well on the factory floor for employee info. The Wal Mart (NYSE: WMT) TV network was also an early pioneer for big box stores.
The industry seems to be moving rapidly to help leverage the growing base of kiosk POS systems designed to reduce consumer queuing. The signage prods the consumer to avoid the wait and use the self service ordering device.
One of the most innovative digital signage applications that I’ve seen is inside an English Pub. Instead of the standard branded beer tap, the beer manufacturer put a small 2x3 digital display to show their brand, value and encourage the bartender and consumer to “notice” their beer versus the other beer vendors.
On a worldwide basis, I believe that you’ll see North America continue to lead the digital merchandising market. Since it’s all about improving the consumer experience, many retailers will innovate in different ways. For example, in China, Kentucky Fried Chicken's Yum! Brands (NYSE:YUM) has four or five greeters at the door of every restaurant. The greeters help customers finds seats, help families with small children, and assist elderly customers. If money is no object, improving the quality of your retail store associates remains one of the best methods to accelerate sales and enhance customer loyalty.
Posted by keefner at May 4, 2006 11:38 AM