Oct. 16, 2012
By Stuart Armstrong
President Americas, ComQi
In a retrospective moment I decided to pull out an article that I wrote in early 2008, "Merchandising 2.0." In this article I predicted the following:
"If the remote control has spelled the death of advertising on television, then the cellphone ushers in the re-birth of advertising — as information — at retail. The cellphone is the new remote control of marketing, and this time it is our best friend."
I go on to point out that the (now-called) smartphones will serve as a just-in-time information resource and support transactions anywhere, anytime for the shopper. As much as I was directionally correct in the influence of this technology on retailing, my predictions fell short of what today's technology is capable of and how retailers are already reinventing the in-venue shopping experience. This piece attempts to examine how in-venue media is being used to drive positive change for both the shopper and the retailer.
Let's start with a high-level view of digital signage within the retail store.
The "digital signage" moniker implies static and passive communications that have no precise contextual awareness. While the name has stuck, most everyone understands that the ultimate power of the digital sign is in delivering the right message, at the right time, at the right place. In other words, effective digital signage needs to be relevant to the viewer. You have to earn their eyeballs through the content before you can get any shopper mindshare. The watchwords to achieve that are relevance and recency. Just like there are differences between the cellphone and a smartphone, we can differentiate between a network with a standard playlist on the screen versus a network that employs software and methodologies to pinpoint messages to a specific screen location at a specific time of day. Digital signage versus smart signage.
With that in mind, if you are planning to invest in digital signage make sure you look for a content management system with the below "smarts" to make your network a success:
- Automatic placement, what we like to call non-deterministic programming of a unique playlist supported by content and location attributes (meta-tags). This, with a set of business rules, enables content to automatically find its way to specific locations with very few people managing the scheduling and publishing of content.
- Generate real-time content by utilizing open APIs, or application programming interfaces, to feed various data in and out of the CMS to create content on the fly. A sampling of these sources includes external cloud-based data such as weather, news, sports and shopper-generated information from mobile devices; and retailer enterprise data such as ePOS, inventory, pricing, merchandising and additional shopper loyalty data.
- Conditional playback functionality that can utilize the above data feeds to intelligently alter the playlist by adding or removing content in order to enhance relevance. For example, if a product on promotion becomes out-of-stock, then remove that promotion on the screen in that store. Or, if the local sports team makes the playoffs, then display "Congratulations" and promote party foods or the purchase of a new big-screen LED. You get the idea.
- Utilize selective store staff to display relevant messages that drive incremental sales. A CMS should allow you to empower your store to manage the on-site messaging based on their experience and knowledge in connecting with the community, employee of the month, local sponsorships and charities, etc.
As I mentioned earlier, smartphones are a game changer, particularly in the retail industry. However, applications can be either a friend or foe to the retail store. Pricing and consumer report apps can turn a retailer into a physical showroom for the shopper as they touch and feel products that they will ultimately buy elsewhere. We need to know how to best utilize the smartphone so it's no longer a foe. How can this ubiquitous device help you drive conversion, transaction size and loyalty?
First, we must understand how smartphones are currently being used amongst shoppers and where our greatest opportunity lies. According to research done by both comScore and Forrester, four out of five consumers use smartphones to shop and an average of 22 percent of smartphone owners have used a shopping application in the past three months. Add to that, a fact uncovered by the CMO Council, 54 percent of North American consumers would consider ending their loyalty relationships if they were not given tailor-made, relevant content and offers. These statistics show that smartphones have a significant presence with shoppers, yet phone apps need to be more targeted and offer greater incentives to encourage engagement. Retailers should look for ways to interact with shoppers through Web-generated applications that come up instantly versus downloadable apps that create a barrier in adoption. Also, don't rely too heavily on information or the novelty factor to earn high adoption amongst shoppers. The incentive or the entertainment factor needs to be significant enough to prompt shoppers to take out their mobile devices and engage.
If done correctly, smartphones can be an important and valuable point of in-store engagement between the shopper and the retail brand. To get there, let's look at the potential interplay between the smart sign and the smart phone.
Demand shopping is an interactive in-store experience that we have developed. Many retailers are talking about it, and I believe it is a good example of what is possible in retailing. We are all familiar with the model. We have seen it used successfully in some of the biggest shopping brands such as QCV and Groupon. At its most basic level, it is the promotion of an item where there is a finite inventory that gets counted down both in units and time. When implemented in a store the promotional price can be driven down based on the number of shoppers opting in. Imagine a designer handbag is displayed on a smart sign with the starting price of $80.00 for the next 40 minutes. The shopper is instructed to scan the QR code, triggering a Web-based app to appear on his/her mobile phone. The app prompts the shopper to sign-in directly on a mobile Web-page or they can link in through Facebook or Twitter. Once signed in, the shopper can tag the handbag, which in turn drives down the price and sends a redemption code to their phone. Further, her friends can view the purchase and inspire a wave of similar purchases. As the number of shoppers who opt-in increase, the cost of the bag will decrease. Of course, the shoppers need to buy the item before the inventory or time runs out. As the image illustrates, items can be selected to be displayed on the smart sign based on a planned promotional calendar, end of season items or by flagging over-inventoried items.
Other brand reinforcing experiences can be voting, trivia quizzes, and games. We have done all three and have inserted a few screen shots to give you an idea of what they can look like.
The last idea I want to touch on is taking a standard fixture in fashion retailing, the mirror, and changing it to create a more efficient and interactive experience with the customer. Retailers can deploy a digital signage "mirror" that "reflects" an image back to the shopper with a short time delay. In reality it is a digital screen with a mirror-like feel and a digital video camera mounted in the bezel; a media player controls the images. The shopper steps out of the dressing room in a new outfit, walks up to the "mirror," spins around and sees him/herself in that outfit from the front, sides and back. Meanwhile, the "mirror" can then display accessory ideas such as handbags, shoes and jewelry alongside the shopper. The shopper can then capture the image on her smartphone and share with her friends on Facebook, or any other social media site to get their opinions and feedback on the outfit.
This short piece has touched lightly on several areas, however I hope it triggers some thoughts on the power of convergence when smart signs, smart phones and social media come together in retail. The technology enables retailers to create experiences for shoppers that foster a dialogue between the retail brand and its customers, a dialogue that promotes loyalty, increased conversion and increase transaction size.
Armstrong is President Americas for ComQi, a provider of multichannel message management for the digital signage and out-of-home industries, with a stable of content and network management platforms and media distribution technologies.
Read more about retail digital signage.