Article

Sunlight and digital signage drive soda sales lift at European QSR chain

A digital menu board experiment suggests message frequency, subtle animation and the weather can help digital signage drive sales increases.

July 24, 2014 by Christopher Hall — w, t

European quick-service restaurant chain Panos rolled out digital signage menu boards to 150 of its 250 locations located predominantly in Belgium and the Netherlands — aiming to support the ongoing expansion of the Panos business in multiple market segments and to prove out the technology's value to franchisees.

According to a case study from digital signage software provider Scala Inc., Panos has been using digital menu boards with Scala's CMS platform for several years. QSRs are typically low profit margin enterprises, so investments in new technology tend to be heavily scrutinized and have to be well justified, Scala said on its website, so the company worked with the chain to analyze sales uplift to help justify future digital menu board investments to franchisees.

And the numbers were very good indeed.

Panos deployed 180 screens at the 150 locations, so most restaurants used one digital signage screen displaying promotional images with conventional light-box menu boards to either side, while a smaller number did deploy two screens. Scala integrator Prime Products also devised an automated upgrade process for this project to help Panos save time and capitalize on existing computers and screen investments at each branch.

According to an article by Scala Vice President of Advanced Analytics Dr. Stefan Menger posted on the company website (and apparently previously posted in the Platt Retail Institute's Journal of Retail Analytics), Scala and Panos teamed up to measure if digital menu boards could actually affect and alter consumer behavior. They tested higher-margin soft drinks at eight test locations, with an equal number of similar locations used as a control group.

In the test's first go, Panos would increase the frequency of branded messaging targeting soft drinks on the test locations' digital signage display to every 60-90 seconds. Using sales data from the time periods around the test period to normalize the data, Panos found that the test restaurants saw a 2.5 percent uptick in soft drink sales.

In its second run, the test messages were played continuously, to ensure that all customers (who normally look at the menu for up to 15 seconds before ordering) would likely be exposed to it. Panos and Scala also added subtle animations to draw customers' eyes to the messaging.

Again normalizing the data and removing anomalous outliers, this time the testers found that the test locations saw a nearly 8 percent increase in soft drink sales. They also found that the added soft drink sales did not cannibalize sales on other items.

Lastly, the analytics team looked for correlations between weather conditions and soda sales, and found that sunshine, moreso than temperature, tended to have a positive effect on soda sales, according to Scala and Menger:

Even when it was sunny but cooler, more sodas were sold than when it was overcast and warmer. Incorporating weather in future campaigns could boost the sales results even further – something that we have yet to test. The influence of a dynamic factor — sunshine — underscores that the optimization of digital messaging is an ongoing process, rather than a one-time procedure. It is vital to continuously record and analyze all available data, and to use the results to optimize the digital content in an ever-changing environment.

Because of the lift in sales tied to the tests, Panos can justify existing and future investments in digital menu boards. This case also shows that even subtle changes in the digital marketing strategy can have a big impact.

"Achieving a sales lift of more than 7 percent on soft drinks – a product group with a high profit margin – is a powerful testimony that even a single screen at each location can make a huge difference when optimized," Prime Products Director Guy Van Ginderen said in the Scala case study of the deployment. "This quick service restaurant chain is now marketing to its franchisees the opportunity of going all digital."

About Christopher Hall

---

None

Connect with Christopher: