About 5-years ago, I presented a white-paper to several large grocery retailers in the US outlining where several technologies were merging to create a “new and improved” shopping experience.

I recently re-read the white-paper and have scratched my head since wondering why adoption of new technology is so slow in certain industry sectors. Could it be that grocery retail is based on such an old business model (location + inventory = success) that technology cannot add anything? This is not true when it comes to grocery retail stores and Point of Sale (POS) systems (scanning, real-time inventory tracking and supply chain management). Another important factor with any business is marketing (duh!). And this is where digital signage comes in. We know that we can increase sales and reduce cost with digital signage. And we know that an integrated digital signage marketing solution would work. I have added the white-paper below.

 

My comments and updates are added with quotation marks

 

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DIGITAL SIGNAGE FOR GROCERY STORES
BEST PRACTICES WHITE-PAPER

Contents:
Introduction
Business model – broadcast vs. narrowcast
Effective content
Environment planning (Display placement)
Media planning
Summary

Introduction
From its infancy in the early 1990s, digital signage has matured into a widely accepted business solution. With cloud computing, low hardware costs and proven business models, digital signage is growing. However, many mistakes are still being made, especially in the retail/grocery industry. This best practices white-paper addresses the most common mistakes and how to prevent them.

Business model – broadcast vs. narrowcast
In the early days of digital signage, WalMart and Tesco were two retailers that invested heavily in digital signage…and failed. The main reason for failing was choosing a broadcast model instead of a narrowcast model. Both companies have revised their models (see editor’s note on the last page).

Broadcast Model:
With a traditional broadcast model, the idea was to send TV commercials to all displays in a store and get a ROI by capturing a percentage of the TV advertising market. Some retailers believed they could “steal” a percentage of TV broadcast advertising market by replicating it in-store. Why it fails:

• First, a broadcast model is based on external advertising revenue.

• Second, a 30-second TV commercial is too long for a fast-paced shopping environment and therefore does not capture or connect with a customer in a store. The environment is too different. The benefit of watching a TV commercial from the comforts of your home is that it finances your favorite TV show. So, with nobody watching the ads in a store, advertisers do not get a ROI they expect and leave.

 

With the attention of shoppers getting shorter year by year, we have found that an 8-second ad is ideal to capture impressions. Some of our stores show impressions as low as 2.6 seconds, but it is impossible to communicate anything (without shouting and appearing rude) in that time.

 

• Third, if a TV commercial is not relevant, compelling or engaging and does not help or enhance the customer experience, it will fail. With a negative effect on the customer, this business model cannot be successful. Tesco learnt this the hard way and had to reduce their rate card by 30%, fire their media buyer (JCDecaux) and start over again with a narrowcast model. Tesco now has several targeted advertising zones (Health & Beauty, Home Entertainment, Beers, wine & spirits, Produce and Bakery).

Narrowcast Model:
With a narrowcast model, a store is divided up in zones with short, targeted messages that connect directly with the customer at the location they are most receptive. In other words, if you advertise meat in cosmetics, it most likely will not trigger a buying response.

Revenue is generated by increasing store sales (in-store brands with high profit margins being the most profitable), cross-selling or up-selling products in a zone, dynamically managing inventory such as perishable items, connecting with the community and allocating a small part of the advertising loop to relevant external advertisers.

The narrowcast model is often called Experiential Marketing which is defined as using compelling messages to emotionally connect the customer to a brand. Experiential Marketing is also called ERM (Effective Relevant Marketing) or REM (Relevance Engagement Measurability). In short, content is created to be relevant and compelling to engage and influence customer behavior and enhance the shopping experience. Context and Proximity are two of the most important concepts to keep in mind to make a narrowcasting model successful.

 

Narrowcasting can still be too broad. Shoppers expect a “customized experience” and even a targeted message in a specific store location can be too vague. We use optical sensors to trigger advertising messages based on gender and age, making the messages more relevant for the individual shopper.

 

• Context means “to weave together” and in relation to digital signage it means creating messages that intercept, educate and engage the customer in the retail environment. An example would be the knowledge that people want healthy cereal. A digital screen in the cereal section of the store would promote a healthy cereal product containing whole wheat which lowers cholesterol. Cross-selling call-to-action messages such as, “Try our healthy organic milk today” would be an example of good context.

 

It seems like “nudge marketing” is the most effective way to push product sales. Nudge marketing is compelling consumers to behave in a desired manner by “nudging” them with a balanced marketing message, not too soft and subtle nor too heavy handed and forceful.

 

• Proximity means “closeness” and refers to a message’s distance from the product or service. For advertising or promotional campaigns with sales-lift objectives, the display with a promotional message must be in close proximity to the product to be effective. When it comes to consumer behavior, it is simply a matter of context and convenience. If the message is relevant and the product is close, more customers will buy the product.

• Know your customer. It cannot be stressed enough the importance of knowing your customer. As we all know, assumptions can be dangerous. Only by knowing your customer can you create effective messaging that will help you reach your objective. How many customers are shoppers or buyers? This information is important because a shopper most likely has a list and a plan and is not easily influenced. A shopper, according to research, buys 70% of products on impulse and can therefore easily be influenced by digital signage messages.

 

I am still amazed when a client says, “We had somebody do a demographic study 6-months ago so we absolutely know our customer.” Usually the study is an after-thought with no specific goal in mind. To know your customers you need specifics. For example, how many 16 to 24 year olds respond to your advertising? Demographic studies need to be backed up with surveys and passive sensors to learn your customer’s needs and behavior!

 

Effective content:
It has been said about digital signage that content is King and that context is King Kong. Here are some things to keep in mind when creating content for digital signage grocery networks.

• Communicate your message in 8-seconds or less. A standard setup for promoting a brand is a message with 4 parts:
2-second brand/product identification
2-second “emotional” or “call-to-action” statement
2-second “value” or “offer” or “sale” message
2-second repeat of the brand/product identification

Call-to-action:
Examples of effective call-to-action words are: “Did you know?”, “On Sale”, “50% off” “Try now” or “Buy now”.

 

Online marketers are very good with their ad-copy and call-to-action words to make people click their ads. While online marketers can track each individual impression and click, digital signage does not have the same accuracy…yet. We can track impressions with cameras and we can track product stock keeping units (SKUs). We can also track the customer’s path through the store. So, if a shopper sees an ad (impression captured), puts the product in the basket and checks out (logged), we can assume that the purchase is done based on the digital signage ad. Here are some good examples of effective, online ad copy:

 

Combine call-to-action words with targeted keywords:
Buy Camping Gear On Sale Today!
Download Accounting Software Now.
Triple Business ROI w/ these Tips.
*keyword underlinedCombine call-to-action words with promotion or offer:
Save 25% When You Buy Today!
Plan Dream Vacation Cheap & Easy.
Redeem Coupon & Save $50 Now!
*promo underlined

Combine call-to-action words with urgency:
Subscribe Now! Offer Ending Soon.
Sign Up Before It’s Too Late!
Only 3 Days Left. Register Now!

 

Branding and editorials:
After each advertising message, a 5-second branded message should be inserted e.g. “Brand-name – Quality you can afford” or a branded 10-second editorial content piece created by your Marketing or Public Relations department to create customer loyalty.

Repurposing content:
Effective content should also be generated by repurposing existing content and creating synergy between the website, email promotions, monthly newsletter, print ads, loyalty programs, coupons etc.

Length of loop:
A typical playlist or “loop” for a zone will be around 4.5 minutes (270 seconds) based on the customer tracking data for your store. This means that you can have 34 messages for that zone or 24 messages and 8 editorials. The optimal mix of messages, store branding and editorials will have to be tested. Each store and each zone could be different.

 

We now recommend the loop to be no longer than 2-minutes. With 8-second ads, you can fit 15 ad-spots. However, content should be mixed with company branding, opening times, weather, relevant news, community messaging, short editorials etc. A good mix seems to be 10-ads and 5-branding messages.

 

Fresh content:
Content should be kept fresh and updated so a customer does not see the same messages on every visit to the store. It is therefore very important to create several versions of the same message. The update schedule should be based on a person’s average visits in a week. If most customers shop once a week, messages should be updated once a week.

 

This is often a challenge for our clients. Once the first advertising loop has been published, it is not updated regularly. Keep in mind that a message gets less effective as it is seen multiple time. Something new is always more interesting than something old, unless you are an archeologist. After 3 times, a shopper will not react to an ad.

 

Brand loyalty:
An interesting fact about brands is that most people are not generally attached to them. With digital signage, this is an opportunity to promote in-store brands. If you ask a group of people to list 5 grocery store items they will need this week, most will list milk, egg, bread, orange juice and vegetables. If you ask them to add a brand to the products, most of them cannot. Since most people are not loyal to brands, promoting brands with digital signage will increase brand loyalty. From an ROI standpoint, why not promote the more profitable in-store brands?

Environment planning (Display placement):
Many businesses do not pay attention to display placement in the store. Both WalMart and Tesco placed displays 10-feet and higher off the ground. Customers would have to look up to see the information and this proved to be a major negative factor. Display placements together with a broadcast model are the two most important factors causing the system to fail. Context also applies to display placement. One must ask, “What is the purpose of this screen?” “Will it be visible to the target group?” There are 3 factors that make or break a digital signage system:

1. Screen placement and visibility
2. Attention getting content with motion that engages customers
3. Influential messaging with a call to action

There is a common sense approach to screen placement but it should be backed up by customer research. Again, assumptions can be fatal. A digital signage display should be placed where it helps the customer. If it is placed so it is not relevant to the promotion or inconvenient for the customer, it will not work. It has been proven that displays cleverly integrated into the isles and end-caps are more effective than displays simply mounted in the ceiling. Again, keep context in mind.

Media planning:
Every organization is different. Therefore, different processes must be developed and implemented to ensure effective communication and work-flows. As a part of media planning, an effective work-flow must be developed between the different departments. From idea, to production, final product and updates, a streamlined work process will ensure a successful digital signage network. How will these departments work together when creating a campaign, repurposing, producing or updating content? Who will be in charge of the different processes?

 

Grocery stores continuously fight competitor pricing. We have several clients that have at least one person dedicated to checking daily online and newspaper ads. They get up very early in the morning. Digital signage is an ideal tool to respond and present counter-offers immediately, saving both time and resources.

 

Summary:
After reading this short white-paper you will know that choosing the right business model, creating the right content, placing the displays correctly, conducting customer research and creating effective work-flow processes for your organization will determine the success of a digital signage network. Instead of just pointing out what not to do, here is a summary list of things to do:

1. Know your customer:
Conduct surveys, interviews, focus groups, analyze customer tracking- and POS data

2. Choose the right business model:
Narrowcasting with zones is the most effective model for retail

3. Produce effective content
Know what content will help your customer (engage, influence, relevance, context)

4. Find the right screen placement
Make sure the displays are visible and relevant to the zone

5. Create and revise work-flow processes
Develop an effective work-flow for your organization

6 Measure success
Create Key Performance Measures (KPMs) to determine success

Editor’s Note:

Tesco
It is important to take a look at Tesco’s initial implementation of digital signage and the mistakes that were made. Screens were placed too high and several audio streams were reported to be heard by customers at any location in the store. There was no proximity between the displays, messages and products. The messages were reportedly too long. Most of the ads were 30-second TV commercial that did not relate to the customer in the store. The content loops were also reported to be repetitive, there was no context and there was no call-to-action in the messages. The content at Tesco’s check-out displays promoted products in the store which proved very impractical for customer checking out. Store branding and editorial content would be more effective to reduce the perceived wait time at checkout. All of this could have been prevented by conducting basic consumer research.

 

There is a “common sense” approach to digital signage. The most important thing to keep in mind is that digital signage is a communication tool. Then, what are you trying to accomplish? Enhance branding, increase sales, improve communication or all of the above? How will you do that with content? How will you target your customers to get results? How will you measure results? What is your expected ROI? We can find the answers to that, but believing that just installing a digital signage system with an advertising loop will not work long term! A digital signage system requires continuous work.

 

WalMart
WalMart has revised its digital signage broadcast model with a narrowcasting model in its Canadian stores. A virtual character called Lisa and her animated family appears in 30-second slots alongside advertising, store-specific announcements and local information. There are 20 LCD screens in each store, in 42-inch and 48-inch formats. Although the characters do not currently endorse specific products, the intention is for Lisa to eventually promote items in designated zones in each store. It is too early to evaluate what effect Lisa and her virtual family is having on sales and product recall. However, the digital-signage network in general has been boosting sales on some advertised products up to 17 percent.

Target
Target’s digital signage network called “Channel Red” and Mark Bennett, the executive producer and group manager for media production, has published a list about what they have learned from their network.

General guidelines
1. When it comes to content, shorter is better. Make sure to keep it simple.
2. Use sound only for enhancement, never to “drive” the spot/message.
3. Always include a call to action — what you want the guest to do.
4. Content needs to be specifically created for the in-store medium.
5. Have a strong technical tool box: understand what you have available for segmentation, demographics, etc. so you can build a better show.
6. Establish clear objectives early: the key is to designate someone to think strategically and always keep an eye on the “big picture.”
7. Always keep your refresh budget in mind: Stretch it out by creating multiple versions of each spot.
8. Use branded interstitials to keep the show fresh and surprise and delight guests.
9. Integrate digital signage into the media mix: if a vendor wants a spot on the show, find out “where” they are (e.g. mobile, online, end cap), and place the content accordingly.
10. Understand vendor expectations: Work according to the vendor’s goals (e.g. driving traffic to end caps vs. brand building).
11. Ask for vendor feedback: regularly ask how to make the network better.
12. Challenge vendors to provide good content: Target can and will refuse content if it doesn’t meet quality standards.
13. Leverage other marketing vehicles, be it mobile, online, end cap, etc.
14. Content shouldn’t be an afterthought.
15. Know your audience.
16. Use flexible content.
17. Don’t be complacent.
18. Network with your peers.

Research Model:
In a study by Dr. J. Jeffrey Inman and Dr. Russell S. Winer, a model that details “the process by which consumers make in-store decisions” was created. Their research advanced a four-stage model for in-store decision-making, and the factors and relative importance thereof on the consumer impact of unplanned in-store purchases. Interestingly, their model is reflective of the consumer buying processes advanced by other researchers. The four-stage process of the Inman and Winer model for measuring in-store decision-making is as follows:

1. Exposure to Categories and Displays (which is impacted by the trip type, the number of aisles shopped, display type and location, and purchase involvement).

2. Motivation to Process In-Store Stimuli (including deal proneness, age, and the need for cognition—that is, the influence of a message on a consumer’s decision-making process).

3. Planning (use of a shopping list, shopping trips per week and deal proneness).

4. Need Recognition (compulsiveness, gender, household size, shopping party size, and income).

From this model, the researchers performed an analysis and ranking of the strength of influence of the noted factors. In the following list the results are presented, as reported by Inman and Winer, which rank from most to least the relative factors’ impact on consumer in-store purchase decision-making.

Effect Size on In-Store Decision-Making by Factor Type:
1. Number of aisles shopped
2. Trip type
3. Deal proneness
4. Household size
5. Trips per week
6. Age
7. Shopping party size
8. Compulsiveness
9. Gender
10. Purchase involvement AND income (Tied)
11. Need for cognition
12. Use of a list AND feature proneness (Tied)
13. Display Type

 

Currently, most of these factors can be automated with software and sensors. With customer traffic tracking, demographic sensors, advertising triggers, online shopping list (synchronized with your app), indoor-wayfinding, POS integration and advanced analytics, you can build a profile and customize the shopping experience for an individual shopper.

 

This indicates that the number of aisles shopped, trip type and deal proneness are more important factors influencing in-store purchase decision-making than, for example, the use of a shopping list. These findings are significant when considering digital signage as an in-store medium. This is because digital signage is unique in its ability to leverage many of these factors into tailored messages to convert shoppers into buyers. Stated another way, digital signage content can easily be geared to impact those factors found to have the most effect on consumer in-store decision-making.

For instance, the most important influence on in-store purchase decisions was found to be the number of aisles shopped. Thus, creative content geared toward encouraging consumers to visit more parts of the store can increase retail sales. To illustrate, an ad that introduces, “Buy peanut butter here, and get 50% off jelly located in Aisle 21,” may be an effective way to augment the number of aisles shopped. If this content is not, in fact, producing the desired result, it can easily and quickly be altered to find the most effective messages. Way-finding and localized information can also be employed to move shoppers around the store, i.e., “The local Little League baseball team won the big game, be sure your kids have balls and bats, located in Aisle 24.” As a result of its flexibility, digital signage is the only in-store medium that can be instantly updated to account for various environmental factors while tailoring messages to impact in-store decision-making.

 

We often hear marketing managers say, “If you throw enough mud [they usually say S#!T] at the wall, some of it will eventually stick,” when describing their marketing efforts. Another analogy would be preferring carpet-bombing to sniping. With digital signage, we explain patiently, we can give you instant feedback about what sticks. By comparing impressions of the SKUs viewed on the screens with the POS’ SKUs purchased that hour, we can tell you what message works. We can do this in real-time and display the data on a dashboard that runs on your computer, tablet or smartphone. Instant feedback, easy access to valuable info. However, the adoption rate of this technology is painfully slow. Maybe it is more fun throwing mud at the wall?

 

The effective allocation of in-store marketing dollars among competing media needs to be considered by brands. Retailers should run content that most effectively impacts consumer in-store decision-making to increase sales. Digital signage content may be created that seeks to influence in-store decision making. A fill-in shopping trip can be converted to a more lucrative trip, for example, by targeting promotional messaging to areas of a store where consumers tend to make fill-in visits, such as the milk area. Such pinpointed messages can have an outsized influence on sales. While digital signage messages cannot affect all factors that impact in-store purchases, such as household size, creative content can have an influence on many of these factors. Both brands and retailers can benefit from such a content focus.

The future of digital signage
To avoid ridicule, it has been said that one should not try to predict anything that could happen in one’s own lifetime. However, there are certain things we can predict with digital signage based on what we know about recent technological advances: integration, interactivity, wireless and social networking. The digital signage network of the future will most likely identify the customer directly and provide advice based on the shopper’s profile. Your digital environment will respond to you. Microsoft is developing an interactive “smart” shopping cart that stores your shopping list and helps you with your shopping. If you are wondering about a price, you bring the product to the screen, and price and other information is displayed. Did you forget something on your list or would you like a recommendation for a complementary product, the smart-cart is always ready to give advice. Furthermore, mobile devices can unobtrusively be used to receive messages from the store via Bluetooth (called BlueCasting) if you choose to. SMS Marketing systems can also be integrated with digital signage displays to update you on the things you may need. Radio frequency identification chips (RFID) are soon so cost effective they can be placed on any product and every shopping cart, tracking where you go and what you buy. The integration of these technologies could result in a truly customized shopping experience for you.

 

The future of digital signage has changed since I wrote the article. Everything has started centering around advanced analytics (to know your customer) sensor integration (infrared, optical, ibeacon, wifi, near-field communication (NFC), bluetooth etc.), augmented reality (adding value) and smartphone app integration (to measure customer behavior). For the last couple of years, we have worked on IntelliTrak [Intelligent Responsive Digital Signage] which is a digital signage solution that integrates online marketing, social media, smartphones, sensors, traffic tracking, analytics technologies…and the holy grail…POS data. The goal is to create a fully automated system that responds to the shopper in real-time, learning from what works. Ahem…digital signage artificial intelligence neural network anyone? Well, we’re working on it. Here are some of the key benefits of a responsive system:

1. Intelligent Responsive Digital Signage detects demographic- and shopping behavioral patterns and responds with appropriate, targeted advertising in real-time thereby influencing the shopper’s buying decisions more effectively than any other system2. Intelligent advertising improves the customer experience by showing relevant information to the individual shopper

3. By reducing the advertising clutter and improving the shopping experience, customer loyalty is increased

4. Automated intelligent digital signage requires very few resources to update, resulting in time and money saved

5. With real-time analytics, marketing campaign success can be determined in minutes, not weeks or months

6. Cloud-based analytics data can be accessed via handheld device or computer at any time, from anywhere. The client will be provided with an iPad with real-time statistics to create a greater awareness of the benefits of analytics.

7. By providing meaningful analytics, sales- and demographic information to vendors and store managers, better marketing decisions will be made, resulting in increased sales.

 

To learn more about the future of digital signage for the grocery industry, please contact me:

 

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Here is what you can expect when implementing a digital signage system properly:

 

With more than 30-million visitors annually, Harkins Theatres increased concession sales by 35%, eliminated print costs, received millions of dollars in co-op marketing discounts from vendors, earned significant revenue from running external advertising and improved the look-and-feel of the theatres.

 

NORVISION’s Intelligent Digital Signage system increased the sales of Budweiser’s Lime-A-Rita and Straw-Ber-Ita by 33% by triggering ads for females only.

 

The interactive video-wall NORVISION built for IO Datacenters generated $27M in sales from its debut.

 

Please leave your comments below.
I would love to hear your take on the future of digital signage.

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