Canadian Retailer - May/June 2009 - (Page 41)

T E C H NOLOGY SIGNS OF THE TIMES Digital merchandising has been making steady progress in shops across the country for a number of years now. But boosters say it will only take off when retailers look beyond the screens and wires and make the effort to understand the true value of an in-store network. by pau l l i m a | w i t h f i l e s f rom m i tc h e l l brow n I n 2003, customers in Oakville, Ont., who visited their local Tim Hortons in search of a Boston creme and a double-double saw something a little different behind the doughnut racks — something that resembled the future of in-store merchandising. The restaurants were among the first in Canada to feature digital signage at the cash counter. With London, Ont.-based EK3 Technologies as its partner, Tim Hortons was dipping its toe into the world of digital merchandising, a catch-all term for the use of static and moving images on a computer monitor to highlight in-store specials, promote products, or relate other company information to the consumer at the point of sale. While Nick Prigioniero, president and CEO of EK3 Technologies, is not at liberty to discuss the specifics of the Tim Hortons experience, he notes with pride that the chain has since rolled out the technology to roughly 90% of its 3,000+ locations. “Our numbers are confidential, but if someone has invested in this network and they have been rolling it out for six years, then it has obviously been successful,” he said. Meanwhile, over at Sporting Life’s four locations in Toronto and Collingwood, Ont., you can still find print-based POS signage, but it’s clear that digital signage is making an impact on how the store connects with customers, says John Roe, Sporting Life’s director of marketing and advertising. “Digital point of sale is a better messaging tool, allowing us to communicate more effectively with our customers,” he said. “It makes our products stand out and makes our stores look better. It has also reduced the cost of designing and printing paper-based POS, which is a positive environmental factor.” In North America, out-of-home digital advertising (often referred to as “place-based media”) includes screens in public locations such as subway platforms, office tower elevators, malls and retail outlets. It currently accounts for about 4.5% of ad spending in Canada and it has grown at a steady clip since 2002. Vernonis Suhler Stevenson, a U.S.-based private equity firm, expects North American growth to continue from $7.9 billion in 2007 to $12.9 billion in 2012. The reason for the growth is simple: digital signage, particularly in a retail setting, is effective. According to InfoTrends, in-store digital signage increases brand awareness by almost 48%, increases the average purchase amount by 29.5%, creates a 32% upswing in overall sales volume and generates 33% growth in repeat buyers. And a Maritz study of the EK3 digital network in Walmart stores found 60% of shoppers agreed the network made their shopping trip more enjoyable, with anywhere from a 5% to 65% increase in goods sold due to advertising over the digital network. And as the evidence for digital merchandising’s effectiveness grows, the costs are shrinking: the prices of LCD and plasma television screens are dropping, as are the costs involved in network in- stallation, thanks in part to newer technology and the entry into the marketplace of more vendors offering in-store network services. And if those weren’t incentives enough, digital signage can also generate third-party revenue. Just as an example, Sporting Life sells third-party advertising on its interactive kiosks to provincial tourism agencies, car companies, mobile phone companies and other advertisers that want to reach the kind of customer who enjoys the sporting life. And, adds Roe, because the in-store kiosks are interactive, an advertiser like Tourism Alberta can run contests to win trips to Alberta and gauge the effectiveness of its ads. So, with all these benefits, why can’t you find television screens at every checkout in the land? As you might expect, it’s not an easy question to answer, but boosters of the technology say a lot of it has to do with the typical retailer’s reluctance to see beyond the hardware and start-up costs. “There are a lot of misconceptions out there,” says Prigioniero. “For example, there’s the idea that if you put up a digital screen, all you have to do is play a loop of content and it will generate instant ROI. In the beginning, it’s a novelty for your customers, but after a while it will just be visual wallpaper.The message has to be relevant and designed with your consumers in mind, keeping in mind how you engage them as particular times of the day.” That emphasis on the novelty of television screens in the store environment is probably why Prigioniero prefers the term “digital merchandising” over “digital signage,” placing the emphasis on the messages and the research behind the messages rather than on the sign itself.The right vendor, he says, will emphasize market research and content creation over the techcontinued on 42 P H OTO C O U R T E SY O F O N E S TO P M E D I A G R O U P www.retailcouncil.org/cdnretailer | M AY/J U N E 2 0 0 9 | C A N A D I A N R E TA I L E R | 41 http://www.retailcouncil.org/cdnretailer

Table of Contents for the Digital Edition of Canadian Retailer - May/June 2009

Canadian Retailer - May/June 2009
Contents
Publisher's Desk
Shop Talk
Come Together
Where Green Never Goes Out of Style
Practising What They Preach
When Times are Tough
How the West was Wowed
In Pursuit of a Well-Dressed West
Sporting a Bold New Look
Bigger and Better
Back to the Future
Revved for Success
The Questions Retailers Ask
Signs of the Times
Advertisers' Index
You Asked Us

Canadian Retailer - May/June 2009

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