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There have been many inventions over the past several decades that revolutionized how our societies function. Some of these inventions, although prevalent, have not been immediately noticed or cared about. Digital signage has been seamlessly integrated into modern society, in places from transportation to retail, with little recognition or concern from the average person.
Digital signage, the use of LCD, LED, or projection technology is ultimately used in retail to augment the customer’s in-store experience by displaying
- Digital images
Digital signage is used in retail for the benefit of internal communications with staff.
Now, you might have a basic understanding of digital signage and how it is used in retail, but there is still much to go over. Keep reading if you would like to learn more about the technology of digital signage, why digital signage is used in retail, and what effect digital signage has had on retail and, on a vaster scale, in society at large.
Why is Digital Signage Used in Retail?
As mentioned in the preceding section, digital signage is used in retail to augment or amplify the customer’s in-store experience. This is achieved by targeting five key facets of the customer’s in-store experience that can be enhanced. These facets are all included in the following list.
- Telling the Brand’s Story
- Entice Prospective Customers
- Engage the Customer
- Inform the Customer
- Upsell the Customer
There is also a crucial reason retail businesses use digital signage that does not directly have anything to do with the customer’s in-store experience. This reason is improving employee communications, which will also be covered in one of the subsequent sections.
Now, let’s take a closer look at each of these respective augmentations to the in-store experience to see how they are applied and how they function.
Telling the Brand’s Story
One of the most essential methods for attracting and retaining customers in retail is to build a solid, recognizable brand. This has been done through ad campaigns, customer service, and brand logos. Now, digital signage joins these methods as an effective means for telling a brand’s story.
This can be done in several ways, and it is important to note that digital signage is often, but not always, interactive. In telling a brand’s story, retailers tend to use digital signage in a non-interactive manner. For instance, Hollister Co. displays lived video footage and several edited music videos from Huntington Beach.
This footage is not storyboarded like many other examples of digital signage being used to tell a brand’s story is. Still, the footage is incredibly effective at telling Hollister Co.’s story. Customers know the type of clothing they will find at Hollister Co. just from watching this footage.
Additionally, this footage draws customers into the lifestyle brand that Hollister Co. emanates from.
Entice Prospective Customers
Perhaps the primary motive for retailers incorporating digital signage in their store is to drive potential customers into the store. Digital signage has been observed to be an incredibly effective method for attracting attention. LED signs average roughly 1000 impressions per $0.15, which is an impressive rate over 33 times greater than that of radio ads.
Digital signage achieves this impression rate by optimizing its visual attractiveness to human perception. For one, digital displays are more consistently visible than static signage when exposed to direct sunlight. Additionally, digital displays tend to feature moving images or videos. This movement draws attention far more effectively than a static image can.
These digital displays tend to be located near the windows or entrance of a retail store and consist of information pertaining to the next three sections.
Engage the Customer
One of the primary purposes of using digital signage in a retail store is to engage the customer. This could mean anything from marketing the social media accounts of the brand to the customer to simply entertaining the customer during their visit. This facet of the in-store experience has room for creativity, so there are several methods for engaging the customer.
Some retailers will repurpose their brand’s social media content through digital signage. This effectively markets the brand’s social media accounts while entertaining the customer with social media content.
Some retailers will feature videos, news, or other various forms of entertainment on their digital signage to keep customers engaged during their visit.
Finally, there are some retailers that are using interactive digital displays to take the next step in engaging their customers. For instance, Nordstrom offers the “Denim Doctor,” a display that uses 360-degree imaging and intelligent programming to recommend the best jeans for various body types, lifestyles, and fabric preferences.
Rebecca Minkoff has taken it to the next level with their “Smart Mirrors,” which allow their customers to order additional clothes to their dressing room and even adjust the room’s lighting.
Inform the Customer
In addition to entertaining the customer, these digital displays can also serve to inform the customer. In retail stores, digital signage frequently includes information regarding the quality of their products, how they are ethically sourced, and what kind of effect owning the product could have on one’s life.
Additionally, retailers can also use digital signage to catalog their products, making it easy to search for and locate an item within the array of products one might find at a typical retail store.
This is something that greatly benefits retailers as well as customers, as a 2012 survey conducted by Accenture indicated that 92% of people believe that real-time product availability would influence where they shop.
Upsell the Customer
Finally, this information and engagement can be combined to upsell the customer on products that may be more suited to their interests or desires.
On that same 2012 Accenture survey, 49% of people surveyed claimed to be influenced by in-store offers. These in-store offers include basic promotional displays and sales representatives.
However, digital signage has been proven to be a mark above traditional methods of signage. Digital signage essentially serves as its own form of sales representative, as it can be used to inform the customer but also to direct the customer toward optimal sales for the retailer.
Digital signs can be constantly updated as well, so during summer or winter sales, the signs can simply be updated to reflect the optimal products for the season.
Improve Employee Communications
Although this does not directly affect the customer’s in-store experience, another great use for digital signage in retail stores is to improve the internal communications of the retailer.
For instance, if new information has been produced from the corporate offices of a retailer, it can be not easy to get that information looked at by every employee of the company.
A simple way to maximize the amount the information gets looked over is to create a digital display containing the information. Therefore, when employees walk by or are in the vicinity of the digital display, their attention will be drawn to the information on the screen.
This information can be constantly updated and applied to multiple digital displays to increase its effectiveness. Additionally, employees are far more likely to read the information on a digital display than in a pamphlet or staff board notices.
How Has Digital Signage Impacted the Retail Industry?
Now that we know what digital signage is capable of let’s take a look at how it has impacted the world since its nascency. In the preceding sections, it was stressed that digital signage plays a vital role in augmenting the in-store experience for the customer and the effectiveness of communication between employees.
Let’s take a look at exactly how much it does impact either of these things.
|Type of Impact||Little||Moderate||Important||Essential|
This information was compiled from a survey taken by a 2019 Future Stores and HR Retail Report.
The people surveyed for all three of these rows were all retail leaders in charge of in-store environments. Their seniority ranged from manager all the way to vice president.
As is evident from this table, the vast majority of retail leaders in charge of in-store environments believe digital signage to be important or essential to the in-store experience, employee communication and training, and, ultimately, the experience of the customer.
This is ultimately due to the positive correlation digital signage has had with improving retail sales.
Although correlation does not necessarily equal causation, it is fair to attribute some of these rising retail sales to digital signage when observing the measurable impact digital signage has had on customer behavior and satisfaction.
Here are some additional statistics that point to the effect that digital signage has had on customers’ behavior and, in turn, retail sales.
- 86% of retailers who installed new LED signs observed new customers enter the store
- 83% of these retailers who installed new LED signs also observed an uptick in sales
- Customers are prone to browse up to 30% longer when in a retail store with digital signage
- Customers waiting in line reported a 35% decrease in perceived waiting time when presented with digital signage to observe and interact with while inline
- At the point of sale, digital signage advertising increased sales by 30% for the advertised brands
- LED signs can offer a return on investment in as little as three months, according to a University of Cincinnati study
- The SBA reported LED signs leading to up to 150% increases in business
- A Nielsen study found that over 55% of travelers that noticed a digital sign could recall the exact message on the screen
With all of these statistics in mind, it is hard to believe that any retail business would choose not to incorporate digital signage into their brick-and-mortar stores.
The Drawbacks to Digital Signage in Retail
Although digital signage does have a plethora of benefits to its usage, there are several drawbacks that have made retail owners hesitant to incorporate digital signage into their respective businesses. These drawbacks can essentially be narrowed down to three main points.
- Cost of Digital Signage
- Frequency of Customer Interaction with Digital Signage
- Ability to Position Digital Signage Within Stores
Let’s take a closer look at each drawback associated with implementing digital signage in a retail business.
Cost of Digital Signage
Digital signage, although not nearly the most expensive method for advertising a product, is still a notable cost, especially for something that cannot be sold and does not leave the confines of the brick-and-mortar store. Retail business owners tend to be fairly split as to whether the costs of a digital sign or multiple digital signs are worth the benefits that they could receive.
|Price Point||Any Price||$1,000-$5,000||$5,000-$25,000||$25,000-$100,000||$100,000+|
|Cost/Benefit Analysis||3% believe the costs outweigh the benefits||10% more believe the costs outweigh the benefits||50% more believe the costs outweigh the benefits||34% more believe the costs outweigh the benefits||3% more believe the costs outweigh the benefits|
This data was compiled by a survey taken by WBResearch.
As is evident from the table, although most retail business owners believe digital signage implementation under $5,000 is generally worth the cost, beyond that $5,000 price point, the costs start to outweigh the benefits.
Frequency of Customer Interaction with Digital Signage
Digital signage does attract customers’ attention at a higher rate than static signage. However, some retail business owners complain that their customers do not notice or interact with their digital signage enough to warrant the cost of purchasing the digital signage.
Here are some of the various concerns that retail business owners have had with digital signage, including the infrequency of customer interaction with digital signage.
|Issue||Customers Ignore/Don’t Interact||Intrusive to/Frustrates Customers||Run out of Uses||Expensive||Poor Programming||Doesn’t Look Good||None|
|% Agree||61% agree with this issue||56% agree with this issue||37% agree with this issue||30% agree with this issue||25% agree with this issue||11% agree with this issue||1% agree with this issue|
This data was compiled by a survey taken by WBResearch.
As is evident from the table, the main concerns that retail business owners have with implementing digital signage are concerning its efficacy in getting customers to interact or even notice the signage. Additionally, many retail business owners worry that digital signage may feel intrusive and even frustrate certain customers.
Ability to Position Digital Signage Within Stores
Although not the overbearing issue that retail business owners have with digital signage, one issue that can arise with particular stores is its ability to be physically incorporated into a store. This could be due to limitations in space or clashing with the store’s interior design or style.
Here are some of the issues that retail business owners have run into in regard to positioning their digital signage, as well as some other issues that tend to arise with digital signage.
|Issue||Adapting Content to Customer Behavior||Can’t Automate Content||Choosing the Right Type of Content||In-Store Placement||Not Enough Media Content||Lack of Talent for Media Content||None|
|% Agree||33% agree with this issue||18% agree with this issue||14% agree with this issue||11% agree with this issue||10% agree with this issue||3% agree with this issue||11% agree with this issue|
This data was compiled by a survey taken by WBResearch.
As is evident by the table, most retail business owners struggle with adapting their digital signage content to the behavior of their customers. Additionally, factors like automating the Content, choosing the right type of Content, and producing media content for the digital signs can all negatively impact a retailer’s ability to implement digital signage in their store.
Digital Signage Outside of Retail
This article has covered the details of how digital signage is used in retail, but it has only scratched the surface regarding what digital signage actually does. A good place to start is in defining signage.
Signage is a broad term, popularized in the mid to late 1970s, that encompasses any signs or symbols used to convey a message. Signage can include road signs, billboards, street name signs, murals, posters, and many more examples. Now, these examples include digital and electronic signs with the invention of digital signage.
Digital signage is a branch of signage that uses LCD, LED, or projection technologies to display Content that tends to defy the confines of static signage. These can include displays such as videos, interactive media, weather data, and many more examples that would not have been possible with static signage.
By the conclusion of this article, you should have a basic understanding of digital signage and how it is used in retail. Additionally, you should understand a bit more regarding the technology of digital signage, why digital signage is used in retail, and what effect digital signage has had on retail and, on a vaster scale, in society at large.
Ultimately, the best way to understand is to go out to a retail store right now and see how prevalent digital signage has become.