May 24, 2016
By Nate Remmes
In recent years, the retail industry has focused significant efforts on achieving an ‘omni-channel’ presence, whereby it can offer a seamless, personalized shopping experience to all of its customers, whether they are connecting with them online, in a bricks-and-mortar store, through social media or over the phone. The key to creating such a personalized experience is learning who a customer is and recognizing him/her at the point of contact. While retailers—and many of the technology providers that support them—have been spending immense amounts of time and resources to figure out who their customers are, the digital signage display industry has lagged behind in terms of contributing to the omni-channel experience.
There has certainly been impressive growth within the digital signage industry, which at a global level is currently valued at $18 billion per year, including everything from the physical displays themselves to content management software and services to digital out-of-home (DOOH) advertising. According to market research firm IHS, the digital signage industry experienced a 10 per cent increase in revenue in 2015, a growth rate that is expected to continue through 2020.
While the industry has been somewhat late to embrace the omni-channel trend, it is at least fashionably late, taking time to evaluate technologies that have only recently emerged. These new technologies are focused on attribution (i.e. showing how ads affect consumers) and relevancy (i.e. proving those ads are reaching many people and are having an impact on the right type of consumers).
The following are some of the technologies that can help achieve attribution and relevancy goals through digital signage systems.
Camera sensors with facial algorithms
When digital signage is equipped with camera sensors and facial algorithm software, the technology can detect how many people are looking at a display at any given time. Today’s more sophisticated analytics applications can also capture customers’ reactions to product displays, in-store dwell times and traffic flow.
An in-store Bluetooth beacon emits signals and detects corresponding proprietary apps on customers’ mobile phones. Once it connects with an app, it is able to access all of the information stored therein about the customer.
Retailers can use this technology for many purposes. For one thing, they can use collected customer data to help improve the shopping experience and reduce wait times, e.g. by staffing cashiers based on the busiest times of the day.
With regard to digital signage, beacons allow marketing campaigns to become more personalized. Most commonly, this involves sending electronic coupons and other offers to the customer’s phone—but the industry is also starting to use the same beacon-based communications to change messages displayed on digital signage, so they are more relevant to the customers standing in front of the screen, in the hope of persuading them to buy something in the store.
Thus, retailers are installing and using in-store beacons not only to better understand their customers by collecting information, but also to increase profits by issuing a call to action based on that information. Further, studies show consumers are more likely to return to a store if they enjoyed the personalized nature of the shopping experience.
Indeed, digital-age marketing has proven most successful when it is based on personalized experiences. This is why in-store beacons are expected to become an increasingly common practice in the future for mainstream retailers.
Wireless-fidelity (Wi-Fi) technology has now led to ‘Li-Fi’ optical networks, which use light-emitting diodes (LEDs) to transmit information through the visible portion of the electromagnetic (EM) spectrum. For retailers, one particularly relevant application of this technology is to track customers’ movements within a store.
Li-Fi has much greater potential, however, as a ‘pipeline’ for all possible forms of data transfers from the store’s front-end POS systems. It could even be used to help synchronize data with a warehouse, check for required merchandise and place advance inventory requests. Savvy retailers have also considered the possibility of using Li-Fi to help direct their customers right from when they enter a store to the exact position of the merchandise they are seeking, through a combination of interactive touch screens, back-office co-ordination systems and/or customer services.
While these new technologies are certainly exciting, there will be substantial challenges in getting them all to work well together and create a seamless experience for customers.
It can certainly be intimidating to implement such systems in a way that will be scalable in the future and will support useful campaigns, rather than just creating a tangled technological mess. One of the main tricks with digital signage, for example, will be determining how to tailor a message to a single, targeted customer if multiple people are looking at a display at the same time.
The integration of these new technologies can also quickly become cumbersome to retailers’ own information technology (IT) departments. There is a new risk of interdepartmental friction if a retailer’s omni-channel strategy entails a number of departments—e.g. both marketing and IT—having jurisdiction over its digital signage displays.
Currently, the deployment of these technologies could be described as piecemeal at best. While digital signage itself is a relatively mature industry, the ‘rapid growth’ stage for the integration of omni-channel technologies is still roughly three to four years away. Complete integrations will be tested in big cities first, before spreading to smaller markets.
That said, some of the aforementioned applications have already proven highly influential. Fashion designer Rebecca Minkoff, for example, has done a good job of creating an immersive technological experience in her stores by installing interactive ‘digital mirrors,’ leading to three times the expected sales figures. Canada’s own Holt Renfrew has been a pioneer in using large-scale digital signage as an expressive canvas in its stores. And while Target failed in the Canadian market, some of its U.S. locations have successfully deployed in-store beacons to deliver the perks of online shopping to their customers.
A force to be reckoned with
In the final analysis, the purpose of omni-channel strategies is to create useful interactions with customers. With that in mind, the technology should ideally be connected to a retailer’s customer relationship management (CRM) and POS software. This way, identifying customers and sending relevant messages to them can make the collection of ‘big data’ immediately useful.
Today’s ‘millennial’ customers are already well-accustomed to providing their personal information in return for services that make their lives simpler. The rise of this generation’s purchasing power will help accelerate the adoption of omni-channel technologies.
As today’s and tomorrow’s customers continue to demand an ever-more personalized shopping experience, the integration of digital signage with highly interactive technologies and marketing platforms will create a new retail force to be reckoned with.
Nate Remmes is vice-president (VP) of corporate development for NanoLumens, which manufactures customized, thin, light, scalable and curved digital signage displays. For more information, visit www.nanolumens.com.
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