Drinking from a digital signage firehose at Retail's BIG Show
By Lyle Bunn, BUNN Co.
When 35,000 people attended the National Retail Federation retail's BIG Show 2015 in New York City, the busy conference and trade floor were all about "digital." Delegates had a buffet of options to make multichannel happen — along with its imperative omnichannel, the integration of multiple channels to create a customer experience expressed consistently at various touchpoints.
"Bricks are the new Black," declared Bill Simon, former president and CEO of Walmart U.S., in noting that e-commerce is peaking because it lacks the sensory experience of shopping and the immediacy that in-store buying provides, while describing that online mirrors the previous paradigm of catalogue shopping.
"Brick-and-mortar stores are at the emotional and financial center of retail," said Bal Dale of JDA Software, a primary provider of retail application systems.
And Levi Strauss & Co. EVP James Curleigh, president of the Levi's Brand, reflected the thoughts of many delegates in saying, "Stores are at the heart of the shopping journey, impulse buying as well as semiplanned and wish-list purchasing. The key is more productive stores, and technology is the tool that needs to be applied to reinforce the brand and the purchase experience."
Some important announcements and key insights related to digital signage were offered during NRF15:
The 12th annual Store Systems Study by NRF, IHL Group and Retail Information System News reported on its survey of digital investment trends by the largest retailers. Sixty-five percent of respondents have revenues exceeding $1 billion annually, with 16 percent between $500 million and $1 billion and 19 percent under $500 million. Vendor opportunities exist as store count increases by 3.2 percent and remodels increase by 3.1 percent. In a 1,000-store chain, this means that digital signage can easily be designed into the store experience for 60 new and remodeled locations annually.
In-store digital budgets (the typical source of digital signage trial/innovation) will increase between 2.6 percent and 3.8 percent for large retailers. Digital signage is the second-largest area of planned investment, with 29 percent of large retailers increasing their spends in this area, following only payment terminals, in which 49 percent will increase their investment. Twelve percent will buy in the 12- to 24-month timeframe, and a further 8 percent indicate investment plans 24-36 months from now. Thirty-one percent of specialty retailers said they will make a digital signage purchase in 2015. The study reflects that the deployment timeframes on enabling technologies such as point-of-sale, mobile devices, inventory visibility and analytics software ranges from 10 to 11 months after purchase.
Thirty-four percent of respondents to a Shop.org/Forester 2015 survey said that merchandising was one of their top three priorities after mobile at 58 percent, omnichannel at 45 percent and marketing optimization at 38 percent.
"I used to say, 'Don't bring me a solution that is looking for a problem,'" said Michelle Garvey, CIO of ANN Inc., the parent Company of the Ann Taylor and LOFT brands, "but digital is moving so fast that it now makes sense to have some funds in reserve that can be used for testing approaches that would appear to provide value." She added that "during testing the intention should be to assess possible value at minimal time and investment. Then, based on merit, project budgeting can be provided for that initiative over other options."
Digital signage providers at NRF15:
STRATACACHE had a dominant trade show floor presence from a digital signage standpoint in hosting a digital media pavilion area and a presentation by Canadian sporting goods chain SportChek on digital merchandising. The Intel, Hughes, Avnet, Toshiba, NEC, Scala, ComQi and Four Winds booths were also constantly busy.
Samsung, LG Innotek, Wincor Nixdorf, Displaydata and others promoted electronic shelf labels using e-ink, with LG Innotek being the only ESL provider to display a small-form shelf-level video display as part of it ESL offering.
Lexmark used NRF15 to announce its digital signage offering that extends its Publishing Platform for Retail offering based on AccessVia. Message composition and presentation on digital displays is based on the AccessVia authoring and management platform for in-store static printing.
Also, a Dynamic Media in Retail guidebook released by BUNN and downloaded by 1,400 people during NRF15 describes the way that place-based messaging can address the challenges of in-store branding, merchandising and improved ambiance, each of which were referenced as areas of retail challenge.
Analytics were part of every presentation, as retailers wrestle with swimming in a sea of data, while trying to derive insights and actionable intelligence within the multichannel environment toward more fully integrated omnichannel and a more personalized shopping experience.
"We are seeing, and it can be further expected, that an upgraded merchandising approach will also deliver new metrics that, until digital merchandising, have not been relevant," noted Thomas Opdycke, CEO of DS-IQ, adding, "Digital media supports the math model of retail, and that personalization of messaging is just being respectful of patrons."
The purchase journey was another key topic. "The role of the store is to activate relationships," said Tony Bartel, CEO of GameStop, which uses digital extensively in generating $9 billion in annual revenue through 6,600 stores. "The Store is where the magic happens."
Paul Reid, VP of operations for SportChek parent FGL Sports, echoed this in presenting how "in focusing on the in-store experience we have been able to double performance through digitally-enabled stores."
"We realize that we are competing with and have to align with the experiences of entertainment, increase the importance of destination and improve our places with ambience," he said. The SportChek success is based on the quality of in-store experience, bringing more chances for engagement, targeting suggestive selling through data and seamless integration of in-store and .com.
Alison Kenny Paul, vice chairman and U.S. retail and distribution leader at Deloitte, told delegates, "Channels will disappear because that is not how consumers behave. They regularly cross over, making journey tracking and attribution very difficult."
In providing a list of digitals "Do's," Paul advised:
- One digital strategy does not fit all products or locations or store format. For example, digital has twice the shopper influence in electronics stores over general retail;
- Digital must serve customers' needs at the moment and place of purchase; and
- Branding must be consistent throughout the in-store, online and mobile shopping experience.
Tim Tang, director of vertical solutions at Hughes Network Systems, reflected the sentiment of digital media expressed by many at NRF15 in saying, "Place-based media activates in-store purchase and can be attributed to that conversion."
The complexity of the purchase journey that includes online and mobile means that the retailer must gain the sale in-store and can up-sell and cross-sell while adding to the experience through the digital display medium.
Marketing investment decisions are becoming more difficult to make, so a medium that makes sales happen is key to success. An attribution model that discerns the value of applying any specific marketing device is the next plateau. Retailers' understanding of their patron's path to purchase and their insights related to traffic and conversion serve as the basis for investment.
Lyle Bunn is an analyst, advisor and educator in North America's digital media industry. He has received numerous industry recognitions, has published more than 300 articles and guides, and has helped to train more than 10,000 media professionals. He can be reached at Lyle@LyleBunn.com.
Photo courtesy of the National Retail Federation.