A new report from Retail Systems Research in the U.S. provides a rare insight into the role that in-store digital signage can play from the retailer’s point of view, suggesting that the new medium’s potential is widely recognised even by those who have not yet deployed it, and emphasising the importance of co-operation between brands and retailers.

It will be required reading for many in the digital out-of-home sector for its close examination of the brand-retailer relationship and for conclusions that sometimes fly against conventional wisdom, such as the doubt it casts on the significance of mobile, and its caution against over-reliance on audience metrics as a means of extracting value from in-store media.

While stressing that it is still early days for the adoption of new in-store communications media, the report – “Enabling the Shopping Process: In-Store Marketing for the Empowered Consumer” – says that overall, the most successful retailers are already “more likely than peers to rely on technology-driven vehicles like digital signage and store-provided handhelds”.

Indeed, says RSR, 32 percent of the retailers it characterises as “winners” employ digital in-store media against just 17 percent of “laggards”.

But not all retailers can be winners, of course, so RSR asked: what in-store marketing tools are retailers in general using?

Unsurprisingly, promotions such as weekly sales topped the chart, employed by 86 percent. The most popular measure that could be classified as media was the use of  shelf talkers, at 49 percent, but “offers and advertising via digital in-store media” were used by 25 percent – perhaps a higher figure than many would expect.

The same quantity used floor graphics, while 19 percent had kiosks and 18 percent offered print-on-demand coupons.

However, it is striking that even those who are not using in-store media appreciate its potential. While only 28 percent of retailers identified “a single content-management system to enable common information assets across channels and media” as playing a major role today, 51 percent acknowledged that such a CMS would be a powerful addition to their marketing arsenal.

And the same ambitions were evident when RSR asked retailers about other tools and factors relating to in-store media.

Top of the POPs

Just 13 percent saw “technology to reach shoppers during the in-store shopping process” as playing a major part today, but 47 percent agreed it was very important. There was a similar disparity on “technology to reach shoppers as they enter the store”, which is a significant element of marketing for only 21 percent today, but nevertheless seen as valuable by 35 percent, and on “ad agencies and media buyers that understand the in-store environment”, currently a significant force for 23 percent but perceived as very desirable by 37 percent.

(The use of mobile technologies in-store may not take off as explosively as some expect, however. While mobile already plays a major role for 19 percent of retailers, only a few more – 24 percent – see great value, suggesting that the bulk of those likely to deploy have already done so.)

In short, RSR concludes, retailers want more effective and more personalised ways to reach their customers, but “the real challenge is how to get that tailored messaging into customers’ hands” – and the researcher stresses that the route to successful deployment of digital signage is not an easy one.

“Getting a co-ordinated, customer-centric in-store marketing platform in place to both promote product and elevate brand awareness is well-nigh impossible,” they warn, even though economic conditions are forcing more effective use of marketing budgets, with retailers impelled to differentiate and brands trying to reach customers nearer the point of purchase, at the same time as many long-established media routes to the consumer are diminishing in potency.

And in an ideal world, retailers and brand owners should collaborate on projects such as digital signage to spread the high cost, according to the report.

All together now

Indeed, says RSR, the benefits of brands and retailers working together aren’t just about effectiveness – they extend to financing the digital-signage project too.

“When retailers and brands collaborate on in-store marketing funding, the pool of funding is much larger,” the researcher says. “The retailer can be the third party that negotiates between multiple brands, and can design a solution that benefits multiple participants over the same investment. When the retailer has to go it alone, the capital requirements become a significant barrier.

“Not only does [a joint effort] yield a ‘best of both worlds’ collaboration that combines the wider market expertise of brand owners with retailers’ in-depth knowledge of their particular customer base, it also makes it more likely that you’ll get the level of funding needed to execute a quality in-store marketing strategy,” concludes the report.

And brands have often led the way on retail-marketing projects, according to RSR: “The thought leadership around tools for in-store marketing has clearly lived with brands, rather than with retailers themselves. We see more penetration in those retail stores where brand managers have a significant stake. On average, our respondents who are collaborating with brand managers, either driving the bus or as passengers, are more likely to use enablers actively in the store. This spans everything from more knowledgeable ad agencies, through targeted offers, and even through message optimisation.”

But should the brand be allowed to keep the upper hand? RSR suggests that it may in reality be the retailers who hold the most potential for innovation.

Shopping savvy

Because “brands typically have fewer tools in their arsenal for in-store communication with customers” – without heavy tech investment they’re limited to activities like demonstrations, coupons, and price promotions – “having a smaller toolset tends to put blinders around marketers when they contemplate which in-store marketing tools are possible. But as more shopping shifts online...when the retailer participates or leads in-store funding, they understand that responding to this information disadvantage in stores is critical to leading consumers to a purchase decision.

“Left to the manufacturer alone, in-store marketing efforts may become too one-dimensional, and miss the boat with consumers,” says RSR.

Retailers’ involvement should also be flexible from store to store, not constrained by head office, according to the report.

In the end, though, it all comes down to the bottom line – and RSR cautions against digital-signage projects driven by metrics that aren’t reflected there: “Much of the effort to date around in-store media has revolved around trying to measure things like opportunity to view and dwell time, when clearly retailers are focused on one thing above all others: improving sales.”

www.rsrresearch.com

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