Traditionally, in-store digital signage has been used for the mass-broadcast of commercials set by the chain and, sometimes, tweaked regionally. But why not make the content truly unique to a store, dictated by local weather, sporting events or near-time POS activity?, asks Michael Hiatt, who ran Wal-Mart's in-store media program until last year.
In that Boston grocery store, had the local team won, a congratulatory message would have been queued up, suggesting a celebratory case of the same local beer. The next morning, a thermometer outside the store detects unseasonably hot weather and triggers an automatic store-wide commercial for Pepsi. An unusually cold morning chill, meanwhile, could push Folger's coffee.
Or better yet, the store POS unexpectedly sees a huge run on giant red paperclips, far in excess of the norm and a trend not detected by regional counterparts. Turns out that it's from a mandatory school-wide project at a local elementary school. Within minutes, an alert to the store general manager allows for digital signage to declare a 20-percent-off sale on the popular paperclips, on the rationale that it's a nice loss leader that residents will appreciate. A different product and a different situation might have merited a price hike (quietly entered into the POS and on the shelf) and a digital campaign pushing the already-hot item.
(See related Wal-Mart stories this issue: Wal-Mart Digital Makeup Trial: It’s the Inventory, Stupid and Wal-Mart: "It’s Time For Chip-And-PIN In The U.S." )
Some customized capabilities are within the reach of most chains, and it's specifically something that Hiatt's former employer can do, he said. "It's embedded in the system. It just needs to be turned on. [Wal-Mart executives] are just waiting for the opportunity to make it work. With intelligent scheduling, you can go to a Coca-Cola ad anytime the temperature is above 85 degrees and, when it's 50 degrees and raining, then Campbell's soup wants to participate."This kind of ideal customized localization (or should it be localized customization?) with digital signage can work quite well with real-time or near-time information, but it might work even better with reminders, said Hiatt, who today runs Dynamic Retailing LLC. "The more compelling idea is being able to remind people of what's coming up. People actually buy a lot more beer if the forecast suggests the weekend will be nice and sunny," he said. "It doesn't end up mattering what happens over the weekend. It could be raining."
In other words, forecast accuracy might become irrelevant, at least in terms of digital signage strategy. Hyping the prediction could push sales, always leaving the opportunity to push more this weekend if, by some miracle, the forecast is correct. And if it isn't, the message can be changed with a few keystrokes.
Digital signage can also be used effectively for regional events or holidays that might be seen as meriting national marketing attention. "Not everyone cares about Three Kings Day," Hiatt said.
The POS data near-time recommendations are certainly doable, he said, but the challenge there is the analysis load. Typically, POS data is zapped to corporate for chain-wide analysis, with an eye on regional differences. A store-specific approach would require that the data be sent to corporate and that a store-only copy be saved—and an analytics engine used—locally. That approach can be done, but it might require more effort than it's worth for a general manager, who could get much of that information from talking with cashiers and walking the aisles.
Theoretically, the most effective use of digital signage is not keyed into the chain, the regional or even the store but to individual shoppers. However, such CRM-based approaches—whether directly through an RFID tagged loyalty card or alternatively using wireless smartcarts or shopping assistance devices that are associated with the loyalty card—are expensive and difficult to get to work properly.
Technically, a smartcart might have less of an ROI benefit because the cart itself could already broadcast its own ads to that identified consumer. And the customer would be shown that ad continuously, regardless of where—or how fast—she pushed that cart. A complimentary, coordinated ad effort—with the cart and the aisle-based signage working together to reinforce messages—might be powerful, but it's probably too complicated and expensive to be practical in the near term.Hiatt said he didn't get any experience trying that approach at Wal-Mart because of the world's largest retail chain's legendary resistance to any kind of loyalty program.
The sales pull from such efforts can be impressive, he said. For example, in a recent presentation in London, Hiatt said Wal-Mart achieves—on average–a 64 percent sales boost from endcap screens alone.
A pragmatic challenge with highly customized digital signage efforts—beyond the cost of local programming and potentially even video creation—is funding. Chain-wide, Wal-Mart is able to raise non-trivial amounts of cash from key suppliers—such as Procter & Gamble, Kellogg's and Hershey's—for placing their 5-second to 30-second (most are 15 or fewer seconds) ads on its video network.
That Wal-Mart network has sufficient eyeballs to place it right below the major television networks (CBS, ABC, NBC and Fox), and its 140 million weekly visitors (not visits, but actual visitors) blows away any single media show. Compare that 140 million, for example, to the Super Bowl's 80 million viewers, American Idol's 23 million, Desperate Housewives' 15 million and The Office's 5 million, Hiatt said.
Wal-Mart's sales lift figures—attributed to the digital signage campaigns—are also impressive. According to the figures Hiatt used in his speech, laundry detergent saw an average sales lift of 12 percent, snack cake purchases increased 34 percent, cereals were boosted 60 percent and new mouthwash sales soared a stunning 87 percent. As you can imagine, the supplier ROI for those cereal and mouthwash campaigns was 147 percent and 121 percent, respectively.
That's a very attractive buy nationally, but achieving such results is much more difficult regionally and certainly at the store level. "Pampers is not going to buy with the individual store," Hiatt said. Store management can have leeway. But if a large number of individual store managers start going their own way, it may impact the revenue that can be earned chain-wide. Just something to consider, when the full ROI is being calculated.