Consumers are more versatile than ever, better informed and often acting less than loyal to brands. They want to buy at the best price and expect excellent service from retailers. Traditional mass marketing is losing impact in a world in which customers are confronted with thousands of advertising messages daily. Newly empowered customers have nearly unlimited access to information on products and prices through the Internet and mobile devices. And they use this information, even if they continue to shop in brick-and-mortar stores.
Retailers will continue to invest in technologies that allow them to reach their customers more individually and efficiently across all channels. These customer-facing technologies comprise online and mobile applications, as well as in-store solutions, such as kiosk systems, electronic shelf labels or digital merchandising equipment.
Retailers Will Invest in Digital Merchandising
Use of digital media for advertising and information purposes has become extremely popular in public spaces and customer areas, such as malls, restaurants, banks, petrol stations and retail stores. In some cases, digital media were installed simply to create a specific ambience in a store or a mall. The use of this technology is showing significant growth rates inside as well as outside of the retail space. In the world of retail, digital merchandising solutions so far mostly support promotions or new product introductions, provide more detailed product information, or help to create an atmosphere that engages customers and enhances the shopping experience.
Many retailers are still experimenting, trialling different options of implementation and business cases. The most common business model is based on selling advertising space and time to suppliers of consumer goods brands or other third parties, which allows the system to practically pay for itself.
Tesco shut down its network of 5,000 screens across 100 stores five years after launching it.
A Look at Tesco’s Failed Digital In-Store System
Tesco, one of the pioneers of in-store TV, began using screens in its stores in 2004. Five years later, Tesco shut down the network of 5,000 screens across 100 stores because the equipment was “outdated and energy inefficient.” But instead of another green initiative, this decision was more likely a general problem of the in-store advertisement market in Europe and the U.K. In truth, Tesco TV wasn’t living up to its expectations and always had a lack of advertisers.
The end of Tesco’s network changed the way the retail industry discussed digital in-store media. Other major European retailers were also complaining about not enough investments of brand manufacturers into digital in-store advertisement. For Tesco, advertising sales didn’t even cover the expenses of the network.
How Walmart Set Benchmarks With its Smart Network
In September 2008, U.S. retail behemoth Walmart presented a revised in-store media concept to agencies and marketers. The Walmart Smart Network was the result of two years and U.S. $10 million in research and development used to identify the optimal locations, applications and programming for reaching the millions of consumers who visit the retailer’s stores each week. Walmart completed the chain-wide deployment in early 2010.
Walmart is the first retailer in the U.S. that has rolled out a next generation of in-store media that is supported by a flexible, open enterprise platform powered by Internet Protocol Television (IPTV) technology that allows the retailer to monitor and control more than 27,000 screens in more than 2,700 stores across the country.
One pillar of the Smart concept is the so-called Triple Play. In a first step, a welcome screen greets shoppers entering the store.
Department screens, mounted only a few steps away from the products show content related to the category. Finally, smaller end-cap screens at each aisle provide customers with the final piece of information needed to make a buying decision.
Walmart’s “Triple Play” comprises Welcome signage, category screen and display at gondola end.
All of the content on the Walmart Smart Network is customised and designed to deliver product information to consumers at the point of decision, when and where they need it. The network deploys response measurement and message optimisation technologies to enable delivery of the most relevant content to shoppers – by store, by screen, by day and by time-of-day.
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