Digital signage — that is, those in-store screens that allow retailers to communicate with shoppers — is divided into two different segments: the merchandising model and the advertising model.
Kris Konrath, director of marketing for Convergent Media Systems, explains that you might see the advertising model by walking into a Wal-Mart and catching sight of ads by Wal-Mart suppliers, say Proctor & Gamble or Gillette. The ads are paid for by the consumer products companies, and they are sold pretty much the way ads sell on traditional television networks — with the companies pushing their products.
The merchandising model, says Konrath — whose company helps its customers create, install, run and maintain digital signage — would be used by companies like Gap or Nike. "If you go into a Nike store, you will see digital signage, but you won´t see any advertisements for Coca-Cola or American Express. You will see Nike ads."
These ads will be short — five to 15 seconds. "They really don´t care about selling any more shoes. All they want to do is reinforce that Nike brand when you´re in the store," Konrath says. "So, you won´t see any "Buy-One, Get-One-for-50-Percent-Off ads." The messages will be all about people feeling good about wearing Nike shoes.
Some digital signage networks are configured so that local managers of, say, a chain of restaurants, can go into a system created by a company like Convergent and create a special message. If, for example, a restaurant in Miami gets more ground beef than it anticipated on a certain day, the manager can create a message telling customers that meatloaf is half price today or that burgers are on sale for $4.99. The rest of the message — already in the system — carries the chain´s imagery — its look and feel.
What that accomplishes, says Konrath, is, "It gives the local manager the ability to create his own messages while also giving the corporation the comfort of knowing they don´t have a cowboy out there making what he thinks is great digital signage but really doesn´t capture the corporate brand."
While such tailor-made digital signage is pricey for small retailers, Konrath says there are packages available that offer "digital signage in a box. It´s not real customizable, but you can get some pretty nice packages simply with a PC and a display."
Coming up in Retail Strategies: more interviews with real, live retailers