Signs of the times: digital signage industry

The digital signage industry is filled with thousands of players. How to get the best bang for your buck.

In the early 1980s, legendary Loblaws retailer Dave Nichol rolled TV sets into the garden sections of his grocery stores, and showed videotaped commercials promoting azaleas. When azalea sales jumped to 1,700 per store per week from one, he knew he was onto something.

Today, digital point-of-purchase advertising has moved way beyond VHS. “We can tailor messages and send them out to individual stores, and to individual monitors in each store,” says Graeme Spicer, digital signage expert at retail marketing consultancy DW + Partners.

Prices on plasma and LCD screens have dropped dramatically in the past two years, making digital signage ever more cost effective. But the industry's like the Wild West. “There are thousands of players,” says Spicer. “Everyone says they'll come up with the financing to install the hardware, then hopes they'll sell enough advertising on screens to recoup costs.”

Spicer suggests digital signage's power has nothing to do with ad revenue. Instead, he thinks retailers should use this strategic tool “to drive consumers into purchasing categories they weren't going to consider, like higher-margin private-label products.”

Spicer highlights Tim Hortons' use of 42-inch plasma screens to promote coffee-and-doughnut combos in the morning and lunch specials at noon as a stellar example (above). U.K. grocery chain Tesco, however, is a great example of a digital signage screw-up. Tesco installed screens in half its 100 stores. But the program has been temporarily suspended: “Too many screens, in less than optimal locations,” says Spicer. Research indicates shoppers look at digital in-store screens for an average of 2.5 seconds. The medium may be the message, but it better be clearly on display.