Kroger launches digital signage / in-store TV network

Author: Bill Gerba on 2005-08-22 14:03:50

Sources including aka.tv, VisualStore, and Convenience Store News are reporting that Kroger supermarkets is planning to install a new dynamic signage / in-store TV network in their 2,500+ locations across the US. To this end, they have partnered with In-Store Broadcasting Network (IBN), a company largely known for its pervasive audio networks in retail venues. While the company might be unfamiliar to some in the digital signage industry, IBN is a venerable force in out-of-home advertising, managing audio networks for major retail chains including Walgreens, Rite Aid and Meijer. In fact, Kroger themselves already use IBN's audio advertising network, so an expansion into digital video signage makes sense for them.

So just who is IBN? Well, according to their own website, their network extends into all of the top 100 designated marketing areas (DMAs), and they reach over 100 million (unique?) household decision makers. According to their press release, they provide media exposure to more than 256 million shopper visits per month in over 17,000 grocery and drug stores in the US and Canada. These numbers look more like metrics for a popular website than an in-store media service, but I suppose that it takes a lot of shoppers to keep 17,000 grocery and convenience stores in business. While on the subject of the press release, I particularly liked this quote from Pierre Bouvard, president of Arbitron Retail Services: "Our retail media studies clearly indicate that consumers like in-store media if executed properly. It's tremendously appealing because it permits terrific reach and frequency at the place where it has incredible influence -- at the point of sale." Concise, easy-to-understand, and validating the industry. That's the kind of quote that I like to see coming from Arbitron :)

Looking at the service in more detail, IBN's primary business is to create and syndicate custom audio streams to each of their partner stores' locations. They combine informative and entertaining audio content (like beauty tips, car care information and financial news, depending on the venue) with 30 second audio ad spots that play once per hour, with a minimum of 14 times per day, 7 days per week. They note (on this page) that their primary advantages are "time sensitive, price based promotions," "flexibility and customization" (of content and advertisements), and the ability to "break through the visual clutter" (my emphasis added).

Now that last point will probably catch your attention, as it did mine. From their website (same page as before):

"In-Store Broadcasting Network delivers audio ads exclusively and ubiquitously so you can break through the visual clutter that is pervasive in a growing number of stores and reach those that do not visit every aisle during their shopping trip. With In-Store Broadcasting Network, you can reach shoppers whenever and wherever they are in the store and when it matters most - at the point of sale."

I completely agree with the latter part of that statement � any number of studies have shown that point-of-sale advertising is effective precisely because it influences shoppers during their decision making processes. And audio marketing/advertising certainly does have some advantages � the ability for shoppers to passively consume the content without always paying attention, for example, or the ability to be heard pervasively throughout an area without having to focus their eyes on a particular location. However, these very advantages can also be drawbacks, and I think that some retailers (and IBN) have acknowledged that audio isn't always the best medium to get a brand message across. Nor can it really be used for the most precise ad targeting, where the presentation medium is placed immediately beside the product being advertised, such as on an endcap display. (Yes, I suppose you could use HSS or sound domes for this, but that would probably over-limit the medium's reach, and likewise, its usefulness.) With the ability to deliver highly targeted visual messaging, digital signs would appear to be a logical complement to even the most successful in-store audio programs. The Kroger announcement shows that IBN and its customers are ready to test this theory on a large scale.

Given their impressive foray into the digital signage marketplace, IBN will likely establish themselves alongside PRN as one of the largest digital signage network operators in the US, with their rise occurring virtually overnight (well OK, they acknowledge that it will take about 18 months to roll out the network). And it stands to reason that they'll continue to upgrade other clients' networks to video as it makes sense to do so. Other in-store media companies should pay very close attention to their performance in the coming months. A successful Kroger rollout could signal the beginning of a mass adoption of digital signage strategies by other traditional POP and retail fixtures companies. As digital retailing technologies become more prevalent, many retailers will look to their existing vendors to implement these systems, and the vendors, in turn, will look to existing industry players for help getting started.

Obviously, I'd like to see digital retailing technologies (e.g. interactive kiosks and digital signs) simplified and commoditized to the point where any number of mainstream vendors can offer them to their retail customers. I'll be very happy with the progress of our industry when these tools are treated more like marketing and advertising tools and less like a hot new technology. Seeing incumbent in-store marketing companies branching out into digital signage is a definite sign that this sort of change might be closer than we think.