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Retail Television Networks Coming of Age

Author: Bill Gerba on 2005-02-18 12:31:17

I came across two articles in the news today about in-store television networks that shed a bit of light on the possible business models and ROI potential of in-store advertising.  The first article is actually some PR from satellite content network provider IMTV about a project that they're rolling out in Russia.  The company intends to invest $10M to deploy a network of advertising screens across the region, starting with their first deployments in Ramenka Company.  While not tremendously exciting (to me, anyway) in and of itself, what caught my eye were the specifics of their content formatting:

"Every area will have its own timing of ads broadcasting. For instance, Food and Non-Food areas will have [a] 7-minute cycle which consists of 20 advertising clips, each 15 seconds long. The time cycle in BWS area is 3,5 minutes, in the Cash desk area - 6 minutes, in Halls and Corridors area - 3 minutes. The customer stays a little longer in the Restaurants and Cafes area that is why the time cycle for commercial[s] here is 15 minutes."

So their recipe for success is perpetually looping short-duration commercials, presumably for items found in the store.  They clearly have given some thought to total cycle length, factoring in the amount of time that a person is likely to linger in a particular area of the store.  I would like to have seen a bit more information about the type and style of their advertising content: are they just repurposed TV commercials or specially-created in-store TV ads?  And will they all be 15 second clips, or will segment lengths vary too?

The next article comes from the New Jersey Star Ledger, which claims that CompUSA has had excellent success with their own in-store TV network.  The really amazing quote from the article:

"In the stores that included advertising, sales of the advertised products averaged 29 percent more than in the other stores" (my emphasis added)

The article also goes on to describe the benefits of displaying content away from checkout aisles, where customers have likely already made their purchase decisions.  And speaking of purchase decisions, we've once again encountered the famous "70% of purchase decisions are made on the sales floor" quote. As usual, it's unattributed.  Does anybody have any idea what the original source of this quote is?  Does it have any basis in reality?  It would seem to be anecdotally true, and it makes plenty of sense to me, but I'd like some corroboration.

So what does all of this mean for us in the digital signage industry?  Well, if you believe all of the studies and forecasts coming out, the market is still "poised for explosion" but hasn't actually exploded yet.  Whether or not that's true, we do know that all of the necessary technologies have come of age, business models are maturing, and more companies are going public with the results of their signage experiments.  This, in turn, helps newcomers and established institutions alike to make intelligent decisions about the best way to implement their digital content networks.  In-store digital advertising is no longer looked upon as a quirky experiment or pet project; it's now a bona fide component of a retailer's overall display marketing strategy.  Even stalwart VARs and integrators are starting to take notice (click that link, it's a good overview from Integrated Solutions for Retailers, which I highly recommend).

Because the market is still so young, it's hard to get solid data about the efficacy of in-store digital signage.  But the initial results that I've seen (and posted about, of course) indicate that a well-implemented signage network can perform the nearly-miraculous retail trifecta of lowering costs, improving customer satisfaction, and driving sales.

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