The Digital Signage Insider

Tipping points... breakout years... hockey sticks.  No matter which clich is your favorite, industry enthusiasts (myself guiltily among them) have been using these models to predict an exciting and heretofore-unseen explosion in the digital signage marketplace for years now.  The thing about inflection points, though, is that they're hard to spot until after you've passed them.  That's why after reading the In-Store Marketing Institute's latest report on digital signage (authored by Bill Collins and Laura Davis Taylor),  I'm starting to suspect that 2005 might have been the inflection point that we've all been waiting for, especially given the copious number of deals announced or started during these first few months of 2006.

In summary:

• Most of the growth in the past twelve months came from discount stores and large grocery chains, with industry veteran PRN announcing that its Wal-Mart TV network would be upgraded to feature plasma and LCD monitors running multiple channels of department-specific content.  This not only solidified PRN's place as the premier digital media network provider for Wal-Mart, but also reaffirmed Wal-Mart's support for digital signage as part of a successful in-store marketing strategy.  (I think it probably also adds merit to the theory that PRN got acquired in order to be able to capitalize the Wal-Mart TV upgrade).


• Not to be outdone, arch-rival Target announced in December that they too would be deploying a high-def digital signage network to all 1,400 of their U.S. stores in the coming months.  Called "Channel Red,"  this network is unusual in that the folks at Target decided to eschew a content and media sales partner (like PRN), and instead manage the entire network themselves.  It will be extremely interesting to see how that works out for them this year.


• On the supermarket front, a number of large deals were announced (and some actually got started) in 2005, including a number of wins from SignStorey, who will be placing screens in Albertsons, Price Chopper and Pathmark stores this year.  In-store audio provider IBN also announced its signage aspirations with a deal to install an audio/video retail media network dubbed "Perfect Media" across the Kroger grocery chain, which is currently in trial at a handful of stores in the Houston area.

In all, I'd say that Collins and Taylor do an excellent job summarizing the major deals won during the year, as well as capturing a list of other active digital media network deployments in the US (which is starting to read like a "Who's Who" of retail chains).  Judging from the quality of deals won, it's clear that digital merchandising has taken hold in the US.  And while some may still argue about the true value of the screens or how network ROI should be calculated, digital signs have successfully made the transition from quirky, expensive eye-candy to important merchandising and marketing tools. Really, the only thing that I really had to disagree with in the entire report was the statement that:

[I]t's important for retailers to remember that satellite radio, digital video recorders (such as TiVo) and blockers for online advertising are increasingly eroding the value of garden-variety media advertising. This trend is likely to accelerate as young people who are accustomed to media interactivity - and to tuning out marketing messages - enter middle age.

In the not-too-distant future, traditional one-way electronic media that is laced with advertising (broadcast and cable TV, along with commercial radio) will decline in significance, leaving the bricks-and-mortar retail store as the only place (or medium) that is guaranteed to reach consumers.

I think it's a bit unrealistic to think that cable, satellite and broadcast TV providers are just going to roll over and die any time in the near future.  As much as I'm enjoying the rise of digital signage and other in-store media, it's pretty clear that video-on-demand, interactive (two-way) cable, and the ever-looming specter of a Google-powered TV advertising system will keep in-home advertising relevant for a long time to come.  However, the proliferation of new digital signage deployments and continued evidence that in-store media generates measurable results certainly bodes well for the long-term viability of the industry.  This is especially true as more brands begin to evaluate and budget for retail media like any other advertising or marketing vehicle, rather than treating it as the latest newfangled technology looking for guinea pigs.

On a final, unrelated note, tomorrow marks the two-year anniversary of this blog!  As I originally wrote in my very first post, it started as a journal for organizing my thoughts and sharing information with customers, partners and coworkers.  To my great surprise, it has grown quite a bit since then, and is now actively read by over 10,000 digital retailing enthusiasts each month.  I'd like to thank everybody who has contributed data, comments and article ideas over the past 24 months, since it would be awfully hard to try and stay on-topic (as much as I ever do) without your help.  So keep those comments coming, and let's watch 2006 progress into the first "post-tipping point breakout year of hockey-stick growth"!