The Digital Signage Insider

Reader Feedback: QSR Digital Signage, Communication and Walmart

Published on: 2009-08-13

It's been two weeks since we posted our newest survey on finding out the true cost of digital signage, and we're shaping up to get a good 200 results or so by the time it closes at the end of August. Please take a minute to fill out the survey if you haven't done so already. After all, it's for the good of the industry -- and I'll even send you the full set of responses if you provide your email address on the survey form. Speaking of surveys, I recently turned back to the results of a previous survey we did on the challenges facing the digital signage market, and got caught up reading some of the comments. Considering the great insights that people contribute to this blog on a regular basis, I thought the time was right to post another compilation of particularly useful or insightful comments.

Is there an ROI for digital signage in QSRs?

Bruce from Designage did a good job of summarizing the market opportunity for digital signage in the Quick Service Restaurant (QSR) sector, which arguably didn't get the proper attention in our last poll:
Is QSR/Foodservice considered part of the retail market in these results? IMHO, ROI is less challenging with this industry (there are less sales choices, clear day parts, many processes and controls already in place along with historical trends to better measure success or failure with when creating an ROI). I think this industry should be right up there with the others as doing it right and/or wrong.

Also, I find that the 100's of solutions to choose from in the marketplace also makes it difficult or "too hard to explain the value" as one of the biggest challenges as well. It is equally important to be able to explain the difference (and or value) of one solution versus another. The silver lining as you mentioned, is that there will be more opportunities for consultants (and solution providers) that do a good job of explaining the value of digital signage, and the solution that best fits their customers' needs.

Image credit: Erin Pettigrew
Both parts of this comment are pretty interesting. For one, there have been plenty of trials and re-trials of digital signage, digital menuboards, interactive POP displays, ordering kiosks and other electronic gizmos over the years, and on the surface it seems like Bruce has identified areas where digital signs would offer real value to QSR chains. For all that, though, not one single chain in the US has gone through with a full deployment... yet. There are a couple of big RFPs and deals being "won" out there at this very moment, so it's possible that some big restaurant chain could come out with an announcement that they're making a big investment soon. I wouldn't count on it, though.

As for wading through the web pages of the dozens if not hundreds of "tier one" digital signage providers, I think Bruce hits the nail on the head: consultants and others with some experience actually deploying digital signs continue to have a lot to offer clients who become overwhelmed with the number of possibilities out there.

On selling the "communications application"

Industry consultant Lyle Bunn is never at a loss for words of the insightful variety. In the course of leaving a comment about our last survey, he coined the term "communications application" to holistically describe the application for which nearly all digital signs are deployed:
Nice work Bill in your conducting the survey and then putting the responses in context. I am struck by the portrait that is painted of the digital signage industry being at yet another major inflection point.

Having been through the "wild west" land grab, then technology stabilization and more recently the expansion into a more robust and serviceable channel strategy, the challenges of selling the communications application (rather than "the technology" as a better communications device) is the next major development point. As the market and supply base continues to expand rapidly, the industry risks going off the runway through lack of a strong basis of consultive selling. Without the assurance that networks can deploy and grow on the basis of a strong ROI/ROO foundation, which includes "content" refresh that draws on the inherent playloop and dayparting capabilities of the medium for message targeting, digital signage runs the risk of high sales costs and a broadening distribution of revenues as more suppliers join the industry. Relevant education is still the key.
On the matter of "broadening the distribution of revenues," I'm not sure I agree. Yes, there are a lot of people out there trying to get a piece of a pie that's nowhere near as big as everyone seems to think it is. However, history suggests that over time, we ought to see a significant consolidation in the producer-supplier space. The recession is already forcing the hands of some of the weaker digital signage software companies, and I'm positive it's only the beginning.

The rest of Lyle's comment, though, is spot-on. Even as a mere software vendor, I now find myself spending time selling the 'solution' to whatever communications problem a client is having, rather than some nuts and bolts that run on a server somewhere. The fact that we're moving up the management chain to the CMOs and CEOs of the world is a good thing, though, since they're starting to view digital signage as just another channel in their communication strategy.

Can Walmart hack it as an agency?

Another digital signage guru who needs no introduction is Laura Davis-Taylor. She recently voiced a strong opinion about Walmart's decision to take on ad agency-like duties when it comes to managing their in-store "media":
My hope is that this might FINALLY make the agencies take notice. But, this arm twisting 'do-it-or-else' tactic that Wal-Mart is taking here is deplorable. Seriously, they caused enough ill will when they did this with their digital signage sponsorships and now this? An obvious question is that if they are capable of doing this service better than most major agencies, then why are they forcing vendors to participate? It's not good for anyone and as I do agree that Wal-Mart is a unique retail entity, they have for years spawned copycat strategies. And, regardless of the store size, any retailer can demand a 'participate or get out of my store' ultimatum--although I shudder to think of it.

As you know, I've preached to agencies for years on how critical it is understand the retail store as part of the overarching marketing plan; I still constantly bang my head on the wall over their responses. They either totally ignore it or they come into it armed with oodles of traditional media dogma and no realization (or respect for) how much is to be learned about the store before you take on marketing strategy for reaching people in it. I had one major firm say right to my face that 'there isn't enough money in it to care'.

That might be about to change, eh?!!
I have to agree 100% with this one as well. Like Laura, I frequently find myself talking to folks with old-school media experience that simply does not translate well into an understanding of the digital out-of-home medium -- which of course includes retail media, unless you happen to live in a retail store. My only hope is that Walmart gets their execution right, and is willing to let their vendors tap into that expertise via their own agencies of record. Otherwise, each agency will be left to figure out their own set of best practices and execution strategies, which would be both inefficient and time-consuming.

Thanks for sharing your thoughts

I'm always pleased when people take a minute out of their busy schedules to post a comment on our articles, even if it's an article from a long time ago. And I try to reciprocate by answering their questions and posting comments of my own. But it's even more exciting to load up a page and find that people who know a lot more than me about this stuff are adding to the discussion by bringing fresh insights and ideas. So if you're a frequent poster, thanks again, and keep up the good work! If you're not, I hope that when the time comes and you do have a strong opinion about something in a post, you'll take a moment to let us know. After all, conversation drives our industry just as much as technology and deal making, right?

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