Seeing the Forest Through The Trees

Digital signage is not a new concept. The potential value has been understood for some time, but figuring out how best to make it work is still an elusive question for those evaluating the market. Over the past few months, this process has been further muddied by the entry of many new companies in the space. Go to any tradeshow, query any search engine, and the results are staggering. Everyone these days is in the digital signage business. From display manufacturers and kiosk companies to content creators and multi-vendor consortiums, everyone is trying to get into the game. How does a retailer make sense of all this?

To begin, one has to understand that the value proposition for digital signage centers around the network. Networks are capital investments. Investments should yield benefits and provide future options for monetization. Does a digital signage network make sense for you? If so, how do you determine which vendor(s) can make it happen?

Like any technology acquisition, the first step is to adequately define the project and set your expectations. Free yourself from the shackles of thinking in terms of fixed content, DVDs and video tapes. Think about POP replacement, enhancing the customer experience, generating a new source of revenue through advertising, and reshaping corporate communications and training. Engage the imaginations of Marketing, Merchandising, Store Ops and Human Resources. When you have defined your requirements and metrics for success, it?s time to examine the alternatives.

While the value of a digital signage network resides in the ability to inform, educate and influence consumer behavior at the point-of-purchase, the discipline of this new industry resides in the architecture. There are a great number of vendors coming to market with opportunistic solutions leveraging technology that is neither retail-hardened, nor more importantly, optimized for digital signage. Slapping layers of software onto a low-cost PC can hardly be considered an integrated part of your in-store architecture. On the surface, those solutions seem to deliver on the promise of digital signage, since they can drive content on a digital display. However, your laptop does that, too. There is much more to consider if you view a digital signage solution as a strategic opportunity, as a network:

1. Does the architecture make it an IT project, or an out-of-the-box Marketing application?
2. Can it integrate with emerging standards and frameworks for in-store systems, or is it a dead-end ?island of information??
3. Can it scale to meet your chain-wide and corporate requirements as they develop, without creating a management nightmare?

One thing is certain: the applications of and requirements for digital signage solutions in retail will evolve over time. Make sure your digital signage vision is not bottlenecked by platform, cost of deployment or maintenance. Ask the various vendors where they think digital signage is going in the retail environment. If the discussion centers on content and technology be wary. If the message is that today?s media player will become tomorrow?s marketing appliance, integrated with other store and corporate systems, you may have found a vendor that understands retail and the lessons learned along the long path from cigar boxes to self-checkout. Nothing is really new about flat panels and video content. What?s new is how it can be applied to the zero-sum game of retailing.

The ?perfect storm? of falling display prices, availability of broadband, fragmented mass marketing vehicles and diminishing returns on cost reduction initiatives has created an opportunity to change the way we relate to customers at the point of purchase. Dream a little, ask questions and find a model that is consistent with your goals.

Ken Goldberg is chief executive officer of Real Digital Media, a Florida-based provider of next generation digital signage products for establishing point-of-purchase marketing, advertising and corporate communication networks.

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