Broad Thinking. Narrowcasting.
By: Ken Goldberg
As a young management consultant to retailers in the late 80′s, one of my first engagements was helping a large women’s apparel chain conceive, develop and implement a merchandise testing program. The basic idea related to an old rule in fashion retail: 20% of items are huge winners, 20% are huge losers, and the rest are well, average. Identifying both winners and losers with a small initial investment had huge potential benefits. At the core of the test program was an effort to understand the demographics, psychographics, geography and volumetrics of the stores and the creation of “clusters” that allowed merchants to look at manageable and distinct subsets of the chain. At the time, this was cutting edge stuff, and really paved the way not just for testing, but for localized assortments, at least at the cluster level. Since then, technology has provided more data, and the grocery industry has taken the lead on localized merchandising. But it remains an imperfect science. This week, RetailWire published an excerpt of an excellent article from Bill Emerson of Emerson Advisors entitled What Localization Means. Emerson’s article describes in some detail what it might take to get to the next level of localization in retail. The many detailed responses in RetailWire’s BrainTrust forum are an indicator of how hot a topic localization remains in retail. For me it was a trip to the past, as well as a link to my current passion for the DOOH space.
Emerson asserts that localization recognizes that customer preferences vary by markets and locations, and that retailers can gain incremental margin and loyalty by catering to those differences in preferences. Makes perfect sense. The article goes on to describe the various structural roadblocks in most retail organizations to getting localization right. Much of that seems applicable to digital signage. In fact, when retailers get localized merchandise assortments right, they can turbocharge the impact with localized messaging on their digital signage network. So it would make sense that marketers should learn from the pain endured by their merchandising peers as they strive to optimize localized digital signage content.
Here are some of the lessons learned, borrowing from Emerson’s key points:
Digital signage networks have long had the ability to target content to specific locations or screens. Generally, that ability has been used to accommodate advertisers. Localization utilizes many of the same functions, but exists primarily to engage viewers by recognizing differences in their preferences. As network operators look to enhance their value proposition to advertisers, they would be well served to enhance their engagement with the viewers that advertisers covet. There are lessons to be learned from decades of localized merchandising efforts at retail. Look for resources to begin to shift toward content management and traffic functions as networks recognize the value of localization done right.