In-Store Digital Displays Are a Financial Necessity, But Invest Carefully
Brick-and-mortar stores are on a tear. While e-commerce is leveling off at about 21 percent of core retail sales, retailers opened more than 4,200 new stores in the first five months of this year, Cushman & Wakefield reports. At this point, “2022 is on track to be the first year of net-positive store openings since 2016.”
All this activity is promising for retailers that have been looking forward to a resurgence of foot traffic after the pandemic-induced drop-off. But it also means businesses are in a new era of competition.
To win over customers and guide them to maximize their purchases while in-store, businesses need to invest in the shopping experience. And a growing body of research shows that digital signage is key.
Surveys have found that digital signage increases customer satisfaction by 46 percent and purchase amounts by 30 percent. Signage at the point of purchase (POP), such as on shelves and racks, can be especially powerful. In fact, POP marketing has been called “the core idea of digital signage.”
As one study put it, compared to static displays, interactive digital signs are more engaging and informative, and “can grab a consumer’s attention right at the POS (point of sale) and positively impact sales … As the attention of consumers increases, such solutions also lead to a better return on investment.”
Growing Market, But Long Way to Go
Steadily, businesses are starting to realize the importance of providing these kinds of in-store displays. The overall U.S. digital signage market was estimated at $5.3 billion last year, and is expected to grow at an annual rate of 6.3 percent through the rest of this decade, Grand View Research reports.
Still, a look at most stores shows that this kind of POS marketing isn't yet the norm. And figures from MarketingChart suggest that the shopper marketing category, which includes in-store displays, isn't growing by as much as overall marketing spend. Businesses have a long way to go in capitalizing on this potential.
Not All Equal
Just as importantly, businesses need to understand that investing in digital signage requires caution. It must be done right to have the desired effect. A growing body of research shows that while some kinds of interactive displays increase sales, others make no difference at all — or, worse, can actually inhibit purchases.
In a study published last year, a team of 10 researchers report that digital displays are most effective when they include “a price-related message.” Also, while “dynamic displays that get a shopper’s attention increase sales,” they must not go too far in the effort to garner attention. “Video projections that are too mentally involving show no benefit.” In fact, they’re “so engaging as to distract the shopper from the task at hand.” So a sale can be lost.
Meanwhile, a separate study found “an inverted U-shaped relationship” between the vividness of a screen and sales. Those with “moderately vivid projections” increase sales, but if a screen is too vivid then it can “frustrate the brain's quest for sense making” and reduce the attention people give it.
Working with companies on digital signage, I’ve also seen that running cords to power them creates unsightly messes and even potential dangers, and that filling them with batteries all day long creates hassles and problems. That's why it’s so important to take advantage of new wireless electricity that can beam power from a distance.
With the right displays in place, retailers can “wow” consumers, make the brick-and-mortar experience more vibrant, and pave the way to a new era.
Ori Mor is the chief business officer at Wi-Charge. Prior to Wi-Charge, Ori was founder and CEO of Appoxee Mobile Technologies, a leading SaaS mobile engagement platform (acquired by Teradata). Before Appoxee, Ori served 11 years in the Electronic Research Department (ERD), a top research and development unit of the Israel Defense Forces. During his time with the ERD, he held various R&D and management positions including large-scale project manager and R&D section head.
Ori holds a master's degree in electrical engineering, Magna Cum Laude, from Tel-Aviv University and a bachelor's degree in electrical engineering, Magna Cum Laude, from Tel-Aviv University. He is a laureate of the Israel Defense Award (2008).