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Digital Signage Spending Will Increase In Retail Sector By  Lyle  Bunn  Lyle@LyleBunn.com  Jan.  2017    

      Education sessions during the National Retail Federation (NRF) ’17 Big Show were dominated with making retail more relevant through harmonized in-store and online approaches that provide improved customer experiences. The show floor included providers of analytics, digital engagement and the operational applications that make retailing, consumer satisfaction and brand building possible. The importance of analytics as an investment driver was paramount. Retail delegates looked for tools and approaches that they could implement and show return on investment in the near-term while setting the course to serve ongoing goals. Dynamic Signage is being used and is integral to modern commerce system architecture for customer engagement and experience in physical retail. Forrester Research reports that 73% of retail businesses identify that improving the customer experience as a priority. Fiona Swerdlow, Head of Retail at Forrester Research affirms that “content drives revenue” while reflecting that 68% of retailers have made personalization and experience a priority, but 53% lack the right technology to personalize. According to a report by Technavio the retail display market is expected to have a compound annual growth rate of 16 percent from 2017 to 2021 a market worth

Brian Krzanich, CEO of Intel at NRF17. “We  believe  data  has  become  one  of  the  most  important  forces  in  all  of  technology”.

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$11.2 billion by 2021. A key driver of the market is retail display's ability to offer better advertising than traditional methods while also eliminating paper waste, adding to customer engagement and experience, and improving messaging management and ergonomic designs. The Technavio research report on The Chief Marketing Officer (CMO) Spend Survey 2016–2017 reflects that the CMO budget is climbing to 12% of company revenue as marketers juggle more demands. CMO marketing tech spending is on track to exceed the CIO technology spending in 2017 as marketing looks after a growing number of customer touch points. In addressing the National Retail Federation conference delegates, Chris Riegel, CEO of Stratacache noted “retail has generated more than $5 billion in new revenues over the past year and with it, an additional $350 million in new budget has been designated to marketing”. As digital is the instrument of economies and engagement, digital experience (DX) is the retail opportunity and imperative. Department, specialty, grocery and convenience stores provide browsing and immediate purchasing satisfaction to the majority of the population. 51% of the US population for example lives within one mile of a 7-Eleven store. Consumers visit a grocery store on average of 2.7 times monthly. 90% of Americans live within 15 minutes of a Wal-Mart store and the 27 brands of Wal-Mart stores are visited by 100 million every week. Marketing leaders who own or share P&L responsibility get budgets that are 20% higher, on average, than those without plans for a P&L, demonstrating how marketing leaders can earn greater authority through greater accountability. "It's been proven consumers buy more impulse items in a retail store versus online. Digital is a pivotal tool when used effectively in building these emotional impulse sales...driving discovery, engagement and trial,” notes Jean-Pierre Lacroix, President of Shikatani Lacroix Design. He adds, "Digital should not be an afterthought and more importantly it should be integrated as part of the customer experience." Fiona Swerdlow, Head of Retail at Forrester Research noted during a special NRF17 briefing hosted by EnterWorks, providers of brand asset management capabilities, “For 71% of shoppers, retailers’ valuing of their time is the most important thing that brands can do for their patrons.” Rick Chavie, CEO of EnterWorks notes that efficiency in creating, applying and reporting on the impact of digital media content offers differentiated experiences. Disinterest and distain for poor return on time and money are the shadows cast over retailers by consumers. “Retail success is all about the content used for marketing. For online shoppers, if the content (i.e. product images and information) is not available, then the product is not available,” notes Swerdlow,

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adding “Weather is increasingly impact sales – because of big swings in temperature but mostly because it is so contextual”. Disintermediation is occurring as brands sell directly online and work with numerous retailers. This is a win for brands that are increasingly working with retailers who can deliver consumer traffic and conversion. The store within a store concept has been embraced and analytics and content are increasingly driving partner commerce. Content and analytics are siblings. New content management and media display capabilities are driving digital experiences in store. Organic Light Emitting Diode (OLED) display offered by LG Electronics was named the Best Product at the global Consumers Electronics Show in January 2017. This display direction means optimal presentation of media as is particularly useful to the promotion of products in fashion, food, jewelry, luxury goods, travel, automotive as well as in galleries and museums. As content in High Dynamic Range (HDR) quality can best present products in fashion, jewelry, automotive and other categories where this is essential to merchandising that generates premium pricing and margins, this state of the art in content production has other applications. In 2017, the movie Loving Vincent will be released. In a radical paradigm shift, 67,000 individual paintings have been created by artists in the style of Vincent Van Gogh. These are the content in telling the artist’s story around 28 of his most famous works. The ability to show the brush-stroke detail and true color in the works of this master artist is now made possible with OLED display. Lee Summers, CEO of Reflect and ReflectMedia notes, “the market value on in-store experiences is still being established”. 2017 is the year to gain ground on your competition. The industry has been discussing the upcoming wave and we are all finally in the middle of it. A key to success says Summers “Getting to the right team at the brand level that hold the out of home media budget will get you past the in-store marketing dollars and allows a broader effort. Sometimes this can be difficult as the industry is still trying to set the market value on in-store experiences. If a retailer can capture additional marketing funds and retain the in-store coop funds from the brands it should allow the retailer to increase sales with out pulling from another source that relies on those marketing efforts”. Scott Knox, President & CEO of the Institute of Communication Agencies (ICA) (www.icacanada.ca) says, “As the world has accepted that transformation must and is occurring, brands are overlooking that communications agencies deliver transformation”.

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“A risk-averse mentality and fiscal considerations are working against business and brand transformation,” notes Knox, adding, “There are many more procurement-focused boards than marketing-oriented boards. This thwarts sharper thinking in favor of short-term responses to a business challenge. Brands have to move away from distress-based plans and investment to apply approaches that fundamentally advance their goals at the strategic, tactical and operational levels”. “Agencies have played a key role in business transformation” he says, advising that “an adequate brand briefing of the agency is essential but this key element of value assurance has been eroding.” Knox adds, “Planning, option identification and implementation are essential elements of the growth and transformation that brands require to be relevant and successful. ICA members have always been agents of change by coordinating supplier and service capabilities. As digital commerce has grown as a critical success factor for brands, communications agencies are best equipped to curate the right technologies for application to digital engagement and customer experience. Agencies are partners in progress toward incremental and transformational change”. “67 percent of the post-millennial, “Generation Z” population prefers to make purchases in a physical store most of the time. Since this generation holds an estimated $44 billion in buying power, that’s something retailers should be considering now” notes Chris Wong, VP, Strategy and Ecosystem of IBM Global Consumer Industry. Customer digital experience is at the center of the enterprise screen media movement. Screen media has been a second-order discipline in retail following the priorities of purchasing and supplier relations. The focus on filling shelves has often been greater than the focus on emptying them. Production capacity and an oversupply of goods have made sourcing easier, while consumerism and access to credit have been key drivers of retail revenues. Investment in the customer experience is ordained by financial stewardship, which assigns budget to priorities, and through management, providing order. The retail crisis is in how revenue is achieved. Focusing on the customer is good business building for the retailer and the brands that it calls partners. Lyle Bunn (Ph.D. Hon.) is an analyst, advisor and educator related to dynamic signage and place-based media. He is a member of the RetailWire Braintrust and other advisory boards. Among other recognitions he has been named of the 11 most influential people in digital signage. He was recently named Chair of the Center for Digital Engagement. Lyle@LyleBunn.com