In the last decade, the Indian retail industry has seen a significant shift towards organised retailing through large-format retail chains spread across the country. This trend has enhanced the need for technology solutions to meet the various challenges that arise owing to the massive scale of operations.

A key challenge retailers face is developing new point-of-sale and inventory management systems to improve control over pricing and promotions and streamline execution across the chain of stores. Earlier, retailers relied on advertising in traditional media such as television, radio, or newspapers to promote their brands, their stores and their seasonal goods to consumers. However, in the current scenario, as organisations are constantly looking at ways to cut costs,
retailers are also focusing on web as a cost-effective platform to reach out to a wider target audience.

 

Advertising has thus followed consumers online. The rise of Google and the rising revenues of of other web advertising players such as Yahoo!, MSN, and AOL are testament to this fact. Certainly, web-based advertising is a great facilitator of B2C e-commerce, which is increasing at a very healthy 18.2 percent CAGR worldwide (according to IDC's Internet Commerce
Market Model version). However, retail e-commerce still accounts for only a miniscule percentage of sales. Therefore, although the web is a key channel for retailers, research from retail industry trade associations shows that consumers make approximately threequarters of their buying decisions in the store.

As a result, retailers are beginning to invest in emerging in-store marketing solutions such as digital signage, digital displays and content that can be remotely managed over an IP network. Digital signage is slowly gaining traction within the retail segment. It offers retailers a powerful new medium to deliver targeted, relevant and engaging messages that promote brand awareness and influence buying behaviour where the impact is greatest-at the point of purchase.

Digital signage systems allow centralised scheduling, management and publishing of digital media assets to on-premises digital displays and kiosks. Displays are connected to the network via media players, which communicate with the digital signage server software to play content. As bandwidth and storage become more affordable, digital signage is seeing wider adoption.

Key drivers for increased adoption
The use of digital signage by retailers has been driven by the emerging needs of the industry. Modern retailing formats, the advertising overload that surrounds consumers, the need for dispersed retail outlets to maintain brand continuity and the necessity of tracking consumer habits are prompting retailers to explore new technologies. Digital signage offers retailers a number of benefits.



Engaging consumers
Digital signage gives retailers an opportunity to engage customers in the store when they are most likely to be influenced. It successfully draws consumer attention to key in-store promotions. Digital signage can be a particularly effective way for retailers to promote privatelabel brands that carry higher margins. It is also an excellent vehicle for high-fashion merchandising, and other 'lifestyle' marketing, because it can engage the viewer with compelling videos. As digital signage can very easily be customised-by geography, time of day, season, or demographics-it can be made much more relevant to the consumer. Grocers, for example, can set up different playlists for morning food shoppers, afterschool snackers, and commuters on their way home from work, according to the products they are likely to buy.

It often happens that the retail sales staff at the outlet do not have the expertise to guide consumers for every product, especially in the case of electronic gadgets. In this case, digital signage with directional audio can be very helpful, allowing consumers to select a product of
their choice.

Tracking consumer behaviour
Digital signage offers retailers the potential to integrate dynamic displays with other IT systems and track consumer behaviour. It allows retailers to analyse the effectiveness of messages and modify content accordingly. Digital signage programming could also be tied to inventory levels. Playlists could be correlated with point-of-sale data and market basket analyses to evaluate the effectiveness of messages by time of day or location.  Digital signage could be integrated with video surveillance to analyse buyer dwell times.

It could be connected to sensors that make the viewer part of the equation; for example, sensors could read the radio frequency identifier (RFID) tag on a garment that the shopper in front of the sign is holding and cue the signage system to insert an ad for suitable accessories. Also, sensors could infer the viewer's age and gender and cue the signage system to play content for the viewer's specific demographic. This can give a significant push to consumers to make a purchase decision.

Training for internal employees
Digital signage can also be used as good training medium for retail sales staff across retail chains, as traditional communications methods are inflexible and impersonal and PC-based training is inconvenient. With digital signage, retailers can cut down on travel costs to a great extent and keep their sales staff well-trained on every new product launch.

Advertising revenue
Digital signage creates more in-store advertising 'real estate' than traditional, printed signs. Digital signs can screen several ads in the time the average time a viewer looks at the sign. As digital signs displaying videos and graphics are so much more compelling than printed signage, retailers can offer a much higher-impact advertising opportunity to their major brands, thus generating greater advertising revenue for themselves.

The digital signage market is poised for rapid growth over the next several years as retailers move from successful pilots to broader deployments and the market entry of major IT providers takes digital signage into the mainstream. Compelling video-based content will continue to be the most important ingredient in any successful digital signage network. IT departments need to become more educated about the narrowcasting of video and other rich media over the IP network. It is imperative for IT departments now to partner with marketing to explore how digital signage can help increase revenues and improve business agility for retailers.