Consultants’ Perspectives

EXPERTS / CONSULTANTS OUTLOOK 2022

“TO THRIVE IN THE MARKET AND SURVIVE, DIGITAL SIGNAGE INTEGRATORS NEED TO OFFER SOMETHING MORE THAN TECHNOLOGY. GETTING OUT OF THE TECHNOLOGICAL COMFORT ZONE, ANALYZING THE NEEDS OF THE CUSTOMER AND THEIR BUSINESS AND DEVELOPING CONCEPTS WILL BE FUNDAMENTAL”.

Florian Rotberg invidis consulting based in Munich Germany

• WHAT IS YOUR PERCEPTION OF THE INDUS-

TRY AT THE PRESENT TIME FOR LATIN AMERI-

CA?

The digital signage and ProAV industry recovered from two difficult pandemic years, much better than expected. Order books are at a record level, but due to problems in the supply chain, most project launches are very delayed. Certain vertical markets, such as hotels and transportation, are still well behind pre-pandemic levels, but overall, the industry is in surprisingly good shape. • HOW DO YOU ANALYZE THE DIGITAL SIGNA-

GE DISPLAY MANAGEMENT COMPANY SEC-

TOR IN EUROPE AND THE GROWTH IMPACT

FOR LATAM?

In Europe, the market is consolidating rapidly.

Some European champions are emerging, while smaller integrators are exiting the market. Size, skills and financial strength are important, especially international tenders that require a large and professional organization.

Many Spanish integrators and ISVs are starting to focus more on Latin America with local subsidiaries or with local partners. The Latin American market could enter a bright period after the elections in some of the larger economies. In addition, digitalization is catching up fast: flagship stores like Falabella in Santiago de Chile are an incredible project.

The invasion of Ukraine in late February may quickly change the rosy picture. Currently, it is too early to determine the impact, but business confidence is falling.

Software vendors (ISVs) are finding it difficult to

EXPERTS / CONSULTANTS

migrate to the public cloud fast enough. Staying competitive in the market requires constant releases of new features and more and more datadriven services. Tasks better developed with SaaS architecture based on AWS, MS Azure or Google Cloud.

• HOW WOULD YOU DESCRIBE THE EVOLUTION

OF THE INDUSTRY IN THE LAST 3 YEARS?

For many years, the industry was dominated by small to large ProAV integrators. Recently, IT integrators and professional services organizations (PSOs) like Accenture or Deloitte Digital have become more active. Also, large architecture groups like Gensler or NBBJ discover the potential of digital signage.

Overall, a good sign that the market has become relevant for the big market players. The market is becoming more professional, data-driven, but also more competitive.

• DO YOU THINK THAT DIGITAL SIGNAGE CUS-

TOMERS AND USERS ARE BECOMING MORE

AND MORE INFORMED ABOUT NEW TECH-

NOLOGIES IN THE MARKET? HOW CAN THIS

AFFECT COMPANIES?

In general, customers are better informed about the benefits and added value of digital signage.

But the concepts are becoming more data-driven and therefore more complex.

The market for easy-to-deploy digital signage packages is growing rapidly: it has become easy to manage digital signage in most CMSs. But more complex concepts need more professional expertise than before. We are seeing a collapse of mid-sized integrators who will need to grow or become niche.

• WHICH COUNTRIES IN LATIN AMERICA ARE

HAVING MORE GROWTH IN THE DIGITAL SIG-

NAGE INDUSTRY? WHAT GLOBAL TRENDS

ARE BEING KEY IN THE INDUSTRY IN TERMS

OF CONNECTIVITY?

The most relevant markets are Mexico, Chile and, in normal times, Brazil and Argentina. Also Colombia and Panama are more mature than most of the neighboring markets. We observe that the higher the e-commerce penetration, the better digital signage grows.

At first glance, you would expect e-commerce to replace physical commerce. But digital and online signage are data-driven and require a digital mindset, both on the consumer and business side.

• WHAT MESSAGE OR ADVICE WOULD YOU

LIKE TO GIVE TO BUSINESSES FOR THIS 2022?

To strive in the market and survive, digital signage integrators need to offer more than just technology. Getting out of the technology comfort zone, analyzing customer and business needs and developing concepts will be critical. Ideally, digital signage integrators become trusted partners, not just service providers.

• WHAT ARE THE MAIN TECHNOLOGICAL

TRENDS THAT PREVAIL IN THIS 2022?

LED is still the main trend, but also digital experience and everything with data.

“THE GREATEST CHALLENGE FOR THE SECTOR IS TO MAKE DIGITAL SIGNAGE SERVICES INTO SOMETHING ESSENTIAL FOR ORGANISATIONS, THIS WOULD ENCOUNTER A VERY STRONG ORGANIC GROWTH FOR THE BUSINESS”.

Joaquim Lopes

Director 4yousee

• WHAT IS YOUR PERCEPTION OF THE INDUSTRY?

It is an industry that seeks to make up for the delay, which is moving at a fast pace that I have rarely seen.

As if much of what was held back during the most difficult times of the Covid-19 pandemic now needs to be accelerated and implemented quickly.

However, despite increased movement, the sector continues to be impacted by rising equipment costs, reflecting reduced production capacity, exchange rate devaluation in the Latin American region and a significant increase in logistics costs for imports.

• HOW DO YOU ANALYZE THE COMPANIES THAT

MANAGE DIGITAL SIGNAGE SCREENS?

It is a growing sector. It is evident in recent years the increase in the number of screens in different environments, either to inform, enhance the shopping experience and product experience, or sell advertising.

In my opinion, the biggest challenge of the sector is to turn digital signage services into something essential for organizations, this would mean a very strong organic growth of the business. Let me explain: a few decades ago the use of CCTV was something new and has long since become essential. No one opens a store today without installing a basic security and monitoring package. So it must also be with digital signage, we need to educate the market and demonstrate the ROI in digital signage, professionalize services and content, so that no new business is started or reformulated without a planned budget for digital signage.

• HOW WOULD YOU DESCRIBE THE EVOLUTION OF

THE INDUSTRY IN THE LAST 3 YEARS?

I think in the last three years we can talk more about survival than evolution. I think the digital signage business has proven to be important.

Companies suspended business or postponed contracting solutions during the pandemic, however, projects were not permanently closed and, as things got closer to normal, services were reactivated and new implementations were made.

EXPERTS / CONSULTANTS

We often hear that crises bring opportunities. This time was no different. The corporate communication business in industries, for example, grew a lot, as there was a need to create a lot of specific content on health safety, more specifically on rules on how to return to work during the Covid-19 pandemic without getting contaminated.

• DO YOU THINK THAT DIGITAL SIGNAGE CUSTOMERS

AND USERS ARE BECOMING MORE AND MORE IN-

FORMED ABOUT NEW TECHNOLOGIES IN THE MAR-

KET? HOW CAN THIS AFFECT COMPANIES?

I agree. They are professionals with a high level of knowledge about market solutions and interact with different suppliers before deciding to buy. It is quite common, in larger procurement processes, for solutions to be effectively tested in pilot projects.

• WHICH COUNTRIES IN LATIN AMERICA ARE HA-

VING MORE GROWTH IN THE DIGITAL SIGNAGE IN-

DUSTRY? WHAT GLOBAL TRENDS ARE BEING KEY

IN THE INDUSTRY IN TERMS OF CONNECTIVITY?

What I see is a very strong resumption of business in

Brazil and Mexico. These are countries with an extremely strong consumer market, which are very strategic for global brands looking to expand. I can cite the rise of end-consumer-facing services, such as fast delivery platforms and streaming services.

Before the pandemic, there were 2 or 3 very large companies in Brazil in each of these segments, for example. During the pandemic, a lot of big players came in, and they invested a lot in outdoor advertising, for example. In addition, very strong consumer markets usually demand massive investments at the point of sale, where it is necessary to differentiate and constantly improve the shopping and product tasting experiences.

In terms of connectivity, I often compare it to a very important road. As the road improves and becomes safer, the traveler experience improves.

On the other hand, there is the high-availability Internet that ensures data security and privacy that creates an ideal scenario for new applications and new digital services to be added.

This, then, means that we are doing it right and we will see more, and more of the smartphone and portable experience extend to digital signage screens: interactivity, real-time distributed content, virtual customer service.

LATIN AMERICA DIGITAL SIGNAGE MARKET RESEARCH REPORT • 2022 35