Journal of Retail Analytics Volume VIII, Issue 4 Bringing Research to Retail SM
Fourth Quarter 2012
ARTICLES PRI 4Q 2012 Retail Outlook: Lack of Confidence Leads Businesses and Individuals to Curtail Spending A Well-Balanced Meal: Creating Intercontinental Dining at Zurich Airport Yael Elstein, VP, Marketing, YCD Multimedia Do We Eat What We Cook? Stephen Nesbit, Managing Director, Prestonwood Trail Holdings LLC Employing Analytics to Optimize Your Digital Signage Message Dr. Stefan Menger, VP, Advanced Analytics, Scala Fútbol en Centros Comerciales (Soccer in Shopping Centers): Digital Network Engages Customers in Spanish Malls Juan Clotet, Managing Director, Venco Electrónica; Director, European Operations, PRI Impact of Digital Media and Video Collaboration on Course Evaluations: Extending Digital Signage Into the Classroom Dr. De’Arno De’Armond, Professor of Marketing, and James Webb, CIO, West Texas A&M University Mercedes-Benz Digital Signage Network: Making a Great Brand Even Better Paul Flanigan, VP of Communications, Pro-Motion Technology Group PRI Member Profile: Adaptive Video Walls & Displays Two West Creates Retail Momentum Through Engaging Digital Screen Media Interview with Ethan Whitehill, CEO, Two West When Times Are Tough, Build Market Share Robert Koolen, Advisor, EU Business Strategy, PRI
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U.S. Office: P.O. Box 158 Hinsdale, IL 60522 U.S.A. Phone: 312.265.6106 contact@plattretailinstitute.org
PRI North American Digital Signage Index Summary: 3Q (R) 2012
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Retail Sector Performance
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PRI Research Articles
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EU Office: Ctra d Mig, 75 08907 L’Hospitalet de Llobregat Barcelona, Spain Phone: [34] 931847755 juanc@plattretailinstitute.org
PRI Research Publications
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PRI Research Sponsorships
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PRI Resource Library
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Industry Events Calendar
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Contact PRI
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www.plattretailinstitute.org
Copyright ⓒ PLATT RETAIL INSTITUTE, LLC 2013. All rights reserved.
Plan Now to Attend the PRI Retail Forum Advancements in Digital In-Store Marketing February 26, 2013 12:30-5:30 p.m. Las Vegas Convention Center The PRI Retail Forum will focus on emerging trends and winning applications in customer-facing, in-store marketing technologies.
The Journal of Retail Analytics is published quarterly by Platt Retail Institute, LLC. Articles on relevant topics will be considered for publication. Request article submission guidelines. Managing Editor Margot Myers
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Learn about the In-Store Digital Signage Experience at Europe’s largest electronics retailer, with Ingolf Baron Von Wittken-Jungnik, Head of Digital POS Concepts, Media-Saturn-Holding.
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Take a look at 10 years in Digital Signage: A Review of Progress, Advancements, Winners and Losers, with Margot Myers, Director, Global Marketing and Communications, Platt Retail Institute.
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Discover the omni-channel marketing approach in the revolutionary AT&T Michigan Avenue Flagship Store with Christie Beals, Senior Manager, Retail Systems and Technology, and Tim Johnson, Senior Technical Director, Consumer IT and Strategic Innovation, AT&T.
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Examine Technology Trends in Retail Supermarkets, a hotbed of technology innovation, with Brett Bonner, Senior Director, R&D and Innovation, Kroger Corp.
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Understand the strategies and technologies that contribute to Creating an Omni-Channel Retailer with Raj Maini, Worldwide Director of Marketing, Digital Signage Intelligent Systems Group, Intel.
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Hear how a major retail bank has mastered Content Evolution and Omni-Channel Messaging with Jason Carey, VP, Brand and Advertising, and Suzanne Cutts, SVP, Brand and Advertising, Wells Fargo Bank.
The PRI Retail Forum is presented in conjunction with Digital Signage Expo 2013. Get more info and register to attend here.
PRI Members Platt Retail Institute (PRI) is an internationally recognized consulting and research firm that focuses on the use of technology to impact the customer experience. In an omnichannel environment, PRI works with its clients to develop marketing strategies to integrate various customer-facing technologies. PRI clients include retailers, media companies, financial institutions, hardware and software companies, educational institutions, and other businesses. We are grateful to the members of the Platt Retail Institute for their support. To learn more about PRI membership, please click here.
This document is not to be reproduced or published, in any form or by any means, without the express written permission of Platt Retail Institute. This material is protected by copyright pursuant to Title 17 of the U.S. Code. Copyright Š PLATT RETAIL INSTITUTE, LLC 2013. All rights reserved.
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PRI Members (cont’d.)
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PRI North American Digital Signage Index Summary: 3Q (R) 2012
Increase of 15.48 Percent in the Third Quarter is the First Positive Read in 2012 for North American Digital Signage Index
T
he Current DS Index increased by 15.48 percent, from 108.51 in the second quarter of 2012 to 125.30 in the third quarter of 2012. Comparing the third quarter 2012 to the third quarter of 2011, the Current DS Index increased by 5.83 percent. The Near-Term DS Index rose by 10.34 percent, indicating an increase in sentiment over the next 3-6 months.
Source: Platt Retail Institute
"This 15.48 percent increase is the strongest since this series began, and reflects the pre-election economic improvement seen in the U.S. economy generally," said PRI Director and Research Fellow Steven Keith Platt. "While we are impressed with the results for the third quarter, and anticipate a solid 2013, a general slowing in the overall economy dampens our expectations for the final quarter of 2012, which we anticipate will be flat to up only slightly." The complete 3Q 2012 PRI North American Digital Signage Index is available for $95 from the PRI Resource Library. The report includes 28 charts and graphs, and commentary about industry trends.
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Retail Sector Performance The following table and charts provide several perspectives on retail sales performance. An in-depth analysis is found in the Retail Economic Outlook, beginning on page 8. Table 1. Retail Spending
Retail Spending % Total Retail Sales & Food Services Excluding Autos Retail Sales
Nov.
Oct.
Sept.
Nov. Y/Y
2011
2010
2009
0.3
-0.3
1.2
3.7
8.0
5.5
-7.1
0.0
0.0
1.1
3.3
7.4
4.5
-5.7
0.2
-0.4
1.2
3.4
8.3
5.8
-7.9
Chart 1. Retail Sales and Food Service
Source: Haver Analytics
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Retail Sector Performance (cont’d.)
Chart 2. Retail Sales, Excluding Auto and Gas
Source: Wells Fargo Economics Group Chart 3. 12 Month Percent Change Income (Red) versus Retail Sales (Blue)
Source: Federal Reserve Bank of St. Louis
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PRI’s 4Q 2012 Retail Economic Outlook:
Lack of Confidence Leads Businesses and Individuals to Curtail Spending
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he U.S. economy grew by a better-than-expected 3.1 percent in the third quarter of 2012 (see Chart 1). Year-on-year, the economy grew at a 2.6 percent rate. The final quarter of 2012 will be weaker, in the 1.2-1.4 percent range (generally on par with the second quarter). Full-year U.S. GDP growth will land in the 2.2-2.4 percent range, perhaps a bit weaker than 2010’s 2.4 percent growth, and ahead of 2011’s weak 1.8 percent increase. Chart 1.
Source: Haver Analytics
The outlook for the U.S. economy in 2013 remains choppy, with perhaps modest growth in the 2.0 percent range expected. Headwinds continue to be weak job and income growth, increased taxes, household deleveraging1, and continuing tight borrowing conditions. Globally, the economy is also slowing. For example, the International Monetary Fund in October 2012 projected that the advanced economies will grow by only 1.5 percent in 2013 (see Chart 2). The Euro Area is anticipated to grow at an anemic 0.2 percent.
_____________________ 1
For those who are unfamiliar with the term, deleveraging refers to the reduction of the leverage ratio, or the percentage of debt on the balance sheet, of a single economic entity, such as a household.
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Economic Outlook (cont’d.)
Chart 2. Overview of the World Economic Outlook Projections
Source: International Monetary Fund
Perhaps the most onerous bull in the proverbial china shop is continuing uncertainty coming out of Washington. This lack of confidence is leading both individuals to curtail spending and businesses to defer hiring and investment. The recent misadventure over the fiscal cliff has exhausted many of us. An inability to lead, uncertainty over spending cuts and the debt ceiling, changing health care laws (which in some cases is leading companies to shift to parttime workers to avoid these costs), and onerous regulatory policies continue with no end in sight. The boom in natural gas in this country could be a major stimulus to the economy, so let’s hope the regulators don’t screw that up. As one commentator on point stated: “Fracking can do what 40 years of Democratic and Republican administrations in Washington could not do – make the U.S. energy independent.” Retail Sales In October, we released our holiday sales forecast. In contrast to the outlook of most other firms, which were generally looking for a 3-4 percent sales increase, PRI forecast a 4.4-4.8 percent gain. The difference between the consensus forecast, on the one hand, and that of PRI, on the other, was based upon the fact that we were of the opinion that most forecasts were overly conservative due to a focus on macroeconomic factors. On the other hand, PRI took more of a bottom-up approach, which considered, among other things, that retailers’ sales and after-tax profits were strong through the second quarter, and most were looking for a good holiday shopping season. In addition, an improving job and housing market, increasing household net worth, improvements in consumer sentiment, and a few extra shopping days this year were important factors that we considered. The holiday shopping season got off to a weaker-than-expected start, and early feedback was not encouraging. On December 26, 2012, for example, MasterCard Advisors Spending Pulse stated that 2012 holiday sales increased
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Economic Outlook (cont’d.)
by only 0.7 percent from last year. But subsequent information reveals that our forecast for a better-than-weak holiday shopping period was reasonable. Retail Metrics found that retail sales, excluding drug stores, increased 4.8 percent in December. The International Council of Shopping Centers estimates that its members will report an increase of 4.0 percent. Thomson Reuters I/B/E/S found that across 17 retailers including discounters, department stores and apparel chains, December sales at stores open at least a year rose 4.5 percent, better than the 1.6 percent growth in November 2012 and a 4.2 percent increase in December 2011. The National Retail Federation, on the other hand, found that holiday retail sales increased by only 3.0 percent. Online sales were up 14 percent for the entire holiday season, according to comScore; 11.1 percent according to Shop.org. Finally, holiday hiring in 2012 reached its highest level in six years. Numbers from the U.S. Bureau of Labor Statistics indicate that retailers hired 728,300 people between October and December, for an increase of 68,100 jobs, or 10.30 percent above 2011. It was the strongest holiday season for retail hiring since 2006, when seasonal employment in the sector was 746,900. The outlook for retail sales going into the first quarter is not encouraging. During the first week of January, chain store sales fell a strong 4.2 percent versus a 2.5 percent increase in December. Chain store sales have a 72 percent correlation with the change in retail sales at general merchandise stores. The Consumer Sentiment Index fell in December to 72.9 from 82.7 in November (see Chart 3). Consumer sentiment has a 61 percent correlation with the three-month change in real personal consumption expenditures. Tax rates will increase this year, and all workers will be impacted by increases in the payroll tax. Continuing uncertainty regarding government spending and the debt ceiling will cause businesses to continue to postpone hiring and investments. Chart 3.
Source: Haver Analytics
We look for the U.S. economy, and retail sales, to remain weak in the first quarter. Both will gradually improve during the second half of the year.
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A Well-Balanced Meal: Creating Intercontinental Dining at Zurich Airport By Yael Elstein, VP Marketing, YCD Multimedia
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f you were to ask travelers about the airport dining experience, most responses will vary from descriptions of average layover nightmares to graband-go food-court escapades with only minutes to catch a flight. This is all changing, however, with today's airports being more like malls than mere transportation hubs. People are spending a great deal of time in these increasingly commercial spaces and have more and more options on how to spend their time. From shopping and dining to business meetings and more, airports are being seen as places to be, rather than places to leave. This is all reflected in a shift of concerns for airport managers, who are investing significant sums and a great deal of effort into entertaining passengers, providing them with increased access to information and creating a more accommodating space. The concept of improving passenger experience is by no means a singular one, but increasingly we are witnessing many airports choosing digital signage as one of the primary means to improve services and create an accommodating atmosphere, with video walls, interactive signage, and wayfinding being some of the most prominent elements. Constructed in a unified and connected design, these elements help create spectacular effects that resonate with customers and deliver essential information to improve the travel experience. At Zurich Airport, the video wall installation at Upper Deck Restaurant is a prime example. Zurich Airport, Switzerland’s primary transportation hub and a major European gateway, handles more than 760 flights and more than 1,000 tons of cargo daily. In 2011, the airport served roughly 24.3 million passengers. What does this mean? First, that Zurich has a busy airport. Second, there is great commercial potential where a large number of travelers benefit from an experience that will ease the stress of travel while also providing convenience and value.
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Zurich Airport (cont’d.)
One of the main components of Zurich’s customer-focused push for creating an enhanced environment materialized when Autogrill, one of the world's largest catering business operations, decided to establish a new restaurant on the mezzanine floor of the Airport Center, surprising their guests with a new concept that fit the feel and utility of the airport’s improved design. The restaurant, with the very literal name of Upperdeck, opened its doors on May 4, 2012. At 366 square meters and a seating capacity of 230, the new open concept restaurant is visible from nearly all areas in the Airport Center. The main architectural feature of the restaurant is a 20-meter, mega-multi-vision video wall where diners can virtually travel to any point on the globe from the comfort a soft-backed chair and while enjoying a satisfying meal. Objectives For Upperdeck, it was essential that the video wall provide an aviation-related experience, with fascinating content that would enable diners to experience the spirit of travel inside the Airport Center. The creative concept focused on the view of landscapes and cities from above, while displaying a flight over a cloudy sky to evoke the in-flight feeling of sitting high above the world while seated at a table.
The aim, however, also had a more practical application focused on providing real-time operational information related to airport schedules and flight times. In order to accomplish this without sacrificing visual effect, the content style needed to be integrated with the creative concept. Upperdeck realized that creating an experience with practical purpose would provide travelers a memory to take home and information to make sure they got there on time. The Challenges One of the main challenges of the project was to create the spirit of flight, without actually flying. This isn’t a typical challenge for a restaurant, but as most travelers will attest, Upperdeck is far from typical. On the technical level, one of the most difficult parts of the project was to drive synchronization of 28 bezel-less screens – a hard task for any software-based project, when not using Genlock/Framelock hardware synchronization. The integration of content from multiple sources including real time content composition was solved using YCD's content management capabilities. The Solution The concept resulted in a 28-screen video wall at the restaurant, comprised of NEC screens that worked to convey the feeling of flight. Zurich Airport used the expansive back wall of the restaurant as a backdrop for the content to translate the objective design into a creative masterpiece.
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Zurich Airport (cont’d.)
The spirit of flight was achieved with unique content developed especially for the video wall – a balanced mix of fascinating destination shots and operational flight information. Alternating between rendered content providing schedules for arrivals and departures with video of clouds and destinations, the elements were arranged in an entertaining and smooth way, without disturbing or discouraging customers.
Driving the content across the video wall is YCD Multimedia's Messenger, an advanced digital signage content management and a playback engine known for its ability to play unlimited sizes of pixel-perfect content. This project follows a 2011 program that began integrating advanced display technologies, including video walls and collages in the Terminal 1 departure and arrival areas, displaying advertisements and flight information to increase commercial value. The same system is also in place at one of the airport’s main sports bars, where it is used to display live sporting events on several screens. Results Despite the short time since its completion, preliminary indications are that the project is having an overwhelming impact on visitors. Since the restaurant's architecture is very open and the video wall can be seen from many places throughout the Airport Center, and not only from inside the restaurant, the fascinating content contributes to the vibrant atmosphere of Zurich Airport, making the wait time more enjoyable and seemingly shorter, while attracting customers to enter the restaurant and the area around it. It should be noted that one of the project's basic ideas was to raise the attractiveness of the entire shopping area around the restaurant, and that has been achieved. A visit to the new Upperdeck restaurant is not only a "culinary high flight" but also a fascinating journey above the skies. "People are highly attracted by the huge video wall at the Upperdeck restaurant, and it creates a very pleasant ambiance while they are waiting for their flights," said Christoph Schröter, Head of Web Application Engineering, Aviation Competence Center, Zurich Airport. "The unique video wall
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Zurich Airport (cont’d.)
demonstrates the effectiveness of digital signage as both an entertaining and informative tool." "Modern airports are increasingly adopting digital signage, and the Upperdeck wall is a great example of using video walls for creating a unique customer experience, while at the same time conveying relevant information in real time," said Noam Levavi, YCD CEO. "This is a unique combination of extraordinary display, by size and content, which creates an atmosphere relevant to the restaurant's location and context."
Yael Elstein is the VP, Marketing, at YCD Multimedia where she is responsible for developing and leading YCD’s global marketing and communications strategy.
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Do We Eat What We Cook? By Stephen Nesbit, Managing Director, Prestonwood Trail Holdings LLC
S
am Walton, the founder of Walmart, had a favorite enthusiasm he used to try to drive into the employees of his company. He frequently challenged the company to “think like customers” in an effort to ensure that the company had an accurate view of what it was like to shop at a Walmart store. Once you understood the store from the customer’s perspective, you can work on selling more products. He, in essence, was challenging his employees to “eat what they cooked.” There are lessons the Digital Out-of-Home (DOOH) industry should learn from Sam Walton’s “think like a customer” approach as it relates to how shoppers consume media. We have decades of learnings about how Baby Boomers watch and react to traditional media ads on television, in print, and on the radio. In many cases, we have tried to transpose these learnings to new media offerings like digital signage. Although some aspects are useable, many others are not. The idea of new media solutions using traditional media learnings is even more irrelevant when one focuses on members of Gen Y and Millennials. The learnings from traditional media in general and the assumption that these younger audiences map to the behavior of Baby Boomers are leading us down the wrong path to success for DOOH. This is not a trivial issue. Gen Y and Millennials consume media in significantly different ways from the media of generations that precede them. Add to this the fact that within the next decade, Gen Y and Millennials will represent nearly 75 percent of the work force in the United States with the associated life cycle purchasing power. How they consume media and how they shop are vital to the success of any new media offering such as digital signage and other DOOH. Gen Y and Millennials are multi-tasking, connected, and digital. Unless we appreciate this and design it into our digital signage networks, we will fall short of our success goals with these demographics. I was sitting in the den the other day with my teenage son and we were (at least I can say I was) watching a football game on television. While I was sitting there absorbed in the game, my teen was involved in many more activities. He had his MacBook sitting open on the coffee table while texting on his iPHONE and somehow he was also watching the game on television. An important play in the game was being reviewed by the replay referee and I took the opportunity to see if he really was watching the game by asking him if he thought the receiver caught the pass under review. Surely there was no way that my teen could have seen the play in the middle of a text message and surfing the net. So I asked “did you see that?” He, of course, responded “yes.” Not believing that he really saw the play, I quizzed him further by asking what he saw. My teen then said, “He was in, he got both feet down before going out of bounds.” As it turns out, he was 100 percent correct. Not missing a beat of his text messaging, surfing the net, watching the game on television,
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Eat What We Cook (cont’d.)
and talking to me (his biggest annoyance, by the way) he multi-tasked his way through the afternoon. Ironically, most people in charge of digital signage companies are NOT Gen Y or Millennials. We are Baby Boomers that are designing, running, and strategizing content, measurement and the operation of the digital media networks. Gen Y and Millennials are watching digital signage content and networks today and will be watching even more so over the next decade. Yet do we REALLY understand how these younger audiences consume media and how they make buying decisions influenced by the media that they see? Do we understand how they consume media enough to insure that the way we create these networks actually is connecting with the audience?
Steve Nesbit has been in the DOOH Industry since the mid 1990s. He currently owns his own DOOH advisory service. He has also advised a Private Equity firm active in DOOH as well as assisting two M&A firms that are active in DOOH.
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I asked a series of questions at a speaking engagement at a digital signage conference a couple of months ago and my suspicions were confirmed. I asked by a show of hands how many in the audience had smart phones. The answer was encouraging with well over 75 percent of the audience raising a hand. When I then asked how many received email as well as text messages the sample shrank to about half of the audience. When I asked how many used Facebook and/or Twitter, less than a third of the audience raised a hand. I then put a picture up on the presentation screen taken from the viewpoint of a teacher in a college classroom today looking out into the student audience in a semi-circular tiered classroom. EVERY student had an open Apple Computer sitting on the table in front of him or her, taking notes and using social media simultaneously. When I then compared that photo to the audience of over 200 attendees at the conference all sitting at tables listening to the presentations, it because painfully evident that most were taking notes on a pad of paper using a pen or pencil and clearly not connected or digital. Unfortunately, this was a room full of executives from the digital signage industry trying to figure out why the industry was not growing by the leaps and bounds we have all anticipated for years. You can connect the dots – are we eating what we cook? We need to take Sam Walton’s advice to “think like customers” and we need to “eat what we cook” for the digital signage industry to reach its potential. Unless we live the lives of our customers and understand how they consume media, our chance for overwhelming success in digital signage is uncertain. With Gen Y and Millennials growing to be the dominant consumer segment over the next number of years, a total appreciation of how these groups consume media and shop and a translation of these learnings into how we design, create, and run our digital signage networks is fundamental to the industry’s success.
Employing Analytics to Optimize your Digital Signage Message By Dr. Stefan Menger, VP, Advanced Analytics, Scala Inc.
Half the money I spend on advertising is wasted; the trouble is I don't know which half. –John Wanamaker (1838-1922)
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n this quote, John Wanamaker, a famous Philadelphia department store merchant, highlights two of the fundamental challenges in marketing: influencing customer purchasing behavior and obtaining measurable results.Throughout human history, the most effective way to target customers and to sell specific products has been to create a personalized shopping experience. Most merchants used to know their customers personally, which meant they could tailor their promotions based on their knowledge of the consumers’ personal preferences and influence them at the point of decision. Also, these merchants had the luxury of an immediate “measurement” on the effectiveness of their sales pitch. The transition to big retailers, over the past 100 years, has all but extinguished the personal relationship between retailer and customer. Trying to create effective marketing campaigns has become a major challenge because the opportunity for an individually targeted approach has all but disappeared. As Mr. Wanamaker remarked, so too did the measurability of the marketing’s effectiveness. Many “brick & mortar” retailers are limited to traditional marketing: print media, static signs and posters, radio and TV ads and direct mail campaigns. Even where technically possible, customer-specific marketing takes a lot of time, effort and money. Further, it is difficult to establish a direct correlation between conventional marketing and corresponding purchases. For over a decade, online retailers have been using methods and techniques to send their customers personalized offers and specific advice, not unlike merchants from the past. Popular e-commerce sites like Amazon.com use targeted up-sell messages such as “Frequently Bought Together” and “Customers Who Bought This Item Also Bought” lists. The marketing departments of these online retailers draw on three major advantages over “brick & mortar” stores: •
Websites are inherently interactive – the viewer actively clicks on a link to access a page – and that data collected yields valuable information about a potential customer looking at a certain web page at any given point in time.
•
The internet is a very flexible medium which allows for the creation and deployment of a multitude of specific messages, in the form of online content or sending marketing material through email, at a reasonable cost.
•
The effectiveness of displaying certain ads online can be measured by correlating the digital messages with purchases resulting from the very same page.
Likewise, retail stores typically collect a trove of valuable data (point-of-sale data, with details including location, date and time, baskets broken down into single items and coupon redemptions) containing exciting information about customer purchasing behavior. As a flexible, customizable store-based medium, data-driven digital signage can bridge the gap between traditional media and online marketing. As a
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Employing Analytics (cont’d.)
critical component of an Omni-Channel marketing strategy, digital signage is most effective when messaging is optimized. Using analytics to enhance digital content and selecting the best possible message will unleash the full potential of this versatile and cost-effective medium. Scala uses best-in-class adaptive learning algorithms that have been tested and commercially deployed successfully in many similar direct-marketing optimizations. The combination of these powerful algorithms and the versatile digital signage content management system creates an efficient, cost-effective solution previously not available in the digital signage domain. Adaptive learning algorithms digest data originating from many different sources (point-of-sale data, location-marked and time-stamped digital signage playlist schedules, conventional marketing calendars, and any other available data such as customer loyalty card information, customer in-store dwell times, de-identified gender and age-group detection, or even external information like weather or gas prices) to find patterns and establish relationships between the different factors. These patterns and relationships are then used to determine the most effective digital signage message for any given location and time slot. The optimization process follows a “Learn – Optimize – Deploy – Measure” cycle. Based on historical data, the automated optimization engine determines the best playlists, which are then deployed over the digital signage system. The sales results are recorded, and the resulting data is fed back into the optimization engine for the next iteration. The optimization engine learns with each turn of the “cycle” as seen below and the effectiveness of the digital messaging becomes more optimized and targeted.
In any activity involving gathering, storage, and processing of personalized data, privacy is an important consideration. Individuals are often happy to hand over even very private information to organizations like social networks. However the same individuals can see the gathering and usage of personalized data for specific marketing actions as very problematic. It is important to note that personalized information is not required for the methods
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Employing Analytics (cont’d.)
described above to be successful. While information specific to the individual customer can certainly be helpful to further increase the accuracy of the optimization, the point-of-sale data (with any personal information removed) typically offers enough information for the system to perform the message optimization. A renewed focus on customer experience management highlights the perceived challenges that the retail industry faces today. Individually engaging customers on the same personal level as vendors of the past can increase sales and counteract shrinking profit margins. An analytics-driven digital signage solution takes all available data and applies the “Learn – Optimize – Deploy – Measure” cycle to optimize messaging. In our pilot deployments, we can already detect strong patterns of distinct purchasing behavior and changes in sales related to optimized messages. These signals enable the system to hone and further optimize digital messaging. We will report more detailed results in a future issue of PRI’s Journal of Retail Analytics.
Dr. Stefan Menger serves as Vice President, Advanced Analytics at Scala Inc.
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FĂştbol en Centros Comerciales: Digital Network Engages Customers in Spanish Malls By Juan A. Clotet, Managing Director, Venco ElectrĂłnica; Director of European Operations, PRI
F
Ăştbol en Centros Comerciales (Soccer in Shopping Centers) is a digital signage channel for shopping centers which, thanks to a split-screen system, accommodates both sports programming and advertising content. Neo Advertising Spain manages the channel, which is present in some of the major shopping centers in Spain. The primary objectives of the network are generating traffic to the shopping malls, promoting customer loyalty, and increasing sales. The right side of the screen broadcasts advertising content, and is designed to generate revenue to finance the channel. The inclusion of advertising sales based on a split screen is a methodology that has been used in various countries around the world, and it has been shown to help to attract an audience.
The left side of the screen broadcasts primarily football matches (known in the U.S. as soccer) including the Spanish Championship and Champions League and other competitions. Other sports such as F1 auto racing, tennis competitions, the Tour de France, or Moto GP also are broadcast. The football and advertising content are complemented with news, weather information, sport news, and promotions of the mall. Neo Advertising installed the double screens in strategic points in the food court area of the malls, with the purpose of attracting the maximum audience. Food courts are open Saturdays and Sundays and are the place where customers spend more time, so they are the best place for the screens. The LCD screens are 46 inches and offer a perfect brightness and viewing angle suitable for watching the game in an optimum way. The channel uses facial recognition to analyze the audience and to provide accurate data to advertisers on the impact of their campaigns. Acording to the latest statistics, the channel has an audience of 2 million viewers per month. As
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Football in Spanish Malls (cont’d.)
this is an advertising-supported network, we have opted for audience measurement as a tool to differentiate the network from other advertising options. In digital signage projects, facial recognition helps us to provide real audience data to advertisers. One of the biggest concerns of marketing departments is maximizing ROI, so our goal is to equip them with the tools for measuring digital signage audiences. The service is developed and managed by Neo Advertising. The screens were developed by DS Digital Screens, and allow integration of other technologies such as mobile and social media. Neo Advertising is also the entity responsible for the marketing of advertising content. The channel has a control center that operates 24 hours a day/7 days a week with the objective of resolving any issues that might arise in the shopping malls where the network is located. The Futbol en Centros Comerciales project began in the middle of last year and hasn't stopped growing since then. Currently, the channel is installed in more than 30 shopping centers in Spain with more than 200 screens and it is present in the most important communities of Spain, such as Madrid, Catalonia, Andalusia, and the Basque Country. In the coming years, the project is expected to grow to include more than 500 screens. Growth in Visits (x100)
Growth in Impressions (x100)
The advertising strategy focuses on attractive content to get the attention of the people visiting the malls. Local residents make up a high percentage of the people who visit the shopping centers, so brands have the opportunity to impact a large number of potential clients through this channel. And the attention to the screens is guaranteed with the football content and these attractive advertising messages. Advertisers have the option to make their publicity campaigns national (across the entire network) or they may designate selected regional or local coverage to a limited number of screens. In Spain, football is the content that attracts the largest audience. When a match starts, the number of visitors increases, and the sales in stores rise, too. Football has attracted record audiences over the last 25 years, and football matches make up 22 of the 25 most-seen TV shows at home. Also, 66.7 percent of 300 individuals surveyed stated that after seeing their favorite team win, they would make a non-planned purchase in order to celebrate the victory. Audience measurement Since May 2012, OJD Interactiva has been auditing the audience of the Fútbol Centros Comerciales digital signage channel. The audience measurement is based on Trumedia’s AlliO facial recognition technology. Special sensors gather traffic information, attention to the messages shown, and even the gender and age of those viewing the screens. These sensors are placed on all of the screens in the network in order to measure the total audience. Based on this information, OJD Interactiva certifies the size of the audience every month.
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Football in Spanish Malls (cont’d.)
To conduct the audience measurement, we have relied on the metrics published in the white paper, “Digital Signage: The Fourth Screen,” edited by IAB Spain. With these metrics, OJD has developed technical standards to audit digital signage networks. The AlliO audience measurement system is used to automatically detect and track viewers' faces as captured by high-resolution, wide-dynamic-range sensors. Relying on proprietary video analytics technology, the AlliO system generates true viewing data for digital displays and screens by analyzing facial images of people watching the displays. The system is easy to set up and operate.
This measurement system provides more than just viewer counts. Demographic segmentation and measurement of the amount of time a viewer is facing the screen allow better media planning and targeted advertising. Viewer counts, behavior, and demographics are obtained in real-time and can be used in the media streamer to select and possibly modify the advertisement, tailoring it based on information captured by the system. Juan A. Clotet is the Managing Director of Venco Electrónica in Barcelona, Spain. He also serves at the Director, European Operations, for the Platt Retail Institute.
22
The system uses a unique wide-dynamic-range sensor that can detect viewers at wide angles of up to 125 degrees. The sensor provider’s privacy policy ensures that it will not record, share, or store any images or personally identifiable data. For Neo Advertising, it is important that the efficacy of digital signage be supported by data and for this reason, the company has committed to measuring and auditing the results achieved by the Futbol en Centros Comerciales network. With the numbers in hand, digital out-of-home advertisers will more readily accept the efficiency of digital signage and will invest more money in this technology.
Impact of Digital Media and Video on Instructor Course Evaluations: Extending Digital Signage Into the Classroom By Dr. De’Arno De’Armond, Professor of Marketing, and James Webb, CIO, West Texas A&M University
Introduction and Overview West Texas A&M University (WTAMU) seeks to sustain a high-quality learning environment through the use of digital media and video collaboration. Within the class environment at WTAMU, professors teach a variety of courses invoking different delivery methods. Professors may at times teach a classroom-based course in a traditional lecture setting, and simultaneously teach the same course to a different group of students in an online environment. The same learning management system is deployed to manage each course, however, it has been noted over time that there remains a pedagogical difference between online and traditional in-class delivery. It is not uncommon to see instructor and course evaluation scores differ significantly between the delivery and pedagogical methods. Today’s generation of students and the technology in play have changed dramatically over the past decade. The cloud, social networking services, and the explosion of video and mobile devices are creating new opportunities for IT to drive business value, reduce expenses, remain relevant, and stay connected with our customers. According to the latest Educause Center for Applied Research (ECAR) study, technology plays a major role in making the learning experience more engaging, more immersive, and helps students feel more connected. The study also reports that students prefer blended learning environments and actually learn more this way. As one student respondent put it, “make the technology more integrated into the learning environment and use more than just PowerPoint.” If we’re going to be successful and provide this type of environment, one that students already want, it absolutely has to include today’s collaborative video technologies. Video is one of those technologies that everyone immediately understands and combining web-based video collaboration with traditional face-to-face course delivery can have the most immediate impact. Challenges At WTAMU, we have utilized digital media systems in the hallways and around the campus to push information to students. Knowing that informational push is merely one aspect of digital media, an idea arose between academics and information technology to take digital media into the classroom to push video and information to the students during lectures in a way that supports the course lecture. Thus, the pedagogical gap of deploying video and lecture in class and online are more similar in deployment, e.g., the online student experiences and has access to the same materials and lecture as those of the student sitting in class.
23
DS in the Classroom (cont’d.)
Solutions We are using video technologies to strategically engage students in their academic life and increase their overall chances of success. Last year, we began to deploy Cisco’s Lecture Vision in the classroom and WebEx became available to the campus, which is used to connect and engage students in exciting new ways. Academic departments have begun to leverage this powerful tool in programs such as the MBA program, which has made WebEx a requirement as part of the portfolio course to facilitate learning objectives such as professional and oral communications. After posting a series of video lessons from an online marketing course, one student provided the following feedback, “with the most heartfelt emphasis possible, I want to thank you for taking the time to create a video instruction for this assignment. This video tutorial has eased some of my negative feelings about this assignment.” Two primary questions and concerns were examined to address the following: •
The implementation and use of digital media systems and video are hypothesized to bridge the gap between ratings of instructors for courses delivered in the online and/or traditional in-class methods.
•
The implementation and use of digital media systems and video are hypothesized to bridge the gap between overall course ratings of courses delivered in the online and/or traditional in-class methods.
Measuring pre- and post-outcome effectiveness Students have an opportunity at the end of each semester course to evaluate instructor performance as well as the general overall course. Students in the classroom are given the Mark Reflex Scantron evaluation common in most American university settings, whereby the student is asked a series of 21 total questions scored on a four-point Likert scale of agree strongly, agree, disagree, disagree strongly. Students then have the opportunity to interject in an open statement format on the back side of the survey instrument. Students in the online courses are administered the same questions and have the same format albeit electronically submitted. Among the many constructs tested with this survey instrument, two are of major importance to the evaluation process – instructor rating and course rating. Instructor and course ratings are gathered and electronically summarized on a four-point scale with zero being the lowest rating and 4.0 being the highest rating. Traditionally at our university, instructor macro data suggests a divide and inconsistency in evaluation data between courses taught in the classroom environment and those classes taught in the online environment with a negative bias being indicated to the latter. Data were gathered and analyzed for two business courses (advertising and financial planning) whereby the professor agreed to deliver consistent pedagogy over a period of Spring 2008-Fall 2011. In the Fall 2010 semester, web-based video and digital media would be introduced into the classroom environment to supplement instruction, clarify assignments, and provide remote guest lectures. Instructor and course evaluation data points for each semester a course was offered throughout the period were analyzed and recorded. Table 1 represents data points gathered for a marketing class in advertising. Table 2 represents the data points gathered for a financial planning course. It should be noted that Table 2 is less extensive due to the teaching rotation schedule of the course offering.
24
DS in the Classroom (cont’d.)
Results Table 1. Instructor and Course Evaluation Data Spring 2008-Fall 2011 Spring 2008 Instructor Score Course Score Principles of Advertising (in class)
3.52
3.23
Principles of Advertising (online)
3.17
3.26
2.74
2.69
2.50
3.06
2.50
3.06
3.34
2.96
Principles of Advertising (in class)
3.56
3.44
Principles of Advertising (online)
3.41
3.26
Principles of Advertising (in class)
3.79
3.03
Principles of Advertising (online)
3.60
3.50
Fall 2008 Principles of Advertising (online) January 2009 Intersession Principles of Advertising (in class) Spring 2009 Principles of Advertising (online) Fall 2009 Principles of Advertising (online) Fall 2010(Video Implemented)
Fall 2011
Table 2. Instructor and Course Evaluation Data Fall 2009-Fall 2011 Fall 2009 Instructor Score
Course Score
3.61
3.46
Financial Planning (in class)
2.72
2.46
Financial Planning (online)
2.25
2.50
Financial Planning (in class)
3.77
3.51
Financial Planning (online)
3.58
3.28
Financial Planning (in class) Spring 2011
Fall 2011(Video Implemented)
Discussion The effect of video on instructor course evaluation scale sets At WTAMU, we have built a technology infrastructure on four main pillars,1 actively engaging the best technology currently available in the enterprise marketplace today. One of those pillars is engagement. Video collaboration in the classroom via digital media systems has helped professors engage students and stabilize instructor evaluations over time in both the traditional classroom setting and the online classroom setting.
25
DS in the Classroom (cont’d.)
As an example, a financial planning course taught both online and on the ground in the College of Business, historically saw instructor evaluation ratings hovering around 2.5 on a four-point scale prior to video implementation in the classroom. After video implementation, instructor evaluation scores have risen and stabilized above 3.5 on a four-point scale holding other course delivery variables constant. In a marketing course on advertising taught both online and on the ground, instructor course evaluations were inconsistent historically and varied over time, from low scores of 2.5 on a four-point scale. Holding pedagogy as consistent as possible, the introduction of video in the classroom has stabilized instructor course evaluations over the introduction period in both the online and classroom environments to a level consistently above 3.0 on a four-point scale. The effect of video on the course through course evaluation scale sets Just as the student has the opportunity to evaluate the instructor during the course evaluation process, there is also data captured to evaluate the overall course experience. Video collaboration has been a key driver shown to increase the overall perception of the course in the minds of students. As an example, the same financial planning course mentioned above showed inconsistent ratings on a four-point scale holding pedagogy constant. Prior to the introduction of digital media and video collaboration, course evaluation scores ranged from a low of 2.4 to a high of 3.4. After the use and implementation of video deployment, course evaluation scores have stabilized to a level above 3.2 for the most current reporting period. The same case can be made for that of the advertising course mentioned above as well. Prior to the implementation of digital media and video collaboration, course evaluation scores ranged from a low of 2.6 to a high of 3.2 on a four-point scale. After the use and implementation of video deployment, course evaluation scores have stabilized above 3.0 with little variation showing in the most recent reporting period. While one can argue other factors may be inducing the results, it should be noted that much care and attention was given to the pedagogy, method, and delivery of each course over the period Spring 2008-Fall 2011 in an effort to create consistency for future benchmark comparison. Data for instructor and course evaluations are gathered either in person via third party or online via electronic submission and at no time does the faculty member have access to the surveys or information until results are compiled and assessed through the university office of planning and analysis. The impact of video on instructor and course evaluations between different delivery methods There is no doubt that with regard to the aforementioned financial planning course, digital media and video implementation narrowed the instruction and course evaluative gap. Whether taught online or in the classroom, the instructor evaluation data points indicate less than two-tenths of a point difference between in-class instruction and online instruction, 3.7 and 3.5 respectively on the four-point scale. With respect to evaluation of the course in general, the same can be said that the level stabilized and the gap narrowed
26
DS in the Classroom (cont’d.)
in-class and online post video implementation to 3.5 and 3.3 respectively on the four-point scale. Conclusion Adding digital media and video collaboration to our classroom environment is a natural extension of the current digital media system and provides the blended learning environments that students have been asking for. Not only does this make the technology more integrated into the learning environment and go beyond PowerPoint, but it also provides a better delivery methodology and pedagogical option for our faculty as well as a better experience for our students, an experience that helps our students feel more engaged and more connected. Some of the most valuable lessons that we’ve learned along the way include:
Dr. De’Arno De’Armond is the Hickman Professor of Marketing at WTAMU.
James Webb is the W TA M U Chief Information Officer and a part-time instructor for Computer Information Systems.
•
Have a strategic vision and a strong sense of urgency. IT has the power to positively improve student engagement and impact student outcomes. Empower the campus and give them control.
•
Communicate the vision to the leadership team and convey the sense of urgency to IT. As Jim Collins, the author of Good to Great, points out, you’ve got to get the right people on the bus and in the right seats before you go anywhere. Find technology champions throughout your organization to promote these initiatives and make them real.
•
Understand the culture of your organization. “This is the way we do things around here” and if you’re going to change the process, you’ve got to demonstrate performance improvements, and help people understand why this is better.
•
Make it personal. Whether the content is delivered in the classroom via digital media systems and/or lecture presentations or in the online format, tailor the messaging and delivery to the audience in a manner to which they can relate.
•
Recognize that today’s generations of students prefer to learn through digital content. (Stop, Play, Fast Forward, Search, and Rewind….)
The cloud, social networking services, video, and mobile devices are here to stay. It’s important that we listen to our students, faculty, and staff to find out what their needs and preferences really are and how technology can continue to enhance the overall learning experience.
_________________ 1 Journal
of Retail Analytics, Second Quarter 2011, Volume VII, Issue II, “Digital Media Systems in Higher Education: The Case for Engaging and Retaining Students.”
27
Mercedes-Benz Digital Signage Network: Making a Great Brand Even Better By Paul Flanigan, VP of Communications, Pro-Motion Technology Group
W
hen you have what is arguably one of the best-known brands in the world, how do you get a return on the investment in digital signage? Perhaps a better question is: How do you give one of the best-known brands in the world the ability to get better with digital technology? You begin with the end in mind, focusing on the customer and how to make the experience of buying a Mercedes-Benz vehicle as enjoyable as the experience of owning and driving a Mercedes-Benz vehicle. So, with that in mind, what was the impetus for adding digital signage to Mercedes-Benz dealer showrooms? “The vision of interactive digital signage was to give the dealers a stronger connection between the brand and the customer, to bring everything Mercedes-Benz has to the customer’s fingertips immediately,” said Debbie Eliopolous, Digital Dealership Lead of Mercedes-Benz USA. Creating brand equity within the customer mindset was the reason MercedesBenz USA decided to create an interactive experience called the “Visualizer” in its North American showrooms.
It’s a challenge to expose the customer to every available feature of an automobile, even with print brochures at hand. It’s even more challenging when motion is required to demonstrate a vehicle’s capabilities, such as adaptive braking or Attention Assist. With dozens of models and hundreds of options, the task of tailoring the ideal vehicle for each customer is monumental. It is also the most important goal to achieve, for the sake of the customer – and the brand. Mercedes-Benz wanted to bring more interactive engagement to the shopping experience, to bring the complete brand to the forefront, and to give customers an all-access pass to their ideal car or SUV. The Visualizer is an engaging immersion into the Mercedes-Benz driving experience, from accessories and options to safety features. The customer can
28
Mercedes-Benz (cont’d.)
scroll through items, watch videos, and learn about virtually everything Mercedes-Benz can put into a vehicle, all at the touch of the screen. Pro-Motion Technology Group partnered with All Things Media to develop the engagement between the brand and the customer. All Thing Media developed the content experience, while Pro-Motion tackled technology, logistics, and network management. Scala’s software platform supports the experience, enabling the customer to interact with Mercedes-Benz, to learn about different vehicle features, options, and accessories, and to enable the customer to customize a vehicle.
The Mercedes-Benz brand, renowned for its style and design, is brought to life digitally with a massive archive of content, ranging from still images to animated features to full-resolution videos. Some customers may want to learn more about the safety features, while others may dig deeper, exploring interiors, accessories, even the color of the paint. The path is defined by the customer’s behaviors with the experience. An incredible amount of research went into the right touch-screen technology to deliver the optimal experience. The term “touch-screen” has multiple meanings, with different technologies delivering different outcomes. A big factor in technology was supporting the demands of the content. In order to show a variety of content types (still images, audio, full-motion video, animations), the technology had to accommodate several formats, all while supporting culturally intuitive touch behaviors, such as touch selection and swipe actions. The final experience had to be intuitive to the user. “It was really about making this experience completely endemic to the Mercedes-Benz brand and dealership, and making it easy for the customer to use,” said Russ Browne, COO of Pro-Motion. “Mercedes-Benz has a vision, and we are able to bring that experience to life in the dealership.” After finalizing the entire experience, Pro-Motion tested in select markets, then deployed 385 kiosks to 354 locations across North America. All of the kiosks are remotely managed, with updates occurring regularly behind the scenes to ensure that every kiosk has the latest version of the experience that MercedesBenz USA wants to bring to the customer.
29
Mercedes-Benz (cont’d.)
Getting Closer to the Customer How does such a well-known brand get better? Mercedes-Benz leverages the technology to learn more about every customer. The digital experience brings the customer closer to the brand, inspiring the customer on the “art of the possible” with every Mercedes-Benz vehicle. But, Mercedes-Benz gets just as much out of it as the customer puts into it. Within the kiosk experience, the customer can select certain options and accessories and add them to a Wish List, then have this list emailed to him. This opens a channel of communication that extends beyond the showroom. Mercedes-Benz can develop a relationship with the customer, going further in providing detail on what the customer is looking for, offering additional and complementary features that may interest the customer based on the items in the Wish List. The interactive experience has Google Analytics embedded in the programming. This gives Mercedes-Benz the ability to accurately measure what is being chosen, what is ignored, and provides geographic information on where this behavior is taking place. Based on real-time feedback, MercedesBenz can see what products are being viewed most often, and what products customers do not consider as part of their ideal vehicle. The data reveals what combinations of products are being selected for review, giving Mercedes-Benz the opportunity to consider product treatment that moves the customer closer to a sale, especially when customers in different parts of the country have different ideas about what constitutes the perfect Mercedes-Benz automobile. “It is easily one of the most critical parts of the experience,” said Ms. Eliopolous. “We know what customers in New York like about Mercedes-Benz compared to customers in Los Angeles. And when you have such geographic and cultural contrast, this information gives us incredible insight and knowledge about what people are looking for in an automobile. One size does not fit all. With a substantial product line, we can discover and deliver the perfect vehicle for the customer, wherever he or she is.” A key benefit to this data is course-correction. If some products are heavily investigated, those products can be given greater attention to bring more information to the customer. The experience can be modified quickly to tap into that interest. By creating a virtual showroom, every single dealership has access to Mercedes-Benz’s entire line of vehicles, accessories, and options. And all dealerships will have an experience unique to their geography and customer demographics. The combination of the right experience in the right showroom in the right location brings the brand closer to the customer than ever before. The formula for success is an example of what can be found in any project where the end result is greater engagement and sales. Brands of all shapes and sizes realize that digitally empowered consumers have more knowledge at their fingertips then ever before. They must complement that knowledge with brick-and-mortar experiences that give customers even greater insight into how products fit into the customers’ lifestyle. This, in turn, helps Mercedes-Benz continue to differentiate itself from all other automobile brands. The more customized the experience can be for the individual customer, and the more knowledge the brand can gain from the interaction, the better the chance that the experience results in a sale. Technology must be vetted out as specifically as possible to ensure that the vision of the experience is executed. While the strategy of relevance carries the project, the technology must support the initiative.
30
Mercedes-Benz (cont’d.)
Finally, and perhaps most importantly, it’s critical to remember that the client is the customer. It’s where all of this effort leads to the desired return on investment. The digital signage industry has taken notice as well. The “Visualizer” was awarded Gold at the Digital Screenmedia Association’s Content Awards in November 2012.
Paul Flanigan is the VP of Communications at ProMotion Technology Group.
31
PRI Member Profile:
Adaptive Video Walls and Displays
A
daptive Technologies Group produces specialized mounting and rigging solutions that make it easy to install just about anything audio or video. The company, headquartered in Signal Hill, California, combines the talents and disciplines of Allen Products, ATM Fly-Ware and Adaptive Video Walls and Displays together under one roof. Allen Products is a leading designer and supplier of universal fit standard and OEM loudspeaker mounts, mounting loudspeakers to walls, ceilings, under balconies, to poles and vertical columns. ATM Fly-Ware is the world's leading designer of certified, preengineered professional loudspeaker rigging systems for permanent installations and live performances. Adaptive Video Walls & Displays creates digital signage video wall frames and structures that accommodate multiple LCD, LED, and Plasma monitors. Getting its first big break back in the ‘90s with the explosion of cinema surround sound speaker mounts, Adaptive (known then as Allen Products) quickly became the go-to provider of speaker mounting solutions for cinema applications worldwide, and subsequently branched out into many other areas in need of sound reinforcement such as theme parks, sport centers, schools, stadiums, retail establishments, houses of worship, and transportation centers. An opportunity to branch into large format audio rigging designs was presented with the purchase of ATM Fly-Ware in 2004, and thus Adaptive Technologies Group was formed. Combining the disciplines of mounting technology with rigging technology provides customers with one-stop-shopping for all of their live event and permanent audio installation needs. Within a couple of years, Adaptive directed its expertise in mounting and rigging solutions toward the emerging digital signage market where it began developing video wall framing for retail applications, such as at Hollister and Eddie Bauer stores. Adaptive’s interconnecting modular LCD video walls are becoming routine at many convention centers where marketers can show their wares in a biggerthan-life format. Video wall configurations such as 3X3s and 4X4s are common and some video walls are assembled into displays measuring up to 20 feet high. Building a Solution for the Orange County Water District Several years ago, the Orange County, California, Water District had a rear projection screen system installed in its meeting room, operating within a nonload bearing wall. This visual display system was in use for several years but, as with many rear screen systems, the staff at the Water District experienced legibility problems due low resolution and brightness. Installing a multi-screen video wall display using LED, LCD or plasma seemed out of the question because it would add too much weight to the non-load bearing wall. Further, reinforcing the wall to support the extra weight would be very costly and time-consuming. Adaptive engineers performed a site survey and found they could build a tubular structure inside the control room that anchored both to the floor and into the ceiling/roof structure. Such a structure inside the control room would serve as an artificial load-bearing wall supporting the weight of a multi-screen LCD video wall using Adaptive’s standard video wall framing system on the inside.
32
Adaptive Video Walls & Displays (cont’d.)
A study showed that the 60-inch Sharp V601 monitor would greatly improve the brightness and resolution and by placing nine monitors into a three-by-three landscape configuration, the viewing surface would be enlarged to 13’3” X 7’3”. This certainly was a vast improvement over the rear-screen system.
“This was a tricky installation,” said Terrence Aquin, the design manager at Adaptive, “because of the incredibly tight tolerances required to align thin bezel monitors together and because of the compound angles in the ceiling that we had to anchor to.”
33
Two West Creates Retail Momentum Through Engaging Digital Screen Media An Interview with Ethan Whitehill, CEO, Two West
S
hopper marketing firm Two West of Kansas City, MO, earned recognition in six different categories in the 2012 DSA Crown Awards for its digital work for Sprint. In this interview, CEO Ethan Whitehill talks about his company’s approach to creating digital content. Journal of Retail Analytics (JRA): When you’re working on digital content, where do you start? Whitehill: We start from the same place we start any project, whether it’s digital, print, broadcast, or web. It starts with emotion. To get it right, digital content – like any other retail messaging – has to begin from the shopper’s emotional state. We see emotion as the energy that drives retail commerce and what we call “retail momentum.” JRA: Do you consider emotion to be a driving force that impacts how customers behave when they are in a store? Whitehill: It’s a powerful force because it’s a catalyst for behavior. And to use this power, you have to understand it. It requires deep insight into the whole retail experience of the customer. How do customers feel about being in the store? Are they excited about making this purchase? Uncertain or overwhelmed by too many choices or product features? Restless or anxious about waiting their turn? In fact, even before a shopper enters your store – the instant she encounters your brand – there are emotions in play. Understanding those emotional states is critical. Then you can build on them, change them, shape the emotional experience as you shape the experience of engaging via the digital messaging you’re creating. JRA: How do you use digital signage to shape an emotional experience and change how a shopper feels? Whitehill: Digital signage can create a series of significant, surprising, spectacular moments. These moments are provocative; they capture attention and arouse reactions. Sprint offers lots of examples of this. In a Sprint store, shoppers experience all of the emotions I just mentioned. When Sprint started integrating more digital content into its retail store messaging, it created new opportunities to positively affect shoppers’ emotional states by delivering more of these provocative moments in a more dynamic way. JRA: What is your process for creating digital content? Whitehill: The first phase is planning. This is where we do a deep dive and get real, useful insights into the shopper experience, emotions, and motivations – all of which we use to develop our briefs. So this phase requires research: instore behavioral observations and shopper intercept interviews, competitive research, and third-party data. We consider that good old-fashioned homework and there’s really no substitute for it. No shortcuts. And part of this phase is evaluating the path-to-purchase.
34
Two West (cont’d.)
Digital Content Best Practices: 5 Ts Timely: Program messages by daypart, season, events, and weather. Ta r g e t e d : M a t c h demographic, psychographic, and geographic (hyper-local) profile of audience. Topical: Align content to reflect revenue, brand, and partnership priorities. Task-relevant: Connect stories with viewing context, audience needs and realistic user scenarios.
The path may span multiple channels. Often it begins with mobile or online, comparison shopping, and reading reviews. Researching the purchase. We know web traffic drives brick-and-mortar sales and even expansion of retail stores. In fact, at the 2012 Customer Engagement Technology World conference we heard this statistic from Paul Price, CEO of Creative Realities: 92 percent of commerce is still inside brick-and-mortar. But it doesn’t necessarily start there. So in designing the digital messaging experience, you have to step back and consider the shopper’s experience along the entire path, not just in-store. It’s important to think about where along that path the shopper is engaging with the digital display – point of wait, point of transit, point of sale? The strategy has to make sense – but it’s common sense. For example, you wouldn’t load up a bunch of benefit messages on a point-of-transit display, any more than you would on a billboard that will be viewed fleetingly. JRA: What else do you consider in the planning phase of your process? Whitehill: One other thing I would mention is the importance of integrating creative. It should be integrated with non-digital POP and other collateral and across mobile, print, web, and NFC channels. It sounds obvious. But it’s surprising how often digital content is treated as an island, without regard for all the other messaging the retailer is crafting for the same target audience. Maybe that comes from digital creative teams so often working in isolation. We’re fortunate to have blended creative teams who work on digital and traditional projects in tandem, so integration is native to our process.
Transactional: Communicate clear call to action – reserve, book, buy, share, review, recommend.
Creative concepting at Two West.
JRA: What is the next phase? Whitehill: Creation. Concepting, rounds of review and refinement, and production. Here’s where phase one pays off. Armed with deep insights and an excellent brief, the creative team uses all that information to create concepts that acknowledge, address, and – where needed -– alter the shopper’s emotional state in order to achieve a business objective.
35
Two West (cont’d.)
A member of the Two West motion graphics team constructs a 3-D model for Sprint digital.
JRA: How do you define what you want to achieve with your creative concept? Is the objective just capturing attention or offering a distraction? Whitehill: Sometimes a distraction is just what’s needed. Consider point-of-wait communications. Shoppers who enter a Sprint store have their names entered on a virtual queue that displays the order of customers waiting for service. We know that waiting can be a source of anxiety for shoppers. So we’ve enhanced the virtual queue with entertaining content, creating what we call “merchantainment.” It’s not just promotional messaging; it’s also fun and engaging stuff like trivia, tips, jokes, and even games. This is a successful strategy for relieving anxiety, reducing perceived wait times, and improving customer satisfaction. The virtual queue employs best practices for digital content; timeliness would be a good example. Evergreen content is useful, but programming messages by daypart, season, events, or even weather is also important. Timely, topical content plays to one of the strengths of digital signage: how easy it is to update content on the fly, compared with switching out print signage with its production lead times. You can also localize messages to a targeted audience more easily with digital. JRA: Can you give an example of how this kind of targeted messaging might be used? Whitehill: During basketball season we added an NBA trivia game to the virtual queue to promote Sprint’s sponsorship of the NBA. That was timely and topical. The launch of the HTC EVO 4G LTE smartphone is another example of targeted messaging. We needed to create a front-of-store display for the new product. Our planning phase taught us there was an important target audience of first-generation EVO users who are fierce devotees of the Android operating system. They use their phones as hubs for music, photos, and connectivity, and they absolutely love their EVOs – so much, in fact, that they share their passion for it on social networking sites.
36
Two West (cont’d.)
Front-of-store installation for Sprint’s HTC EVO 4G LTE product launch.
A classic 30-10-3 path-to-purchase approach worked really well to unfold a “love story” targeting this audience: At 30 feet, banners showed a highly engaging photo collage of real people in “self portrait” mode, capturing moments from real life.
Sprint’s HTC EVO 4G LTE product launch.
At 10 feet, an “app storm” of floor appliques led the shopper to the feature area. There, we had LCD monitors running digital content highlighting key benefits of the phone in an exciting way designed to be irresistible to the target audience. The idea here was to give them that nudge to fall in love with the EVO all over again. At three feet, demo devices compelled shoppers to play with, experience, and explore the phone.
37
Two West (cont’d.)
The project integrated digital content with non-digital collateral – the banners and floor graphics – to create a seamless experience. And it employed additional best practices, for example, connecting task-relevant stories with viewing context and realistic user scenarios, and communicating a clear call-toaction to try and buy the new phone. JRA: What’s the next phase in your process? Whitehill: Distribution, the final phase. The important thing with distributing digital content is: make it easy. If it’s not easy to deploy, then you defeat the purpose of being able to turn around new messaging quickly. Fast, easy, employee-friendly distribution is an important part of being nimble and responsive. Having an intuitive network already in place is a huge benefit. With Sprint, we’re able to use their existing intranet system to distribute digital content instantaneously to any or all Sprint retail outlets in the U.S. JRA: Do you have any other advice for retailers about creating engaging digital content? Whitehill: I would recommend making use of retail associations to learn more about best practices. There really are some great resources out there. These are some good places to start: • • • • • •
Digital Screenmedia Association: digitalscreenmedia.org Digital Signage Federation: digitalsignagefederation.org Marketing Research Association: marketingresearch.org National Retail Federation: nrf.com NFC Forum: nfc-forum.org Path to Purchase Institute: p2pi.org
Points for Digital Content Along the Path-to-Purchase Point of transit
Point of sale
Point of wait
Focused
Active
Passive
Content purpose Wayfinding
Guiding
Inspiring
Primary context Corridors Lobbies Courtyards Atriums
Shops Queues Restaurants/cafes Ticketing Bars/clubs Elevators Theaters Water parks/ sports arenas
Interruption
Positive
Attention state Ethan Whitehill is the CEO of Two West, a shopper marketing firm located in Kansas City, MO.
38
Negative
Positive
When Times are Tough, Build Market Share By Robert Koolen, Advisor, EU Business Strategy, PRI
T
hose were the famous words from Proctor & Gamble’s CEO almost 10 years ago, in another recession, explaining how P&G in prosperous times focused on profits, but in lean times concentrated on building market share. That may be good advice for European companies now too. But how can European technology companies best execute a market expansion plan? The situation in the home market does not seem to be very encouraging. The OECD (Organization for Economic Cooperation and Development) in its latest forecasts from late November 2012 predicts an ongoing recession in Europe for 2013 and slow growth thereafter.1 By contrast, the U.S. economy is projected to show continued modest growth in 2013 and faster growth thereafter. In fact, the growth in 2014, according to this same OECD forecast, is predicted to be more than double the GDP growth of Europe. The U.S. Federal Reserve in its October 2012 assessment of the economic situation echoed similar predictions.2 Therefore, the answer to the question how best to build market share may be to expand in the U.S. for those European companies that do not yet have an American presence, or one that is not functioning optimally. Let’s examine the case for U.S. expansion a little further. The U.S. is – and will remain for a while – the single largest and richest economy in the world. Combined with the more promising economic forecast, it may thus offer better growth opportunities for European companies than the European home market. The fiscal challenges the U.S. faces are relatively easier to solve than the more structural challenges and forced adjustments that Europe is facing. Having been born in Europe, but having spent the last 20 years operating in and from the U.S., here are a few other observations: •
The U.S. market is very open to European products and services, not just in luxury cars, but technology products as well (thanks to the likes of SAP and Baan). The U.S. market is sophisticated and demanding, but provided the product positioning and messaging are clear and the delivery to initial customers is successful, Americans are very willing to consider European products.
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U.S. businesses generally enjoy more flexibility than their European counterparts, with less regulation and taxes. In many respects the U.S. simply has a more business friendly and entrepreneurial climate than many European countries.
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The U.S. covers a huge territory. The distance from San Francisco to Boston is further than Paris to Moscow and from Seattle to Miami is the equivalent of the distance from Oslo to Athens. (Add Canada to the mix and you roughly double the territory size.) But amazingly, they speak the same language in the U.S. wherever you go, so it is a market as vast as Europe, but addressable by a single language. By comparison, the EU has 23 official languages, plus a few unofficial ones, leading to a more fragmented marketplace.
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See www.oecd-ilibrary.org/economics/oecd-economic-outlook_16097408. See page 5 of the meeting minutes of the Federal Open Market Committee www.federalreserve.gov/monetarypolicy/files/fomcminutes20121023.pdf 2
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Build Market Share (cont’d.)
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This is admittedly a more personal and subjective observation, but in my experience, Americans are on average very positive-minded and relentlessly optimistic. As I have sometimes summarized it, in the U.S. the glass is not only half-full instead of half-empty, that glass has got an incredible opportunity for 100 percent growth! Such optimism can be infectious, and be a self-fulfilling prophesy in its own right. Maybe that’s just the right prescription for a company culture that has been suffering the effects of a prolonged dispiriting recession. Similarly, Americans are direct; they say what they mean and expect you to do what you say. That can be refreshing too.
There are of course alternatives to U.S. expansion. Hunkering down in the European home market for another year or so is always an option, but considering the economic prospects, the growth opportunities may just not be as attractive. Alternatively, European companies can try and expand to the Far East, where a number of the economies indeed are growing faster. But particularly for Europeans, North America is probably less of a massive leap than the Far East, in terms of time zones as well as business culture, language ,and market conditions. And no company with long-term global ambitions can afford to bypass the U.S., so this may be the best place, and the best time, to consider entering or expanding in this market.
Robert Koolen is Advisor, EU Business Strategy for the Platt Retail Institute. He works with European clients, advising them on establishing or improving their American presence through consulting and business development services. You can learn more about him and his extensive international and domestic expertise here and contact him via email here.
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PRI Research Articles Two PRI Research Articles explore how retailers are investing in technology in general and how one large European retailer is implementing cutting edge technology solutions to impact the customer in-store experience. Retailers' Investments in Technology: An Industry Perspective, presents data that illustrates the extent to which retailers underinvest in Information Technology. In this Special Report prepared for Digital Signage Connection, PRI illustrates that under conventional measures, retailers are perceived to generally spend on IT in line with other U.S. industries. However, PRI uses government data that presents a much different picture. PRI concludes that according to this data, retailers do, in fact, substantially underinvest in IT when compared to other service industries when considering both total spend and spend as a percentage of revenue. PRI's latest Research Article, "The Media-Saturn In-Store Digital Experience," is an extensive case study that details the technologies, management, and unique software that European retailer Media-Saturn built to create, manage, and distribute content in different languages across its network. Not only is Media-Saturn Europe's largest electronics retailer, it arguably has the most advanced and complex customer-facing technologies of any retailer in the EU. These are described in detail in PRI's Research Article.
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PRI is the leading publisher of tactical research in the area of In-store Digital Technologies, including Digital Communications Networks. Working Papers and Research Reports are available for purchase from PRI, or can be secured from select Working Paper or Research Report sponsoring firms.
PRI Research Publications Communication Effectiveness in Higher Education Steven Keith Platt, Platt Retail Institute; Kevin King, Director of Research, Platt Retail Institute PRI Research Report No. 1
Price: $250
Test Results from a Bank Branch Digital Communications Network Steven Keith Platt, Platt Retail Institute; and Dr. Jean-Charles Chebat, Ecole des Hautes Etudes Commerciales, Montreal, Canada PRI Working Paper No. 6
Price: $1,000
Impacting the Customer Experience at a Bank Branch through a Digital Communications Network Steven Keith Platt, Platt Retail Institute; and Peter VanSickle, BMO Bank of Montreal PRI Working Paper No. 5
Price: $1,000
Deployment and Test of a Retail Digital Communications Network by the United States Postal Service Steven Keith Platt, Platt Retail Institute; Dr. Kamel Jedidi, Columbia University Graduate School of Business; and Margot Myers, United States Postal Service PRI Working Paper No. 4
Price: $1,000
Leveraging the Impact of Retail Digital Signage Advertising through Behavioral Merchandising Steven Keith Platt, Platt Retail Institute; John Greening, Northwestern University; and Bill Pennell, Tesco Media Services PRI Working Paper No. 3
Price: $1,000
Establishing Retail Digital Signage as a New Media and Measuring its Effectiveness Steven Keith Platt, Platt Retail Institute; Dr. Francis J. Mulhern, Northwestern University; and Guy Vaughan, Retail Marketing Services PRI Working Paper No. 2
Price: $750
Implications for Retail Adoption of Digital Signage Systems Steven Keith Platt, Platt Retail Institute; Dr. Kingshuk K. Sinha, University of Minnesota and Research Fellow, The Platt Retail Institute; Dr. Barton A. Weitz, University of Florida; with Pat Hellberg, Nike, Inc.; GV Iyer, Bank of America; and Margot Myers, United States Postal Service PRI Working Paper No. 1
Price: $250
3Q PRI North American Digital Signage Index Published quarterly by PRI. Provided at no cost to PRI members as a membership benefit. Purchase from the PRI Research Library
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Price: $95
PRI Research Sponsorships In concert with leading universities and researchers, PRI undertakes extensive studies related to in-store marketing technologies and digital communications networks. These are published as either Working Papers or Research Reports. In addition, PRI seeks funding for other unique projects. Sponsorship of PRI research offers a variety of benefits. These include establishing the sponsor as an industry thought leader, creating various promotional opportunities, and enabling the sponsors’ association with the leading research and consulting firm in the field. Current sponsorship opportunities include: 1) North American Digital Signage Index (quarterly)
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The right to distribute copies of the research.
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PRI will present the research on behalf of the Sponsor.
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On PRI’s website detailing the research, the Sponsor will be noted and its logo will be listed.
Please contact PRI for information about sponsorship opportunities.
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PRI Resource Library The PRI Resource Library is an extensive database of articles and research covering a broad range of topics including, among many others, coverage of Vertical Markets, Marketing, Content, Networks, and Analytics that relate to marketing-at-retail. Articles and research on topics from customer experience to case studies to metrics are available on demand. Some recent additions to the Resource Library include: From Standardized to Personalized: Mobility’s Impact on Information Culture This article discusses how one university realized that the new generation of smartphones represents the future of communication, and that much of what had been done in education would have to change as these devices became pervasive. Moving Toward a Seamless Omni-Channel Experience As customers engage with retailers across multiple touch points, there is a clear trend among retailers to adopt omni-channel initiatives that provide a seamless experience and maximum engagement across all of these touch points. Planet Hollywood Production Features Unique Video Wall Backdrops A Las Vegas stage production used one big backdrop made out of LCDs, as wide and as high as the stage would allow. Solving the Digital Signage Deployment Puzzle One Piece at a Time Successfully deploying digital signage is like solving a puzzle – there are many pieces, and they must all fit together precisely the right way if there’s to be a payoff. Subaru Introduces National DS Network This article describes the deployment of a DS network to Subaru dealerships across Canada and offers some thoughts on the opportunities DS offers. Take a Stand Against Showrooming with DS Retailers must counter the showrooming trend by making the in-store shopping experience more convenient, educational, and enjoyable. Technology Can Enhance Personal Service In-Store To impact the level of customer service and thereby increase revenue, retailers implement various technologies in their stores. Find these, and hundreds of other articles, in the PRI Resource Library. While there, you may subscribe to an RSS feed and get alerts whenever new articles are added to the Library.
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Industry Events Calendar January 29-31, 2013 ISE 2013 RAI Amsterdam February 26, 2013 PRI Retail Forum Las Vegas Convention Center Las Vegas February 26-March 1, 2013 Digital Signage Expo 2013 Las Vegas Convention Center Las Vegas April 3-6, 2013 ISA International Sign Expo 2013 Mandalay Bay Conference Center Las Vegas April 6-11, 2013 NAB Show Las Vegas Convention Center Las Vegas April 8-10 Shopper Marketing Summit Renaissance Schaumburg Convention Center Schaumburg, IL April 16-18, 2013 GlobalShop McCormick Place Chicago May 19-22, 2013 OAAA/TAB National Convention and Trade Show JW Marriott Los Angeles, CA May 22-23, 2013 Screenmedia Expo Earl’s Court London June 12-13, 2013 Digital Signage Expo Europe Die Station Berlin, Germany June 12-14, 2013 InfoComm 2013 Orange County Convention Center Orlando, FL
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Contact PRI Steven Keith Platt, Director and Research Fellow P.O. Box 158 Hinsdale, IL 60522 U.S.A. Phone: 312.265.6106 Fax: 630-920-1843 contact@plattretailinstitute.org
Juan Clotet, Director, European Operations Ctra de Mig, 75 08907 L’Hospitalet de Llobregat Barcelona, Spain Phone: [34] 931847755 juanc@plattretailinstitute.org
Gordon Helm, Director, Publication Management Phone: 602-606-2228 gordonh@plattretailinstitute.org
Robert Koolen, Advisor, EU Business Strategy Phone: (+1) 610-213-1232 robertk@plattretailinstitute.org
Margot Myers, Director, Global Marketing & Communications Phone: 480-773-3118 margotm@plattretailinstitute.org
Ruth Stein, Vice President, Business Development ruths@plattretailinstitute.org Stephanie Besser, Research Analyst stephanieb@plattretailinstitute.org Serima Nazarian, Research Analyst seriman@plattretailinstitute.org Chris Zhang, Research Analyst chrisz@plattretailinstitute.org
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