As the days of 2009 dwindle, I find myself crisscrossing the country, talking to retailers of every stripe. These conversations have revealed a few consistent themes, which are likely to drive customer-facing retail technologies in the coming year.

To my relief and that of probably everyone in the industry, there’s a sense the economy is coming back. Earlier this month I was at the Kioskcom Self Service Expo in New York, and I would describe the mood as "unexpected optimism." Retailers and technology buyers of all sorts were on the floor in surprising numbers with specific projects they needed to execute. One exhibitor even exclaimed, "We’re on the way up!" while making a swooping airplane motion towards the sky. Now that’s what I call a return to confidence. It is a safe bet that retailers who have been waiting on the sidelines will resume investments in their store experiences in the coming year.

The dominant theme I have heard from retailers is the need to inspire shoppers. Retailers are seeking technologies that do for any product category what mannequins do for apparel—show the customer how to bring many items together into a compelling, personalized solution. An expectant mother furnishing a baby’s room, a couple designing a home theatre, a parent building a fish tank for their child—shoppers need to be inspired and guided to a final solution. Retailers understand that addressing a consumer’s end goal is the key to driving more sales, yet doing this with human interactions is expensive. So, I expect to see increasingly sophisticated shopper assistance tools emerge from the simple product selectors of today. Retailers are keenly focused on the problem, and a few are ready to test solutions.

Closely related to inspiration is the idea of cross-selling. Retailers are interested in technology that helps them add items to a shopper’s basket by reaching across the store to cross-sell many product categories. I get the sense from retailers that this is an area in need of improvement. Customer-facing technologies that draw upon in-store and online inventories to automatically suggest the best complementary goods will likely be tested in the coming year.

Another recurring theme is a desire to provide quality customer service where today’s economics simply do not allow it. Many complex products do not sell in enough volume or at high enough prices to justify having human experts in the store. Several retailers see technology as the way forward. Expert systems can give customers the additional product education they need to make an informed choice, while sparing the cost of additional store labor. Expect to see customer-facing technologies deployed most commonly around these so-called "marginal" product categories.

Finally, with recessionary pressures on staffing levels, retailers want to make the most out of their store staff through sales process automation. They want humans doing what humans do best—guiding customers through complex, personalized, real-world product problems and decisions. For the 80 percent of any selling process that is the same for every customer, retailers are looking for technological solutions that do this work, letting store associates handle more customers in a given period of time. In a sense, self-checkout was only the beginning. The phrase I have heard is "moving customers from questions to the counter" as quickly as possible. I personally view this as challenging to execute in practice and anticipate some failed trials, given the need for seamless integration between store personnel and in-store technology. However, the first retailer to do it will reap significant rewards and set the stage for the future of retail.

Government Video ran a story this morning about a new digital signage installation for the Colorado National Guard. In addition to improving communication among armories, the network is also being touted as a way to improve solider retention by promoting career opportunities within the Guard.

The project was a joint effort between Tightrope and members of the National Guard’s IT and recruiting departments. One screen was placed in each armory and runs content promoting job openings, as well as news, videos and motivational information.

The government vertical has been a long sought after area of the digital signage user market. It has been typically a bit difficult to penetrate as there are many layers of bureaucracy in order to get to the decision makers. Also, connectivity becomes an issue because of the sometimes confidential info running on the existing networks. Such was the case here with the Colorado National Guard. The team instead used the Verizon Express Network wireless data services, making the installation a cellular digital signage network.

The Guard used the Tightrope Carousel Pro server and 14 Carousel Solo 220 players, which are connected to the network via a Verizon Air Card. It is also using 42-inch Sharp 42SB45U LCD screens.

OC Edward Tuholske, Marketing NCO, told Government Video:

The response to the digital signage system has been 100 percent positive. We are getting more and more requests from our commanding officers to add extra information to the digital signs because they see that more effective communication is improving the morale of our soldiers. Everything we have heard so far indicates that the signage system is improving soldier re-enlistment.

Panasonic has come up with cool new application for its giant 103-inch plasma screen, this time as a part of a promotion for its compact Lumix DMC-ZX1 digital camera in London.

A team of six artists created a giant version of the camera, where the 103-inch plasma serves as the camera’s screen. The camera is one of a series of objects which have been “magnified” by Panasonic to illustrate the 8x optical zoom lens of the Lumix camera.

The giant camera is presently located in London’s Waterloo station, but will move to London Victoria from Nov. 26-28 finally to London’s Liverpool Street Station from Dec. 3-5.

Users are encouraged to upload photos of themselves and the oversized camera to Panasonic’s Facebook page for a change to win a trip to the 2010 Vancouver Olympic Winter Games. Mark Robinson, head of Lumix Marketing at Panasonic, said:

We’ve received some fun and imaginative photos on our Facebook page showcasing perspective resulting from our larger than life sculptures. We’re sure our giant sized camera will prove a popular past time for commuters and help to raise the profile of our 8x life campaign.

There are many reasons why digital signage and interactive applications are unlikely to fully converge. By their fundamental natures they strive to meet different objectives, require different development skills, and are generally implemented by different functional owners within organizations. Despite their differences, there are clear opportunities for each technology to learn lessons from the other. The market (defined as technology buyers) has not demanded that they converge, and the technical, organizational and functional obstacles to true convergence make such a requirement unlikely for the foreseeable future. Digital signage and kiosks will continue to coexist. Buyers who “force” or assume convergence may very well sub-optimize both their interactive and digital signage capabilities.

Arrow Electronics and Seiko Instruments recently announced a partnership that makes Arrow an authorized distributor for Seiko’s line of receipt and ticket printers. The agreement is meant to bolster Arrow’s solution offering for kiosk designers.
 
From a distribution standpoint, Arrow carries a menu of kiosk components from leading manufacturers, such as displays, printers, power supplies and computing engines. Arrow OEM Computing Solutions (OCS) also provides kiosk vendors with an array of value-added services, addressing each of the phases required to bring a kiosk to market. The company says these outsourcing capabilities include design assistance and prototype development, integration and manufacturing, logistics, installation and post-sales support.
 
We sat down with George Papajohn, director of marketing for Arrow OCS, to discuss the need for outsourcing in the kiosk industry and to explore the potential impact these services can have on a kiosk vendor’s business.    
 
What outsourcing services are kiosk vendors asking for?
 
Kiosk designers’ requirements tend to be fairly broad in scope. Fundamentally, the need is for a reliable distributor with technical competency and strong manufacturer relationships. The distributor has to be able to recommend and deliver proven components that perform reliably in the field and don’t add integration complexity. The ability to offer the right financing programs is another imperative. Cash flow requirements cannot be overlooked. I would also say that scalability is a recurring theme.

For example, a smaller kiosk designer can develop a fantastic concept and prove it with a successful pilot program. And when it does go well, they might be faced with the enviable but perhaps daunting prospect of supporting a giant retailer. Not every kiosk designer can afford to maintain the capacity, logistics and support capabilities needed for a hiccup-free deployment on such a large scale. And we all know how difficult it can be when the end-customer introduces late design changes. The level of complexity and need for scale can spike fairly rapidly in this industry. With a robust outsourcing partner, the designer has a single supply source to rely on, and has access to integration facilities that can immediately scale to meet individual project needs.  

How does outsourcing impact a kiosk vendor’s business?

The right outsourcing partner can align themselves with a kiosk designer’s business and deliver a program that meets each project’s needs, in terms of components, value-added services and financing. It boils down to augmenting the designer’s internal capabilities on-demand, reducing overhead costs and eliminating headaches. This frees up the kiosk entrepreneur to focus on their true talents: product innovation and bringing in new business.

How do end-customers perceive a third party’s involvement in the project? 

I think the majority of customers are aware of the important contributions made by third parties in the supply chain. Distributors, contract manufacturers and logistics providers all play critical roles. A comprehensive outsourcing solution basically consolidates these elements. Some customers refer to this as having “one throat to choke” if an issue comes up. Regardless of the players involved, my perception is that customers want seamless execution, without unnecessary costs.   
 
Have outsourcing requirements been evolving?

With the recession, obviously most solutions providers have been feeling added pressure when it comes to cost and financing issues. Beyond that, there is no question that the breadth of self-service applications has continued to expand. This makes it even more important to align with the most capable suppliers, so that the right products are available to support these increasingly innovative solutions. 
 
How do you see this business in 2010?

The analyst reports we’ve looked at tend to predict growth for self-service in 2010. And there is no question that self-service technology provides a tangible bottom-line impact for end users. We anticipate this will certainly continue fueling new projects, and we are working hard to be able to anticipate and respond to customers’ continuing needs for value-added capabilities on a global scale

Digital signage expert Keith Kelsen, founder of MediaTile, today launched a new initiative entitled “The 5th Screen Project,” an endeavor geared toward driving digital signage deployments and moving the industry forward.
 
As part of the initiative, Kelsen also will publish a book focused on content for digital signage. “Unleashing the Power of Digital Signage — Content Strategies for the 5th Screen,” is the first comprehensive book on digital signage content and will be published by Focal Press.
 
Kelsen describes digital signage as the fifth screen, with the other four being TV, computer, cinema and mobile.
 
The 5th Screen Project is comprised of three parts:

• Leveraging the forthcoming book to educate the market on achieving content optimization
• Continued development of content best practices through Kelsen’s chair position with the Digital Signage Association
• Heading a stealth project related to a massive shift in media development and delivery
  

The 5th Screen Project began over a year ago as Kelsen began writing the book based on extensive interviews with industry leaders who research new media methodologies. Kelsen also took over as chair of the Digital Signage Association’s Content Best Practices committee in 2008 and was named the 2008 Digital Signage Man of the Year.
 
As part of the 5th Screen Project launch, Kelsen also stepped away from day-to-day operations of the MediaTile Company and handed control to newly appointed CEO Simon Wilson.
 
With the announcement of the project, Kelsen also has stepped down from his chairman of the board position at MediaTile and is now chairman and CEO of the newly formed 5thScreen Corp.
 
Kelsen announced the 5th Screen Project today at the Strategy Institute’s “Building Your Digital Signage Business” conference in Chicago, where he serves as chairperson for the two-day event.
 
“The fullest potential for digital signage has gone mostly untapped, and my vision is that this project will deliver a substantial uplift to deployments by concentrating on the critical elements for success,” said Kelsen. “Taking on this challenge to further drive the industry forward, and at greater pace, comes at a time in our industry that I consider to be the tipping point.”
 
  

Supermarket giant Tesco recently created a buzz in the industry by opening a concept store (in Kingsley, Northampton) with just self-checkout lanes and no cashiers. Understandably, the reaction to this initiative from various quarters has been mixed. While Tesco claims that customers have reacted positively to the idea, workers’ unions have predictably expressed serious concerns over the implications of completely eliminating cashiers at the checkout point.

This move shouldn’t come as a surprise to anyone tracking the evolution of self-service in the retail sector. In fact, it was entirely along expected lines. Despite the sizeable initial investment, there has been a clear shift towards self-checkout since the turn of this century, especially by big-box chains. Retailers are studying ways to attract new customers (in addition to retaining existing ones) and in this context, self-checkout has been positioned as a technology solution that can drive up customer satisfaction levels, leading to a more lasting relationship. Not to mention the cost savings.

And therein lies the rub.

Studies reveal that 20 percent to 30 percent of the payroll in retail is typically directed toward cashiers. With self-checkout, this figure can be brought down considerably. The key is to get a commitment to the cause at all levels, from top management to store managers and cashiers. While it’s true that self-service lanes would create some redundancies, the primary aim is to redeploy resources to service-oriented areas in the store. The redistribution of cost savings to other productive areas needs to be clearly articulated to store-level staff for this to work.

And there are the operational realities, of course. Retailers often tend to understaff self-checkout lanes, which can cause considerable delays if inexperienced users create a bottleneck. More often than not, consumers who become confused or embarrassed about their inability to complete a transaction tend to avoid self-checkout in the future. This makes the initial few transactions crucial from the retailer’s perspective. Studies also indicate that self-checkout systems lead to a marked decrease in impulse purchases — low-priced products such as candy, mints, chocolates, soda, water, chips and gum are placed around the cash counters. This can be attributed to the fact that customers have to focus on the checkout process completely. Inevitably, there are nagging security issues that need to be addressed as well.

None of this detracts from the obvious value proposition of self-checkout — when designed and implemented correctly, it can enhance the customer experience at the store and drive top-line growth. Most importantly, it leads to an increase in labor productivity and resource utilization. Labor productivity essentially refers to two aspects: The first is to remove the labor element itself, as an obvious cost-cutting measure. The second is to redirect the labor or resource into other departments where it can be better utilized, such as restocking shelves, bagging groceries or helping customers as they make purchases. Counter-intuitively, self-checkout can end up enhancing personalized service at the store, although it might appear to be leading to impersonalization. The consumer experience, always driven by speed, is made more efficient as customers can get out of the store faster. The privacy and convenience provided by these systems doesn’t hurt either.

The bottom line

Customers like choice. Studies show they are growing increasingly comfortable with self-service systems, such as ATMs and kiosks at airport terminals. Self-checkout, if offered alongside an optimal number of staff cashiers, is a definite positive. With time, the number of cashiers needed to supervise checkout lanes will decrease. In fact, the future might be even more radically different once RFID/mobile-POS/smartphone-enabled checkouts gain prevalence. Although the industry is not ready for a widespread rollout of self-service-only stores, this is the right time to experiment. Besides, the marginal cost-savings offered by self-checkout might be too good to pass up on during these tough economic times.

Aravindh Vanchesan is a program manager with the Frost & Sullivan North American ICT practice. He focuses on monitoring and analyzing emerging trends, technologies and dynamics in retail markets worldwide.

Last week I was sent an article from the Consumerist entitled “Bumblebee Tuna Tricks You Into Watching Commercials At The Grocery Store.” The article, which was filed under the Consumerists’ “Badvertising” section, is a commentary from a reader that encountered some in-store digital media from Bumblebee Tuna at his local Safeway store.

The display was a small shelf-edge screen with a silver button above, which upon pushing, caused the screen to play a 30-second Bumblebee Tuna TV commercial.

The writer’s reaction? “No coupons. No cooking ideas. No direct engagement with the shopper. Just the same, unimaginative advertising penetrating deeper into our everyday experiences - as if the market isn't saturated enough. I don't know how this could possibly be effective, but apparently they think it will be.”

Its no wonder the writer was upset – this is a BAD in-store digital signage installation! If you read this site or any other industry portal, you will see that we spend countless hours try to send the message to deployers to create compelling content, don’t repurpose 30-second TV ads and to give the shopper a reason to watch the screen.

The Consumerist digs this kind of stuff, but these kinds of articles don’t reflect well on the digital signage industry, especially when it is trying to battle its way into media budgets.

This article does serve as a great focus group, however. At this time of writing this, there were 38 comments to the post, and not too many of them were positive. For example:

“[In-store screens] were slightly annoying at Wal-Mart, but I expected as much from them. When they started showing up in Kroger and Publix a few months later they became downright absurd. The problem with the second wave is that some of them are not button-activated, but start blazing away whenever you walk by.”

“What a waste of store resources. And how annoying would it be to try to get past someone in the aisle watching that?”

“Hopefully these things test out to be a failed ad concept and in 6 months we'll forget all about them.”

Here’s the thing – it seems the writer would actually be open to the media if it were useful in some way. Take his quote above. He is looking for coupons, cooking ideas and direct engagement.

Here is another commenter’s response: “The bizarre part, in my opinion, is that they could do something cool with this…For example, what if there was a short puzzle you had to solve to get a coupon code or something?”

Bingo – in order for in-store digital media to work, there has to be a compelling reason for the shopper to engage with it. Thirty-second commercials and cheap ad spots don’t cut it with today’s modern shopper. And for those directly involved with retail digital signage, take some time to go through the 38 comments. Chances are these are the opinions of some of your customers.

*Note: When I read this article, I immediately contacted Paul Flanigan and Laura Davis-Taylor, two retail experts I work with often, to get their commentary. Their opinions on this subject are published below:

Paul Flanigan, Preset Group:

“Being an industry insider, I consider this a wonderful little focus group. Reading the article and the comments shows that customers do care very much about how they are treated with digital signs in a retail environment, and shows the vitriol when it goes wrong.

Overall, this is about as bad an example of digital signage or customer engagement at retail as I have ever seen, and I agree with several of the comments. This does nothing good for the industry as a whole. Instead, it puts many of us on the defensive to explain or justify why this is in the store.

There are several negative issues with this experience, from the fact that the reader pushed the button out of curiosity (instead of a desire) to the end result of complete disengagement (and ultimately sharing online with others). I’m willing to bet the reader did not purchase any Bumblebee Tuna. Seeing the photo of the display and seeing not only his reaction to the sign but the comments, it’s pretty easy to see that there was very little, if any, strategy or thought put into this. And that’s bad.

The single biggest reason the shoppers find this annoying is because it doesn’t offer anything to enhance the store experience, anything different from what the shoppers are already experiencing with other media. The reader and comments suggest exactly what it should be doing, providing something deeper than advertisement, something that would move a customer closer to a purchase decision in favor of the tuna. HogwartsAlum sums it up best: “If I were to watch a video of a recipe that looked kind of good and the product were right in front of me, I would probably reach out and take one.”

Worst of all is the fact that the manager would consider removing it because it does nothing but anger his shoppers, meaning it most certainly does not move product.

But, this is a great way to start the conversation of how ad agencies, brands, and retailers must work together to understand the environment and craft messaging much more appropriate. This is a world that agencies of all kinds must embrace to be competitive and valued in the eyes of their client, the brand, and the retailer.

I imagine that this will be used by several industry educators to explain what not to do when putting signage in the store.”

Laura Davis-Taylor, Retail Media Consulting, Inc.:

“My one key takeaway: “Just because you can, it doesn’t mean that you should”.

I will bet my bottom dollar that an ad agency that has no in-store experience came up with this utterly useless and contextually irrelevant promotion and it’s projects like these that are a black eye to our industry.

The author hit the nail on the head when he said that he hopes that someone figures out a way to deliver useful, informative or somewhat interesting information with these types of emerging digital media tools. People are busy, they are overwhelmed and they are under served. The last thing that they want to encounter is more “visual spam” in a world in which they encounter 3 – 4,000 media messages a day—most of which are not helpful or useful in any way.

One of the commentaries aptly stated that “the bizarre part is that they could easily do something cool with this” and “they could easily use this tech to engage people instead of just piss them off.”

It’s truly that simple. No retailer should EVER let a CPG put something like this into their aisles unless they have dug deep to understand what might help or delight their shopper and put some real-world testing into play to ensure that it’s readily accepted.

If shoppers love the experience, it becomes a fun or rewarding part of their shopping visit. If they hate it, they do things like write about how awful it was and spread the word to whomever will listen.

Let’s hope articles like these make brands wake up before we jeopardize what can be a really wonderful shopper help tool. (And ad agencies, get out of the store!!!)

Sir Martin Sorrell, WPP Group CEO, made several key points that relate to Digital Out-of-Home (DOOH) while delivering the opening keynote to a packed house at Ad-Tech in New York this week. WPP employs 145,000 marketing agency professional in 2,400 offices in 107 countries.

Agencies can “have their cake and eat it too” by using DOOH. A brand can be positioned using placement and content strategy at both specific and multiple points along a communications continuum of “one-to-one” versus “one-to-many.”

Sorrell noted that “agencies are going to become much more involved in the development of 'content' and all of its implications.” This points to a refocusing of brand messaging by agencies, which are, after all, both guardian and builder of brand equity.

Bill Ratcliffe, formerly of the WPP analytics provider Millward Brown is credited with noting that “the power of digital signage is to both brand and merchandise at the same time”.   

“The lines between advertising and editorial are going to become much more blurred,” Sorrell added.

DOOH can readily accommodate “sponsored content” which can provide advertiser profiles with value to the viewer and the display location provider at the same time. For example, while credit card advertising is often restricted on campuses, messaging aimed at improving financial-management skills could be sponsored by a particular card service provider.

As the pressure on all media to deliver more value increases, Digital Out-of-Home is already positioned where leaders of the agency “puck” want it to go. Win-win-win on the part of brands, agencies and media companies is offered by DOOH.

I often get requests for digital signage case studies that show sales lift – of any kind (A recent conversation: "One percent! I don’t care if it’s even one percent!") Most of these folks are digital signage companies or marketers looking to sell systems and need hard evidence that digital signage works when selling products.

Here I am going to feature two case studies that do just that. One is a case study from YCD Multimedia that I have been pointing people to for awhile now, and the other is a recently released study from the Wall Street Journal Network and Starcom for its 2008 Blackberry campaign.

Aroma Espresso sales boosted through YCD digital merchandising (2008)

Since Aroma Espresso Bar began using YCD Multimedia’s cash display screen, the chain has experienced a 25-35 percent overall sales increase. In this case, customer-facing screens were placed in front of the POS systems in order to influence customer decisions. Furthermore, Aroma has experienced a sales increase in the following categories:
 
• 70 percent increase on promoted desserts
• 30 percent increase on promoted flavored mineral water
• 50 percent increase on coffee and cake promotions
 
Aroma is an international espresso chain with over 80 locations in Israel, New York City, and Toronto, Canada. Aroma uses YCD’s digital media solution to increase revenue with point of sale, deliver a coherent brand experience, and provide customers with on-site entertainment. The cash display screens provide Aroma with a direct promotional channel that can be easily measured.

Wall Street Journal DOOH network creates 16% sales boost for Blackberry

The Wall Street Journal Network released a case study about its 2008 DOOH/place-based media campaign with Blackberry that resulted in a 16 percent sales lift from those who engaged in the program.

Last year, Starcom, while working for Blackberry, bought a program of media on the WSJ Network and also coordinated 15 place-based events in three cities: Atlanta, Philadelphia and San Francisco. The events that reached 90,000 customers and resulted in 7,000 direct interactions with customers. The events resulted in 3,000 gathered leads.

WSJ saw that average purchase intent grew 51 percent and brand engagement went up 61 percent. Nearly three months later, attendees were surveyed about their purchases and it was found that there was a 16 percent sell-through for Blackberrys from those that attended the place-based events. This case study was profiled last week at the OVAB Digital Media Summit in New York City by Erin Simino of Starcom Worldwide and Robert Passikoff, Ph.D., of Brand Keys Inc.

Compared to a control group who had not seen ads or attended the event, sales from attendees were about eight times higher.

The global economic crisis — coupled with increasing competition and rising customer expectation — has compelled the aviation industry to devise innovative and cost-saving solutions. As such, airlines all over the world are looking to technology to generate more demand and drive down costs.

Self-check-in services are helping airlines cut costs and improve customer experience. Moreover, according to IATA’s 2009 Corporate Air Travel Survey, more than 50 percent of passengers worldwide want more self-service options. Customers feel more empowered while using self-check-in services and save time at the airports. Online check-in, kiosks and mobile technology are ushering in a new era of customer self-service, while self-service kiosks are increasingly becoming more and more popular, as proven by their increased usage. Kiosks are also working well in tandem with online and mobile technologies.

According to the SITA/Air Transport World Passenger Self Service Study, kiosk check-in usage is set to rise over the years and interactive kiosks will increasingly shift to the forefront of self-service. Kiosks not only benefit people who do not check-in online, but can also be used to provide multiple functionalities at the airport — like car rental or hotel check-in. Moreover, in the near future kiosks may become excellent avenues through which ancillary services might be purchased.

Another area where kiosks will play a huge role is in the process of self-tagging baggage. IATA, with its Fast Travel Program, will immensely improve and enhance passenger self-service through kiosks performing the functions such as printing bag tags, scanning documents, automating boarding gates and reporting missing baggage. Furthermore, the advent of CUPPS (Common Use Passenger Processing System) architecture — technology that enables airlines and handling agents to access their own applications from multiple workstations and peripherals throughout the airport that are shared by all users — will help continue to bring about increased efficiencies and cost savings.

In addition to kiosks, mobile technology will continue to take the world by storm. Mobile technology has a distinct advantage over kiosks — our mobile phone is always with us. It is thus very convenient to use one’s phone for various services. Mobile phones can be used not just for checking in but also to complete the entire booking process. They can also be used for the sale of ancillary services like hotels, cars and also for timetables, notifications, alerts, social networking and much more.

According to a 2009 SITA IT Trends survey, 80 percent of the airlines surveyed are planning to offer mobile check-in capabilities by 2012. What’s more, IATA has targeted 100 percent Bar Coded Boarding Passes (BCBP) by 2010. These facts alone guarantee the future of self-service technologies at the airport.

As network access speeds become ever faster and smart phones become increasingly powerful, the future of mobile services is poised to become even more popular than kiosk and Web check-in. Now, mobile check-in users consist of business and frequent travelers and smart phone users. However, this trend is sure to change as more and more leisure travelers are also purchasing smart phones.

The writer is senior business associate with NIIT Technologies.