NRF 2012: Digital in-store media called to deliver, Pt. I (Commentary)
Jan. 27, 2012
By Lyle Bunn
Dynamic Media Consultant
**This two-part summary of the National Retail Federation January 2012 "Retail's BIG Show" trade show and conference is through the lens of the value and directions of digital in-store and dynamic place-based media to improving the success of brands and retailers. While the marquee theme of the event was "Engage and Evolve," the three retail industry priorities of "technology," "engagement" and "talent" were reflected by many exhibitors, retail sector briefing reports and in conference sessions. Sections in this article include:
The National Retail Federation (NRF) – Event perspectives
Retail and technology
Engagement - "Bricks, Clicks and Picks"
Analytics & In-Store Media
The National Retail Federation (NRF) indicates that retail contributed $1.2 trillion in direct GDP in 2009, including food services and drinking places. Direct employment was 28.1 million. There were 3.6 million establishments, 95 percent or 3.42 million of which were one-location businesses. There were 917,000 locations of multi-location retailers. The NRF projects a 3.4 percent increase in 2012. Directly and indirectly, retail accounts for 11.9 percent of all business establishments in the U.S., supporting 1 in 4 (42 million) American jobs and contributing $2.42 trillion to annual GDP.
Online retail is currently $176 billion, 3 percent of annual retail revenues, having grown by 11 percent over the previous year, according to Forrester Research; however, this is projected to grow to 11 percent in the next five years.
Digital Media exhibitors at NRF included 30 providers of digital in-store media, including industry-leading suppliers such as NEC, Stratacache, Hughes, Harris, AOpen and YCD and Scala at the HP booth. Dynamic media exhibitors were busy throughout the show. Many other suppliers attended to connect and learn.
Kevin Lawrence, VP, Enterprise Sales for Broadcast International, which serves organizations such as Bank of America, Microsoft and Hollister commented that "the NRF event was great because it validated what we are hearing from so many of our customers. They want to leverage digital media to better inform, influence and educate both customers and employees. They expect solutions that provide a more interactive and engaging customer experience by embracing touch, sound, mobility and more. They demand analytics that allow them to assess the effectiveness of their campaigns, and they want to work with a single partner to accomplish it all."
The Intel product showcase was elbow to elbow throughout as they demonstrated a dozen advanced applications currently in use by brands and retailers such as HSN, Kraft Foods, Macy's, adidas, the LEGO Group, Petrobras and others. A 3-D aerial imaging kiosk profiling Coca-Cola reflected the Intel partnership with Provision, a provider of commercial application "holographic" displays.
Intel also included a new prototype through its partnership with Inwindow Outdoor, an interactive digital out-of-home advertising company that has developed street-level storefront interactive advertising campaigns for American Express, HBO, Ford, HP, Microsoft and NBC. The Intel/Inwindow Outdoor prototype, being called the "Experience Stations" engages consumers through information presentation and interaction (multi-touch and gestural). The slick prototype incorporates a large-format 70-inch touchscreen display and near field communication (NFC) capability for two-way transactions with mobile devices. The Experience Station can also enable users to take and send pictures, download coupons to their phone using NFC, connect to social media sites, check the weather, and look up information. When users approach the screen, the system's cameras use Intel's real-time analytics software (Intel AIM Suite), which detects gender and age and then plays targeted advertising based on the audience demographic. Analytics are at the heart of The Experience Stations, which provides metrics on audience count, impressions, level of engagement and dwell time.
Several exhibitors demonstrated "closed-loop" systems of message presentation, mobile opt-in, coupon offer and redemption with analytics at each step in the commercial process. The Intel AIM Suite of anonymous viewer analytics is typically integrated with all major digital signage content management software systems.
Scott Hines, President of CopiaMobile succinctly outlined the benefits of such closed systems, including the "Wave2Save" experience:
The multimedia, multichannel approach incorporates message presentation, mobile detection and offer, opt-in and sales activation in a turnkey solution with a strong foundation of analytics at each stage of consumer engagement.
It leverages available digital media infrastructures to deliver higher ROI to retailers and brands.
No character entry or scanning a QR code is needed to activate engagement — although these can be added.
The experience is multisensory including visual and auditory with the cellphone making a “whooshing” sound during wave and cheering when offers are redeemed.
A tactile experience is offered with the phone vibrating when offers "land" in the phone and waving your hand provides a physical experience.
The system bridges the physical and the virtual world creates a much more compelling interaction for consumers
It's easy to get consumers to adopt an experience that they enjoy
Tying the wave experience into creating "user generated" content, where the consumer actually participates in the campaign gives the consumer benefit beyond just offering them a discount
Gives retailers a way to incent consumers without giving away gross margin
Similar systems are available from iSIGN, MobileGreeter, ComQi, YCD and others, and it is clear that mobile marketing platforms such as FourSquare, Bee Marketing and others can/will integrate message presentation display into the mobile ecosystem. Digital Signage Expo (March 5-9, Las Vegas) and Customer Engagement Technology World (March 28-29, San Francisco) could be expected to feature these display/mobile/analytics multichannel systems prominently.
Retail and technology:
Retail is focused on providing people with what they need and want, including products, goods-related services and experiences. It is a highly-competitive industry, given the effects of the economic climate, consumer preferences, supply chains and technology upon it. Customer satisfaction and retention are the top strategic initiatives for retail, notes a Retail Horizons Benchmark study which reflects that loyalty programs, group buying, localized coupon offers and transparent price comparison are increasing competition among retailers.
The retail sector is similar to manufacturing, distribution, health care and financial services in having used digital technologies to gain operational efficiencies. But the retail sector is poised as no other industry to exploit digital technologies for sustainable revenue growth through its use of digital technologies for customer relationship management and business analytics. Technology investments are the second largest expenditure by retailers behind inventory, according to 2011 report "Retail Horizons: Benchmark 2010." Retail and technology are natural partners — not just because of the symbiotic "win-win" relationship, but because each industry is continuously reinventing and refining itself to better serve its clientele.
Charles Darwin said, "The fittest win out at the expense of their rivals." On that theme, the retailers and brands that exploit the enabling value of technology will have the competitive edge.
A large audience was held spellbound during airing of the 5-minute video by Corning called "A Day Full of Glass" aired by Mitch Joel, author of "Six Pixels of Separation":
"Retailers are living in hell because of the uncertainty, constant focus on cost, benefits and testing, and because of the options available to them," declared Joel. He added: "Retailers that are daunted by options will fail due to death by analysis paralysis."
Joel continued, "At this point, successful retailers have already moved forward with digital strategies and have embraced multichannel. They are looking to new ways where 'digital' can increase insights, engagements, loyalty and brand-building."
(Check back here on Monday for part two of Lyle Bunn's in-depth analysis of this year's NRF BIG Show. Next up: Engagement - "Bricks, Clicks and Picks" and Analytics & in-Store Media.)
Lyle Bunn is an independent analyst, advisor and educator in the high growth areas of dynamic place-based and enterprise media. He has assisted hundreds of firms in the planning of their initiatives and has helped train several thousand professionals. He has published over 200 articles and whitepapers on related subjects, and served as principal writer and editor of dynamic media supplements included in USA Today, The Wall Street Journal and Canada's The National Post. Visit www.lylebunn.com for additional resources related to dynamic Place-based and digital In-Store Media, or email him at Lyle@LyleBunn.co.