Redefining automated retailing part 2: Digital media’s key role

Redefining automated retailing part 2: Digital media’s key role

Photo by Matt Tilbury

Michael Kasavana is the National Automatic Merchandising Association endowed professor emeritus, The School of Hospitality Business at Michigan State University.

By Michael Kasavana

An increased level of interactivity between the consumer and digital media in retail environments has been proven to effectively increase traffic, sales, profits and loyalty.

Because brick-and-mortar retailers have proven the effectiveness of digital media, the self-serve retail industry has a road map to follow in using this technology to improve the customer experience and boost sales.

Digital signage, a central focal point, is typically defined as high definition content containing text, graphic and video components. As a result of advancement in video distribution and display technologies, digital signage is becoming a point of emphasis for self-service applications, including kiosks.

The fact that a video presentation screen can also serve as a touchscreen input device makes applications even more relevant by providing a platform for promotional upselling to an already engaged customer. The real opportunity for the kiosk industry may lie in the fact that this element has the potential for merchandising products in the machine as well as revenue sharing from saleable advertising spots.

Digital media is currently available from kiosk manufacturers and technology suppliers for new machines. Retrofits are also available for older models. Screens can range from a single line LED display to a medium-sized LCD screen to a large touchscreen.

Despite the richness of data that can be displayed and captured by an LCD unit, it likely will be the paid advertising model, implemented so successfully at other retail locations (e.g. post offices, gas stations, and quick service eateries), that will serve as an adoption motivator for kiosks. The fact is incremental revenue, derived from digital broadcasting, can make a significant contribution to profitability.

Passive versus active displays

Regardless of the screen size hosting the user interface, there are two basic types of digital displays: passive and dynamic. Passive digital media involves the placement of photographs projected or posted on a screen or board for presentation. A major concern with passive media is that over time it tends to lose effectiveness as it is quickly taken for granted and thereby its message gets overlooked or ignored.

In other words, with unchanging content, there is little reason it will be viewed again. This is not the case with dynamic digital media which features colorful animation and even catchy sounds designed to attract and hold the customer's attention.

The application of animation as an alternative to previously stagnant content can impact consumer purchase behavior, regardless of the age of the consumer. Since teenagers and young adults have grown up with a cellular phone in one hand and an iPod in the other, multi-media stimulation can be beneficial to consumer attraction.

Similar to the objectives of other forms of media campaigns, kiosk-based digital programming should strive for three goals: 1) influencing a POS purchase decision (promotional), 2) extending brand image (informational), and 3) enhancing the customer experience (entertainment).

From an operational perspective, digital media is very appealing, as it enables instant updating of product availability, pricing, descriptors, add-ons, modifiers, as well as upselling opportunities (bundling and coupling).

Kiosk operators can use digital media to increase revenues while enhancing the consumer experience by delivering targeted messages where and when they seem to matter most; at the point of purchase. Traffic volume and sales data by time of day (often referred to as day-parts) are basic elements used to evaluate media success.

How to measure impact

Generally, there are three techniques used to determine the impact of digital media on point-of-purchase behavior. These factors are:

  1. Sales correlation – intelligent marketing refers to providing the consumer relevant messaging at the point of purchase based on an analysis of personal profile and day part. Matching POS transaction data to digital content will generate a correlation index between sales and product-specific messaging. Different messages will likely have varying impact on purchase decisions, and understanding how unique broadcast content influences consumers from various demographics can be important to menu engineering.
  2. Event-based couponing -- kiosk messaging that promotes a specific  product or combination of products may also generate a discount coupon, or e-coupon, to further influence purchase decisions. Media experts claim that this form of promotion conditions the customer to pay attention to broadcast content as there may be a promotion or other benefit to be gained. Digital signage can present kiosks an unparalleled sales opportunity, especially in conjunction with the use of QR codes and dynamic mobile marketing campaigns.
  3. Net impression tracking – an evaluation of the consumer's ability to recall the content of a digital display is termed “net impression tracking.” When a message is broadcast, an impression is created. Measuring the consumer's strength of recall can be used to evaluate this relationship. This is often a difficult metric to compute, but it can be very helpful in terms of next step strategies. Often practitioners report that short messages (as short as 10 seconds) may have a higher recall rate than a longer promotional piece. Additionally, the longer the messaging at a kiosk, the more likely there will be a service slow down.

In part 3 of our series on redefining the automated retailing experience, we'll explore digital signage technology in greater depth.


Topics: Advertising, Commentary, Customer Experience, Digital Signage, Future Trends, Interactive / Touchscreen, Retail, Self-Ordering, Touchscreens, Trends / Statistics

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