At the beginning of the year, I wrote about my predicted retail trends in 2020. Then COVID-19 broke out in late-February, particularly in Europe. The pandemic broke records in sales drops; in Great Britain alone the volume of retail sales in April 2020 fell by a record 18.1%, and in the EU, the estimated loss of retail sales is £3.2B and £253M in the UK. That being said, many global retailers are (unsurprisingly) expecting revenues to be below previous-year levels for the rest of 2020 and early 2021.
While some retailers have seen an increase in e-commerce spending, several brands are reporting that the lift in e-commerce sales are failing to make up for the loss of in-store sales (like Nike, whose global revenues for the fourth quarter dropped 38%). Now, as countries begin to lift restrictions on physical retail operations, retailers and advertisers are pivoting their in-store marketing strategies to make up for lost revenue with less foot traffic, turning to more creative and innovative solutions.
Here are three ways how in-store advertising with smart digital signage can help retailers increase in-store sales and overall revenue in the upcoming year.
Converting a smaller crowd at a higher rate
Marketing 101 tells us that targeted content = higher conversion rates than non-targeted content. Smart digital signage, in a (very simplified) nutshell, are digital screens that deliver targeted content in real-time based on demographics in front of the screen.
Smart digital signage has the targeting capabilities of online advertising platforms (like Google Ads or LinkedIn Ads), except it delivers targeted content in the real world. Smart digital signage delivers this targeted content by (anonymously) detecting demographics (like age and gender), and body positioning in front of a screen to decide the right time to show the right content to the desired audience. With these in-store advertising targeting capabilities, the relevant audience reach (i.e. the percentage of the audience that receives relevant content out of the total audience) of content displayed on the screen is greatly improved, thus increasing engagement, and sales – just as would be expected in an online advertising platform. In the case of our one clients, a global grocery retailer, smart digital signage increased sales by 10.5% when compared to traditional digital screens.
Understanding in-store shopping behavior for campaign improvements
Smart digital signage allows retailers to “see” how their shoppers browse and shop in-store. For example, if a product ad is triggered to a specific demographic group, and that demographic looks at the screen and the retailer sees an increase in sales, the retailer has not only gained revenue, but also valuable consumer data. Equally, if a desired demographic does not look at the screen (like during the launch of a new product or testing a product with a new demographic), the retailer learns how to refine their in-store marketing campaigns, product placement in the store, and content on the screen to best meet their goals, while proving the RoI of their advertising activities.
Using new, real-world data for media space price premiums
Not every retailer can boast to their suppliers and advertisers that they know with certainty the demographic of their in-store traffic, and how, as a result of looking at a screen with triggered, targeted content, they increased sales in a certain product category. The newly acquired, real-world audience insights of smart digital signage gives retailers the competitive advantage and power to sell their media space via programmatic advertising at a premium price. (One of our clients, for example, were able to increase their media space price through programmatic in-store advertising by 300% with Advertima Smart Signage). Just as advertisers rely on data from online platforms to optimize their marketing strategies, with smart digital signage, retailers can provide an added layer of consumer data of their in-store traffic.
It’s more important than ever in modern history for retailers to accelerate the pace of innovation and creativity of their in-store strategies to stay alive. None of us could have predicted that some of the largest, most iconic brands in the world would be filing for bankruptcy in 2020 (like Neiman Marcus, the century-old luxury department store). The good news is: untapped revenue sources are already within brands’ reach to capitalize on. The effective gathering and use of data can help retailers stay anchored to their customers’ “new normal” and increase in-store revenue – if the urgency is addressed with the right technology.