During work on our latest installation of a large number of LCDs in pharmacy chains across our country, we got into a brief discussion with a representative of an agency that our customer hired to evaluate the impact of digital signage on sales and brand awareness. The only number we got out of him was an expected increase in sales of up to 25% - depending on the location. That sounded more like a general marketing claim than actual substantiated info so we decided to dig around and find actual verifiable research.
As we soon found out, while there is a great deal of comprehensive and peer-reviewed studies regarding traditional marketing, the digital signage field is unfortunately still too young, and the research is somewhat scarce.
The situation within the commercial sphere is not much better. Large shopping malls and commercial centers or international brands diligently track and evaluate their marketing and impact of each of its parts but with only a few exceptions they do not make the findings public.
But do not despair. There are some findings that you can use or think about while implementing your digital signage system.
Firstly, two observations regarding general marketing. In 2008, Ogilvy-Action found out that between 30 and 40 percent of category and brand decisions are made directly in-store.
The second one is from "Behavioral Effects of Digital Signage" by Morgan and Burke from 2008 which mentions a national survey of over 5,000 grocery shoppers showing that only about half of them thought that the stores provide sufficient and useful information about their products.
Therefore if you can properly assess and describe your product and use the advantages of digital signage systems, you can precisely communicate the needed info to your customers and raise the sales without spending much of your budget.
Back to the discussed study - another research it mentions was conducted by VideoMining Corp., which measured the effectiveness of a mall-based digital signage network.
The research confirmed that the degree of engagement varied highly depending on the shopper’s angle of approach and proximity to the display screens.
They set up LCD panels on the sides of several mall-kiosks and divided the area on each side of the kiosk into 4 zones approximately 3 feet wide.
Customers traveling in the lanes farthest from a test kiosk (zones 1 and 2) were more likely to stop and notice the message, even though zones 3 and 4 had roughly the same passer-by traffic, and these shoppers were physically closer to the displays. It seems that shoppers in zones 1 and 2 had a better line of sight and could view the signs for a longer period, increasing engagement.
The effectiveness of a mall-based digital signage was further investigated by DS-IQ. They ran an advertising campaign on digital signs and featured three different treatments:
- 30-s taste message,
- 30-s product line message
- two 15-s advertisements (short versions of the first two messages)
For this campaign, both 30-s spots drove additional sales above control periods (when the content did not play) by 8 to 9 percent. But running two 15-s treatments in the same loop—doubling the opportunity to see—increased sales lift by more than 50 percent compared to a single 30-s spot.
Two other commercial tests were made by Tesco and Neo Media POSTV who both carried out long (in Tesco's case from January 2005 through June 2007) and rigorous analysis of the effect of newly purchased plasma and LCD screens within several test stores. The results were very similar - they found that the in-store digital signage featuring “newsworthy” information (e.g., new items, seasonal offers, and promotions) has a markedly favorable impact on sales (14 percent). This effect was particularly strong for food and entertainment products (up to 25 percent).
It appeared that shoppers were most interested in messages that addressed the task at hand (“What do I need?”/ “What’s on sale?”/“What’s new?”) and less responsive to the typical brand-building messages shown on conventional TV.
Another case of digital signage testing was carried out by Indiana University and Eddie Bauer (an American clothing store chain) in 2000, where four digital signs were installed in the windows of a specialty apparel store and used to test two advertising campaigns over two months.
The first month featured a new line of leather jackets unique to Eddie Bauer. The second campaign, which was shown during the following month, promoted regular denim jeans at everyday prices. When new products were featured on the digital displays, store traffic jumped up 23 percent and sales increased by 10 percent relative to three matched control stores with conventional paper signs. When the denim jeans were featured, there were no significant differences in the traffic or sales of the test store and control stores.
This case is also mentioned and further developed in a following study by the same author - “The third wave of marketing intelligence”. There he mentions that to evaluate the impact of the displays on consumer perception, and purchase intentions, the research team also conducted short interviews of 356 mall shoppers.
Of the 70 percent of mall shoppers who reported walking past Eddie Bauer store, 23 percent recalled seeing the plasma display screens in the store windows and 9.6 percent correctly recalled the specific product being advertised.
These percentages were even higher (30 and 12 percent, respectively) for people who had shopped at the store during the last year. Of those who correctly recalled the message, 46 percent said they would consider buying the product.
Let’s end our little journey through the studies with the results of a study “The Mediating Effects of Perception and Emotion: Digital Signage in Mall Atmospherics”. It reads that when we put the size of the effect of the digital signage into perspective, the digital signage has less influence on the approach behavior of the customers than cleanliness, security and helpfulness of staff do.
That being said, it attributes more than the mall’s layout, restrooms, or the range of available merchandise. Installation of the digital signage had a manipulable effect on the internal surroundings leading to improvements in consumer perception of the mall. The authors estimate that achieving the same results through improvements to design, décor, and extensions could cost a regional mall over $20 million.
The magnitude of the effect of the digital signage may sound small but should be viewed in the light of their estimate that, at least in the long term, the improvement in sales figures could be worth around $1 million per year in extra rental income for a regional shopping mall.