Could the venerable color poster in the retail store window be replaced with something more high-tech and interactive? Microsoft, Intel, IBM and others are trying to convince the retail industry to upgrade their in-store placards to interactive digital signage.
This year, the National Retail Federation (NRF) Annual Convention and Expo was awash in IT company presentations designed to display the visual and interactive power of computer-run electronic signs.
Cisco Systems, Hewlett-Packard, IBM, Intel and NCR all either demonstrated flashy digital signage prototypes or announced new initiatives and early customer wins around the concept.
The idea of using digital displays in stores has been around for well over a decade, at least in high-end stores. But these IT companies touted how a digital sign could act as a two-way communication medium, allowing customers to find more information to aid purchasing decisions.
"Most digital signage to date has been a video feed or a slide-show, where it is almost like a poster replacement," said Joe Jensen, general manager at Intel's embedded computing division. "Those two ways of delivering content are not catching consumers' attention any longer. So we think these digital signage platforms will need to keep escalating their capabilities in order to maintain the eyeballs."
Your eyeballs have probably already been exposed to multiple digital signs, even if they haven't captured your attention. They're at gas stations and sports stadiums, and in subway cars, elevators, bars, movie theaters and airports.
In the U.S. alone, approximately 155 million people have seen some form of out-of-home digital video display, according to research firm Arbitron Inc.
For the NRF conference, Intel demonstrated a state-of-the-art display (Windows Media File), one 2.3 meters tall and 3 meters wide. Half was a multitouch-capable LCD and the other half was made of transparent holographic glass. The user could flip through different ads on the LCD screen. The holographic side of the display, embedded with a camera, could adjust the height of its menu to the height of the viewer's head, and serve content based on the viewer's gender.
Part of this new push has come about because the latest processors are powerful enough to undertake display and video analytic duties that previously could be done only by dedicated and much-more-expensive DSPs (digital signal processors), Jensen said. Whereas a DSP that could do video analytics would cost in the range of US$3,000 to $4,000, the latest multicore server processor can do the job for somewhere between $100 and $200, Jensen said.
Other cost savings would kick in using off-the-shelf IT components, Jensen said. The prices of LCDs have fallen dramatically in the past few years. Using the new WiFi 802.11n equipment could save a few thousand dollars per unit installation by eliminating the need to run Ethernet cable. And savings in sign maintenance could be enjoyed through IT management software. Intel, for instance, offers remote management capability through its Advanced Management Technology.
For the conference, Intel and Microsoft announced they were working on a set of specifications that third-party developers could use to build standardized digital displays. The platform will run the Windows Embedded Standard 2011 operating system, running on the Intel Core i7 processor.
Microsoft Embedded Standard 2011, to be released later this year, is basically a heavily modularized version of Windows 7. "It allows device manufacturers to pick and choose which components they need for their devices," said Irena Andonova, a Microsoft director of product management for Windows Embedded in the enterprise.
Both Microsoft and Intel officials indicated that they would not be selling digital sign systems directly to retailers, but rather would offer products and specifications for digital-signage-system builders to create their own systems. Much like the standardization of componentry brought down the costs of personal computers, standardization in this market may lower costs as well.
One system builder in this space, NCR, is finding success with its products. The company sells a digital-signage content management system called NCR Netkey. With the Netkey software, or using a NetKey service hosted by NCR, a vendor can store and program the content for multiple digital signs spread out across different locations. The software can also be programmed to let store managers add their own content as well, said Dusty Lutz, a NCR Netkey general manager.
For the NRF conference, NCR announced that the apparel and accessory retailer Hot Topic will use NetKey to manage 1,500 in-store kiosks and digital signs. The signs and kiosks would enable customers with the company's customer loyalty program.
An IBM spokespeople stressed how well the company could integrate digital signs with back-end business intelligence systems. With the signs using analytics and customer personalization data, a store can offer deals based on the consumer's known interests.
One day, when a consumer enters a store, he or she could be identified by their cell phone, via a Bluetooth or WiFi connection. A "presence server" could then draw that user's preferences from a back-end BI system and display them on the screen, said Craig Stevenson, global portfolio leader for IBM's global retail industry.
"When I walk into the store, the retailer knows I am there and can start interacting with me on a one-to-one basis," Stevenson said.
When equipped with Web cameras, the signs can also be used to watch customer traffic, in order do store traffic analysis and measure the effectiveness of ads, Stevenson added.
Of course, along with this digital intimacy come new issues of privacy that the retail industry will have to grapple with, said Richard Lebovitz, editorial director for events firm Exponation, which has run the Digital Signage Expo for the past seven years.
The retail industry has already navigated these tricky waters in issues of in-store surveillance, but privacy groups will raise concerns when more monitors start recognizing customers, he said. "There needs to be some sort of disclosure," he said.
Overall, however, retailers do seem to be interested in the interactive embellishment of digital signage, Lebovitz said. Initially "they weren't paying attention to how signs were used in the store. But they're getting a lot savvier today," he said. Stores are interested "in trying to help the customer with their buying decisions and simplify the purchasing process."