A digital display at Niketown in Manhattan.

NEW YORK — Digital signage has been embraced by a number of youth-oriented chains, but is still largely an untapped technology for most retailers.<BR><BR>This form of communication, however, could have a broad impact on everything from the...

NEW YORK — Digital signage has been embraced by a number of youth-oriented chains, but is still largely an untapped technology for most retailers.

This form of communication, however, could have a broad impact on everything from the methods stores use to measure traffic to how they convey information to consumers on such topics as pricing and store hours.

These were some of the themes discussed at the “Retail Application of Digital Signage Messaging” session held this week during the National Retail Federation convention here.

“We are just scratching the surface when it comes to digital signage,” said Pat Hellberg, managing and creative director at Nike, who was one of six panelists. “Nike creates a lot of media, but this is a new medium for us. Trying to speak to customers at point-of-sale is becoming ever more important.”

Retail Digital Signage was defined by panelist Steven Platt, director of the Platt Retail Institute, as “visual content displayed in a retail environment delivered digitally through a centrally managed and controlled network.”

“The system can be managed centrally and also have local input,” noted panelist Barton Weitz, executive director of the University of Florida Retail Center.

Other panelists were G.V. Iyer, a senior project manager at Banc of America; Margot Myers, manager of retail in-store programs for the U.S. Postal Service, and Kingshuk Sinha, professor of operations and management science at the University of Minnesota.

Weitz outlined what he sees as the benefits of using RDS, which include enhancing the store environment by displaying more information and making it easier for customers to find merchandise, and generally improving customer service. RDS also can be used to announce special promotions and reduce perceived waiting time for customers in line, he noted.

The disadvantages, as he sees them, include the cost of implementing this technology, as well as the need to constantly maintain the system and insure it is reliable.

“The price of flat-panel screens is decreasing, but a 40-inch display is still in the range of $4,000 to $5,000,” said Weitz. He also noted that there are plenty of future applications RDS could be used for, such as dynamic pricing — which refers to changing prices based on the levels of supply and demand — and personalized messaging.

This story first appeared in the January 14, 2004 issue of WWD. Subscribe Today.

Dinha, who has embarked on case studies of this technology, outlined what he sees as the key success factors for RDS systems. They are:

  • The presence of clear and realistic goals.
  • A steady source of appropriate content.
  • A single clearly identified ownership and responsibility structure.
  • A clear understanding between technology vendor and retailer.

In addition, he said retailers need to integrate digital signage with marketing and store design activities so there is a consistent look and feel across all the messages.

Hellberg noted that Nike is exploring a range of possibilities for digital signage, which is used now at the company’s 14 Niketown stores and 80 factory outlets. Currently, content for the digital signage is managed through a satellite and is updated on a regular basis.

“We have delivered media to our stores for the last 10 years,” Hellberg said. “We used to deliver information in the form of a VHS tape that had 15 to 20 minutes of programming, which would play over and over for three months. Now, we have a large amount of information about our products available on our Web site, and we feel the potential for digital signage is high for us.”

Nike is currently testing a program with the Dick’s Sporting Goods chain, where digital signage is customized with specific content for Dick’s with a Nike brand emphasis, Hellberg said.

“One of the challenges for us is how we integrate RDS with our other marketing programs,” he noted. ‘We do a wide variety of media programs, such as television, print ads and point-of-sale programs.”

He said the RDS updates now follow the same timetable as the rest of the Nike marketing program. There are also plenty of other plans in the works for the sports giant.

Added Hellberg: “We are thinking about a time when someone will pull a shoe off the shelf and the digital screen will tell you information about that shoe.”