Digital media has rapidly evolved with the growing expectation on the part of many consumers that the kind of information and interactivity that they have come to expect from their home computers should be available to them in a retail store environment. The question on the minds of retail many executives is how do we (or do we?) take this novelty and make it a part of our efforts to improve the customer experience within the in-store environment? And how do we measure its effectiveness?
To answer these questions, ask this one: Why would a measurable ROI be any harder to achieve for a digital media than it would be for more commonly used décor elements? It shouldn't, and it isn't.
The beginning of retail design industry was, arguably, primarily a phenomenon of the post WWII era. Sure, P.O.P displays had been around practically since the invention of the retail environment, with companies like Coca-Cola ensuring brand presence at soda fountains with every flick of a soda jerk's hand (for extra credit, the term "soda jerk" comes from the process invented to thoroughly infuse the syrup used by early soft drink dispensers in the consumers' glasses by jerking a lever backward and forward to ensure the resulting concoction was evenly mixed). But retail décor designed for the purposes of increasing brand awareness within the retail environment, was not pursued by most retailers as the art and science we currently know, until the late 1940s and early 1950s.
THE LIGHT BULB COMES ON
Besides directional signage ("This way to the Gent's Room"), the original focus of retail décor design was primarily on brand presence. As a result, the design and production of the elements of a retail décor package were simply a marketing department expense, with little thought given to any possible ROI. The burgeoning science of influencing consumer travel and buying patterns within a retail environment had not yet been married to the art of retail décor design. Some would argue that this marriage, where it even exists today, is still not universally understood.
But most retailers and design agencies began at least to get the message that retail décor could increase in store sales in the 1970s and 1980s. Measuring an ROI for these design packages was something on which accounting departments began to insist, and the merger of the science of increasing in-store sales by influencing the customer experience and behavior with the art of retail décor design, was born. Still, the materials used for most design packages changed little during this period and, with the exception of the widespread use of materials like styrene and foam core, they have remained essentially the same in the ensuing years.
The first video media displays were treated by consumers, and not a few retail and design agency executives, as a novelty. Their first appearance in retail environments began in the late ‘80s and early ‘90s. Utilized by retailers and CPGM's (Consumer Product Group Manufacturers) purely to increase brand awareness, uses such as consumer interactivity, and those that would have a more direct impact on "The Customer Experience" were still a mere glimmer in the eye of early industry visionaries, never mind an actual ROI. Still, the seeds were sown and a new way of looking at retail décor was born.
Some of the earliest and most obviously applicable uses for this new medium were in video rental stores. Retailers partnered with studios to promote new releases, advertise specials and improve consumer sell through (one of the gold standards for the video industry) by convincing consumers that there were selected video, and later DVD releases, that they simply must own and have a part of their library, as opposed to renting. While in-store video displays were only one arrow in the collective quivers of studios and retailers, the strategy worked. It worked big. And today, while rentals are still a mainstay of virtually all video retailers, consumer sell through numbers are a higher percentage of revenue than could have been dreamed of in the early 1980s.
Digital media was born on the back of this success in the video retail industry, although few took notice. Digital media distinguishes itself, of course, with "traditional" (is there such a word for this industry anymore?) video displays with the ability to stream more media and data into the retail environments with higher quality, and also makes interactivity possible. Endless video loops of the same product or branding messages no longer have the same "gee whiz" impact they once had. Rather, the medium has evolved with the growing expectation on the part of many consumers that have been raised and nurtured in a digital age.
So, how do we take this novelty and make it a part of our efforts to improve the customer experience within the in-store environment?
There are only three simple questions to be answered when making a decision on implementing or renewing a retail design concept. We all know them by heart.
What does it do for the brand?
What does it do for "The Customer Experience"?
What is the ROI?
Surely the brand question has been answered for many retailers as it relates to digital media. There seems to be few, if any, naysayers left on the question of the ability to leverage brand awareness within the in-store environment using this new medium. After all, that was the original goal of more traditional décor package elements. The problem with relying on the value of consumer brand awareness alone when making any decision on retail design, is that the elements making up that design are relegated to once again being a pure expense item. Quantifying the value of brand awareness has been a matter of endless discussion in academic, consulting, and design executive circles. For now, we will leave that discussion to them.
But, ah, The Customer Experience. Has the search of this elusive entity lost its relevance in today’s search for the perfect in-store design package that may or may not include digital media? Not according to the headlines. As this article was being written, Home Depot announced a layoff of over 300 associates from its Atlanta area headquarters with the stated goal of reinvesting in strategies geared towards improving just that. While The Customer Experience is defined differently by different retailers, that definition almost always includes access to accurate information, improved service, and an easy-to-navigate in-store environment (not to mention low prices). Digital media has already begun to prove itself as being a more than capable compliment to existing décor elements in the ongoing and never ending search for improving The Customer Experience. If that is the case, where is the remaining debate?
That Darned ROI. The ROI is the bane of existence to every creative designer, and the compass for every finance executive driven to maximize shareholder value. But why would a measurable ROI be any harder to achieve for a digital media than it would be for more commonly used décor elements? It shouldn’t, and it isn’t. Unless one is looking at the subject from a biased perspective, the drivers for an achievable ROI on any design element are the same whether digital or traditional. A good, well executed, and well tested, design, produced and implemented with an unwavering commitment to consistently flawless execution, will deliver a positive and impressive ROI every time.
In fact, it could be argued that as it relates to the consistency of execution and speed-to-market impacts, digital media has a key advantage over more commonly used design elements. Anyone who has struggled with production issues on traditional graphics, and labored over the shipping and installation of those elements, knows the pain of achieving the consistency of the implementation, along with the speed-to-market imperative that drives a positive ROI. Digital Media bypasses several key processes on which traditional design components rely. When you layer on the potential for interactivity, and the ability of digital media to attract and direct consumer attention within a store with unmatched accuracy (see also: shopping cart and aisle marker digital displays that teach and move consumers through the in-store environment to daily changing specials which may not be advertised outside the store) clearly digital media has more than earned its’ place in the store planning objectives of many retailers.
All that said, it is unlikely that digital media will ever completely replace traditional décor packages, any more than television every replaced films, despite the fears of many movie studio executives in the 1950s. Rather, it seems apparent that digital media is the perfect 21st century complement to an art and science used since the mid20th century. And, as such, is not inherently any more or less measurable in terms of an ROI than those more traditional design elements it accompanies. A 25-year veteran of the project management and supply chain professions, Bryan Thompson (firstname.lastname@example.org) is SVP Operations for RetailOne. Thompson has worked with a number of the world’s largest retailers on many large scale programs including Exxon Mobil, Amazon, and Safeway to name a few He has also contributed articles and commentaries to trade publications such as Chain Store Age, while he performs his duties as SVP Operations for RetailOne overseeing the project management and supply chain functions of that organization. RetailOne is an Atlanta based professional services firm offering the complete integration of all elements of a successful retail design program from design, to implementation.