Basics of a Digital Signage Merchandising Network By Frank Lucer At Isnare.com Ezine Articles

There are many business models which can drive your digital signage network. In the recent past, we've explored advertising as the main source of revenue. A lot of owners pursue this model because it is straightforward and offers cash flow numbers that are simple to calculate. An entirely different model is one that is focused on merchandising. Rather than being used to distribute advertising, the screens are deployed for the purpose of promoting a particular company and its products.

Below, I'll explain the basics of a digital signage merchandising model. We'll discuss who launches and steers the project as well as advantages and drawbacks that are inherent to it. I'll also describe one of the most common obstacles that can hamper its success.

Understanding The Project's Purpose

This type of signage project is designed to accommodate a few separate, but related, objectives. First, it supports a given merchandiser's brand. Second, it promotes specific products within that brand, often with the goal of lifting immediate sales. Third, it accommodates broad promotional campaigns within the brand. It is typically spearheaded by a single merchandiser with the digital screens hosted in a venue in which only that merchandiser's products are sold.

For example, consider the popular clothing retailer Banana Republic; each item sold within its stores are part of its brand. A merchandising signage network would be deployed within Banana Republic's stores to support the brand, promote (broadly) all items within the store, and advertise specific items near the screens.

The content for branding campaigns may be developed by the retailer. However, a media company will often create the content for specific sales promotions.

Advantages And Potential Drawbacks

One of the most important benefits for a merchandiser-led signage network is related to content. It can be tightly controlled with a high level of customization because the entire project is handled by the retailer. In fact, content can be developed for each individual screen in order to highlight certain products that are in close proximity. This advantage has a far reach.

For example, consider a retailer that is running an advertising campaign on television for a specific item. People who visit the retailer's stores can be greeted with customized content that promote the advertised item. What's more, the content can be distributed only to the screens that are near the product.

Unfortunately, having complete control and flexibility over the content presents its own challenges. If a network operator is unable to show top management how the screens deliver a positive ROI, resources that were once allocated toward the project may be pulled. When that happens, content suffers dramatically (after all, the budget is slashed) and there is little chance for the network to recover.

Possible Obstacle To Success

One of the most severe challenges in deploying a merchandiser-led signage network is not having sufficient time in order to test its effectiveness. Often, a retailer's senior management will invest a sizable amount of money into a large project with certain ROI expectations. They will allocate financial resources to the project and hand the reins to a project owner. If the screens fail to immediately deliver the expected ROI, a rash decision is made by management to cut the budget (which I alluded to above). In doing so, they seal the project's fate.

Digital signage networks require constant testing. Sound, lighting, screen positioning, and other factors influence results. One possible way to circumvent this obstacle is for the network operator to suggest conducting small-scale tests in select venues before a full deployment (and investment).

This digital signage model can be very effective. Not only can it build a merchandiser's brand, but it can deliver measurable results over time. But, a sufficient budget must be allocated and enough time given to the project team in order to test.

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